Will Woolworths Group Ltd outperform Coles again?

Credit: James Arboghast

Shares in supermarket giant Woolworths Group Ltd (ASX: WOW) are holding strong on the eve of the retailer’s half-year results announcement.

Opening today up 1.23% to $27.56 Woolworths is entering 52-week high territory, up from $26.63 at this time last year and well-recovered from their October 2017 dip of $24.54.

All eyes will be on the supermarket, department store, home improvement and petrol retailer as results are handed down for the half year ending December 31, 2017 tomorrow, with Woolworths managing to outperform Wesfarmers Limited (ASX: WES) supermarket rival Coles in every sales quarter since December 2016.

Wesfarmers announced its Coles business suffered a 14.1% profit slide to $790 million due to service investment costs, but market-expectations in Woolworths continue to hold strong against Coles.

Both Woolworths Group and Wesfarmers have been threatened by the expansion of German discount grocer Aldi in recent times, with Metcash Limited (ASX: MTS) also posing a threat through their IGA business.

But UBS brokers still put Woolworths as the top supermarket retail stock to buy out of the sector, with a neutral on Wesfarmers and Metcash.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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