Australia’s biggest supermarket chain has boosted its annual profit by 18 per cent, despite a challenging economic environment that has strained household budgets.

Woolworths, which has more than 1700 stores across the nation, made a bottom-line net profit of $1.1 billion in 2025/26, up from $983 million in the year before.

“While we expected the challenging economic environment to continue, with household budgets remaining under pressure, our strategy to deliver low prices and the best range and convenience gives us confidence we can be first choice for customers,” chief executive Amanda Bardwell said on Wednesday.

Woolworths’ underlying earnings – before interest and tax – jumped 12.7 per cent to $3.1 billion on sales of $71.5 billion, an increase of 3.6 per cent in the year ended June 28.

Australian food sales rose 4.6 per cent to $53.9 billion, with online sales a particular highlight.

Its underlying earnings margin for the division increased by 20 basis points to 5.5 per cent, driven by improved productivity and internal cost management.

In the first eight weeks of 2026/27, Woolworths’ total Australian food sales lifted by 7.6 per cent on the back of a successful Ooshies promotion.

“Sales momentum was further strengthened during the period by the success of the Disney Ooshies collectibles program, which is expected to have added approximately 1.5 to two points of incremental sales growth,” the retailing giant said.

The results compare to Coles, which posted its annual results on Tuesday, including a net profit of $1.1 billion – in line with its rival.

Coles’ sales jumped by nearly 3 per cent to $45.6 billion, with its supermarkets division leading the way at $41.5 billion, a gain of 3.7 per cent.

Coles’ numbers were solid, market analysts said, but for one big negative.

While Coles got off to a strong start in the new financial year, sales slumped during Woolworths’ Ooshie promotion, a giveaway of rubber Disney, Marvel and Star Wars characters for customers who spend $30 or more at the till.

Coles’ sales have picked up again since the Ooshie campaign ended, but they did not recover to the same level seen before the promotion.

“The collectibles campaign really came to an end 10 days ago,” Coles boss Leah Weckert said on Tuesday.

“At this stage, it’s probably a bit hard to say whether the full recovery has occurred in terms of it coming back up.”

In the past, supermarket collectible campaigns, including Coles’ own promotions involving Pokemon and Coles Little Shop collectibles, have lifted sales temporarily.

However, a survey conducted last week suggested the Ooshies offer had changed how a significant portion of shoppers, particularly parents and collectors, feel about the Woolworths brand and where they intend to shop next.

YouGov surveyed 1102 Australian adults between August 17 and 19 for the poll, which found 39 per cent of adults and 64 per cent of parents with children under 18 reported they had changed their shopping habits as a direct result of the campaign.

Woolworths shares were changing hands around $38.60 on Tuesday, up 31.1 per cent since the start of 2026, against a broader Australian market gain of 4.9 per cent.

–AAP