How is the Woolworths share price managing to defy today’s sell-off?

Woolies shares are an island today. Here’s why this blue chip might be defying the markets…

| More on:
Woman thinking in a supermarket.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The ASX 200 has seen a savage selloff so far this Tuesday 
  • But Woolworths shares are defying this gloom, and even broke even at one point 
  • So why are Woolies and other ASX consumer staples shares displaying such resilience? 

It’s been a rather dreadful start to the trading week for ASX shares so far this Tuesday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down by 1.93% at around 7,330 points after the ASX 200 plunged by as much as 2.4% earlier this morning. But at least one ASX 200 blue-chip share has managed to defy this selloff. That would be the Woolworths Group Ltd (ASX: WOW) share price.

Woolworths shares are more or less defying the savage market selloff we’ve seen so far today. The company’s share price is still down at the time of writing, but by far less, currently trading down 0.4% at $39.16. Earlier, Woolworths was actually in the green too. 

That makes Woolies one of the only blue-chip ASX 200 shares to not see its value substantially sold off today. At the present time, all four of the big four ASX banks are well in the red. As are BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL) and Telstra Corporation Ltd (ASX: TLS). In BHP’s case, the iron ore miner has lost around 5.2%.

So what is saving Woolworths from the worst of today’s selling pressure?

Why is the Woolworths share price defying today’s ASX 200 selling?

Well, it doesn’t appear to be anything the company has done specifically. There have been no major news or announcements out today from Woolworths itself. However, we get a clue if we look at Woolworths’ major peers. The Coles Group Ltd (ASX: COL) share price is also outperforming the broader ASX 200 today. Coles shares are currently down by 0.2% at $18.79 each after breaking into positive territory at one point as well. 

IGA operator Metcash Limited (ASX: MTS) is itself in the green. Metcash shares are currently up by 0.4% at $4.79 a share. Endeavour Group Ltd (ASX: EDV), which used to be part of Woolworths, is doing very nicely, up 1.16% at $7.83.

Indeed, Woolworths’ ASX 200 Consumer Staples sector is leading the ASX so far today. All ASX 200 sectors are currently in the red. But the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) is currently the best performing one, with its 0.33% loss thus far today. 

So perhaps we are seeing what can often happen in a market selloff; investors looking for safety. For better or worse, consumer staples shares like Woolies are often sought out during fearful markets for their perceived safety. Since consumer staples shares by definition produce and sell life’s ‘needs’ like food, drinks and household essentials, many investors believe they are ‘safer’ investments during a downturn. Thus, shares like Woolworths often outperform the broader market during savage selloffs, like the one we are seeing today. That would explain why the entire consumer staples sector is performing well today too.

At the current Woolworths share price, this ASX 200 blue-chip has a market capitalisation of $47.73 billion, with a dividend yield of 2.4%. 

Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

Sports fans looking at smart phone representing surging pointsbet share price
Consumer Staples & Discretionary Shares

Up 15% this week, what’s going on with the Pointsbet share price?

It's been a good week to own Pointsbet shares.

Read more »

An older couple holding hands as they laugh while bouncing on a trampoline feeling happy that the Ardent Leisure share price is going up today
Consumer Staples & Discretionary Shares

Why is the Ardent Leisure share price jumping 9% today?

Ardent Leisure shareholders will be gearing up for a payday next month.

Read more »

A woman who used buy now, pay later receives her online shopping in the post only to find it's not what she wanted.
Consumer Staples & Discretionary Shares

Kogan shares slide 7% nearing a 52-week low

Kogan shares are falling today, but they are not alone in the sector.

Read more »

A woman looks unsure as she ladles mixture into a pan surrounded by small appliances
Consumer Staples & Discretionary Shares

Is the Breville share price out of the bargain bin?

The Breville share price is down 40% in 2022 -- but has gone up 5% in the past five trading…

Read more »

Happy woman looking for groceries. as she watches the Coles share price and Woolworths share price on her phone
Consumer Staples & Discretionary Shares

How did the Coles share price stay positive in June while the ASX 200 slumped?

Over a tumultuous month of trading for the ASX 200, the Coles share price is one of just a few…

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Broker Notes

Top broker backs a tasty 20% upside for the Collins Foods share price

This ASX share could have plenty of upside ahead...

Read more »

Young girl drinking glass of milk
Consumer Staples & Discretionary Shares

Bubs share price drops despite new Target deal

The market continues to price in macroeconomic risks.

Read more »

Supermarket worker looks upset.
Broker Notes

Wesfarmers share price tumbles on broker downgrade

Wesfarmers shares are having a difficult day...

Read more »