Fund Manager Summary
The fund managers believe that the outlook for Woolworths Group Ltd remains positive, particularly given recent regulatory developments. In their opinion, the acceptance of the 11 recommendations from the Food and Grocery Code of Conduct by both the supermarket operators and the federal government enhances the company's operational framework. While acknowledging that a regulatory risk overhang due to the ongoing ACCC review may persist, they emphasize Woolworths' strong positioning as a consumer staple amid rising cost of living pressures. Additionally, trading at a multi-year valuation low on a risk-adjusted basis presents a favorable investment opportunity.
Source: Trading View
Commentary From The Managers
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Pendal Group
3 Nov 2025
$28.22
Summary
- Pendal Group notes that Woolworths (WOW, +6.3%) delivered a 1Q26 trading update that was broadly in-line with expectations.
- Australian Food sales growth was reported at +2.1% for the first eight weeks, improving to +3.2% in October.
- Ex-tobacco sales growth moderated from +4.0% in the first eight weeks to +3.8% for the full quarter, with tobacco sales declining 51%.
- Management indicated that fruit and vegetable deflation posed a headwind in the latter part of the quarter.
- There were encouraging signs in transactional momentum improving into 2Q26, particularly in items and transactions.
- NZ Supermarkets showed stronger performance with +3.7% LFL sales growth.
- Woolworths adjusted its promotional strategy in mid-September, enhancing Everyday Rewards visibility and personalized offers.
- Big W's performance improved due to a better full-price clothing mix and favorable summer weather conditions.
- Management remains comfortable with FY26 earnings guidance, despite year-to-date performance being below acceptable levels.
- While the update was not spectacular, it indicates progress given recent challenges, particularly with October's acceleration to +5% ex-tobacco.
- The critical test for Woolworths will be the November/December period, as it will be compared to last year's Victorian supply chain disruptions.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
3 Nov 2025
$28.22
- Pendal Group notes that Woolworths (WOW, +6.3%) delivered a 1Q26 trading update that was broadly in-line with expectations.
- Australian Food sales growth was reported at +2.1% for the first eight weeks, improving to +3.2% in October.
- Ex-tobacco sales growth moderated from +4.0% in the first eight weeks to +3.8% for the full quarter, with tobacco sales declining 51%.
- Management indicated that fruit and vegetable deflation posed a headwind in the latter part of the quarter.
- There were encouraging signs in transactional momentum improving into 2Q26, particularly in items and transactions.
- NZ Supermarkets showed stronger performance with +3.7% LFL sales growth.
- Woolworths adjusted its promotional strategy in mid-September, enhancing Everyday Rewards visibility and personalized offers.
- Big W's performance improved due to a better full-price clothing mix and favorable summer weather conditions.
- Management remains comfortable with FY26 earnings guidance, despite year-to-date performance being below acceptable levels.
- While the update was not spectacular, it indicates progress given recent challenges, particularly with October's acceleration to +5% ex-tobacco.
- The critical test for Woolworths will be the November/December period, as it will be compared to last year's Victorian supply chain disruptions.
Summary
Perennial Partners
31 Oct 2025
$28.41
- Woolworths has shown a rally of 6.4% after a Q3 update, indicating tentative signs of improvement.
- Perennial Partners has recently moved to an overweight position in Woolworths.
- The fund manager finds Woolworths to be more attractive compared to Coles, based on relative valuations.
- There is a directional change in operating performance that supports this investment thesis.
Summary
Tamim Funds Management
29 Oct 2025
$27.61
- Woolworths is a key player in the Australian economy, affected by consumer spending trends.
- After a challenging FY25, Woolworths is showing signs of stabilisation in Q1 FY26.
- Sales increased by 2.7% year on year to $18.5 billion in Q1 FY26.
- Australian Food, the core of Woolworths, showed a 3.8% sales growth excluding tobacco.
- Woolworths is focusing on price, simplicity, and execution to rebuild customer trust.
- Digital engagement is a competitive advantage, with eCommerce sales growing 13.2%.
- New Zealand operations are stabilising, contributing to earnings diversification.
- BIG W is beginning a turnaround, with modest sales growth and improved efficiency.
- The Australian B2B segment is performing solidly, providing stability and diversification.
- Management is focused on executing a strategy rather than seeking high growth.
- Woolworths is preparing for the critical Christmas trading period, with early sales indications up 5%.
- The market currently values Woolworths as a defensive blue-chip, with potential for growth if management executes well.
- Tamim Funds Management continues to hold Woolworths, anticipating a disciplined growth trajectory.
