<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Woolworths has reported a significant jump in grocery sales while simultaneously slashing its profit forecasts as the escalating conflict in the Middle East sends shockwaves through the global supply chain.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The retail giant yesterday posted a 4.5 percent increase in group sales over the last quarter to $18.1 billion, with its flagship supermarkets surging by 5.9 percent. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>However, the strong result, announced yesterday to the ASX, was overshadowed by a more subdued outlook for the remainder of the financial year, as the retail giant warned surging petrol prices and rising logistics costs were beginning to eat into margins.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/family-of-missing-northern-territory-girl-appeal-for-her-return/dedcab9a-38dc-46d5-9104-ef64b6cee6ea" rel="" target="" title="Jacinta Price reveals missing girl is her niece"><strong><span>Jacinta Price reveals missing girl is her niece</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><span>The petrol squeeze</span></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The biggest problem for Woolworths right now is the rising cost of energy. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Because the conflict in the Middle East is making global oil prices jump, the supermarket is getting hit twice: it costs more to run their delivery trucks and stores, and shoppers have less money to spend because they're paying so much more at the petrol pump. </span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/woolworths-sales-surge-but-supermarket-cuts-profit-forecast-amid-petrol-price-spike/25897cbf-1227-400b-95d4-1e3f034394d8" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Looking ahead, the conflict in the Middle East is creating greater uncertainty for our customers, suppliers and team at a time when cost-of-living pressures are already acute," Woolworths chief executive Amanda Bardwell said. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"While the impact on the group to date has been limited, higher fuel costs and secondary effects are likely to have an increasing inflationary impact as we move through the calendar year." </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Woolworths warned that these external pressures had forced a downward revision of its profit expectations.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While the retail giant still expects supermarkets to report a rising profit for the full fiancial year, it will no longer be at the upper end of its forecast range. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h2><span>Shoppers are actually buying more</span></h2></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Despite the cautious profit outlook, Woolworths is seeing a peculiar trend: shoppers are actually buying more items. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Senior markets analyst at Stake, Kylie Purcell, noted that the current growth was being driven by volume rather than just price inflation.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Woolworths' results highlight a shift," Purcell said. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Shoppers are becoming more deliberate. They are buying more items per basket and leaning heavily into loyalty programs to stretch their dollar further."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h2><span>Trust 'the biggest challenge'</span></h2></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The announcement from Woolworths of a sales jump comes as the Australian Competition and Consumer Commission (ACCC) conducts a high-stakes investigation into whether the major supermarkets have been "faking" their discounts while posting multibillion-dollar sales figures as households struggle to pay their grocery bills.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In an effort to protect its market share and manage its reputation during the ACCC investigation, Bardwell today announced a price freeze for shoppers on 300 "household staples".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The freeze, which includes bread, meat and nappies, was a direct response to the "new wave of uncertainty" caused by the Middle East crisis, Bardwell said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The conflict has brought a new wave of uncertainty, and we're hearing from our customers that they're worried about what it means for their household budget," she said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>However, the key challenge Woolworths continued to face was rebuilding trust, Purcell said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"For everyday shoppers already feeling the pinch from higher interest rates and fuel costs, strong sales figures from the supermarket giants are unlikely to win any popularity contests," she said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The timing of today's price freeze on 300 staples is telling, but is unlikely to completely ease public annoyance." </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a></li><li><strong><em><span>Make 9News your preferred source on Google by</span></em></strong><span> </span><a href="https://www.google.com/preferences/source?q=9news.com.au" target="_blank"><strong><em><span>ticking this box here</span></em></strong></a></li><li><strong><em><span>Sign up to</span></em></strong><span> </span><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="_blank"><strong><em><span>our breaking newsletter here</span></em></strong></a></li></ul></div></div>