Supermarket giant Woolworths has reported a 6 per cent increase of its net profit after tax to $1.16 million for the 27 weeks ended 2 January.

The company’s sales were up 4 per cent to $28.3 billion in comparison to the same period in prior year.

Woolworths managing director and CEO Michael Luscombe said given the macro economic market challenges of tightened consumer spending, as a result of interest rate increases and share rises in household utility, it is a “sound result”.

“Despite the recent challenges, our businesses continued to focus on improving range, merchandising and formats whilst investing strongly in price by leveraging the capability of our business model,” he said.

“As a result we have grown market share. During this half we served an additional 18.5 million customers in our retail outlets, an increase of 2.6 per cent, reflecting strong customer acceptance of our offers.”

Its best performing division was petrol, which saw a 23.8 per cent jump from $51.2 million to $63.4 million from the previous corresponding year.

Meanwhile, its Australian and New Zealand supermarkets also delivered solid results with 8.7 per cent and 15.2 per cent, respectively. 

“In a highly competitive and challenging retail environment, our strategies, including price reductions, have continued to ensure we have grown market share and in particular we have maintained our strong market position in groceries and increased market share in fresh and liquor. Customer numbers, basket size and items sold have also grown,” Luscombe said commenting on the Australian food and liquor division.

Big W and saw earnings decline by 17.1 per cent and 42.2 per cent.

According to Luscombe, Big W’s results reflect the lower consumer spending levels and subdued sales due to the impact of the unseasonably cool and wet weather experienced over the peak Christmas period, as well the continuing effects of price deflation.

Similarly, its consumer electronics division dropped 42.2 per cent from $34.8 million to $22.3 million. But its Dick Smith stores, excluding Tandy and ex Powerhouse stores, alone, achieved comparable sales growth of 6.5 per cent for the half.

Luscombe said while the consumer electronic results were below the prior period, it has “improved significantly” on the second half of the 2010 financial year.

The company has also amended its full year profit guidance, which is now expected to be in the range of 5 to 8 per cent, due the result of the floods and New Zealand earthquakes.