Summary
Clime Investment Management
30 Sept 2025
$26.70
- Woolworths (WOW) detracted in September due to ongoing negative sentiment weighing on the share price.
- Management execution has fallen short of expectations, but recent steps to reinvest in core supermarket operations are encouraging.
- Rebuilding trust and market share will take time.
- Clime Investment Management continues to view WOW as a high-quality, defensive business.
- Woolworths is underpinned by a strong store network, supply chain, and superior online offering.
- This presents an attractive long-term opportunity as earnings stabilise and its valuation potentially reverts to its historical mean.
Summary
Pendal Group
31 Aug 2025
$28.75
- Pendal Group provides an update on their investment thesis regarding Woolworths Group Ltd.
- Woolworths disappointed expectations of a sharp rebound in earnings following a challenging FY25.
- Profits fell 17% in FY25, attributed to distribution centre strikes leading to a loss of market share.
- Revenue growth is currently at low single digits in Q4 FY25 and the first eight weeks of FY26.
- This growth is lagging behind Coles, despite promotional efforts from Woolworths.
- Guidance for earnings growth is set at mid-to-high single digits, compared to the market's mid-teens expectations.
- This has resulted in consensus downgrades for FY26 and FY27.
Summary
Alliance Bernstein
30 June 2025
$31.11
- Woolworths, a major Australian supermarket and retail operator, was a detractor in the quarter.
- The wider consumer-staples sector weakened, impacting sentiment.
- Woolworths’ decision to lower prices across a range of products raised investor concerns.
- Concerns focus on the durability of industry pricing and margin stability.
- Alliance Bernstein continues to like Woolworths for its stable cash-flow profile.
- They believe the market is overstating the longer-term impact of recent price moves.
Summary
Clime Investment Management
31 Mar 2025
$29.55
- Clime Investment Management initiated a position in Woolworths Group Ltd (WOW) following a period of weak performance.
- The fund manager believes current headwinds in WOW's food and non-food divisions are transitory.
- Clime sees WOW's superior physical store network as a competitive advantage.
- The growing online business positions WOW well for future growth in earnings and dividends.
Summary
Cooper Investors
30 June 2024
$33.57
- Cooper Investors added to their Woolworths (WOW) position during the quarter.
- The supermarket operators and the federal government accepted the 11 recommendations from the Food and Grocery Code of Conduct.
- This acceptance followed the conclusion of the Supermarket Senate Inquiry.
- There is a regulatory risk overhang due to the ongoing ACCC review.
- Despite this, Woolworths is positioned as a consumer staple amid ongoing cost of living pressures.
- Woolworths is trading at a multi-year valuation low on a risk-adjusted basis, which is viewed as favourable.
Summary
Clime Investment Management
30 June 2024
$33.57
- WOW is recognized as Australia's premium supermarket operator.
- It boasts a market-leading online grocery business.
- Strong ancillary business units contribute to supporting margins.
- Population growth trends are creating tailwinds towards increased home eating.
- Clime Investment Management sold their investment in COL to leverage recent share price strength.
- This decision allows for an increase in portfolio weight in WOW, which presents a larger share price upside.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"In a landscape fraught with regulatory shadows, Woolworths appears well-positioned as a consumer staple, especially at a multi-year valuation low. The recent acceptance of the Food and Grocery Code could signal a turning point, despite lingering risks from the ACCC review."
Last Updated: 03 Nov 2025
Query The Data
Frequently Asked Questions
Who is investing in Woolworths Group Ltd (ASX:WOW)?
Fund managers including Cooper Investors, Clime Investment Management, Alliance Bernstein, Pendal Group, Tamim Funds Management and Perennial Partners have invested in Woolworths Group Ltd (ASX:WOW).
Why do fund managers invest in Woolworths Group Ltd?
Fund managers are investing in Woolworths Group Ltd due to its strong positioning as a consumer staple amid ongoing cost of living pressures. The acceptance of regulatory recommendations from the Food and Grocery Code of Conduct enhances operational stability, despite potential regulatory risks. Additionally, the company's shares are currently trading at a multi-year valuation low, making it an attractive risk-adjusted investment.
What happened to Woolworths Group Ltd (ASX:WOW)?
Fund managers are investing in Woolworths Group Ltd due to its strategic focus on stabilizing core operations and enhancing customer value amid a challenging retail environment. Despite recent profit declines and market share losses, early signs of recovery are evident in Q1 FY26 with modest sales growth and improved customer sentiment. Woolworths is prioritizing price competitiveness and operational efficiency, leveraging its digital capabilities and simplifying its portfolio. This disciplined approach positions the company for potential earnings growth, making it an attractive option for long-term investors seeking stability and gradual improvement.