Macquarie predicts a rise in sales for leading Australian grocer Woolworths (ASX:WOW) in its Australian Food and New Zealand Food sectors until 2025.

The brokerage firm anticipates that the AU Food unit, which constituted 75% of Woolworths' FY22 sales, amounting to A$60.85 billion, to reflect a comparable sales growth of 5% in the second half of 2023 and 3.6% for FY23, fuelled by high inflation rates.

Woolworths is forecasted to show similar performance to its competitor, Coles Group (ASX:COL), in the fiscal year 2023 due to its strong performance in the third quarter of 2023.

In Woolworth’s NZ Food sector, the brokerage expects a comparable sales growth of 1.5% in the latter half of 2023, although cost and wage pressures remain persistent.

Macquarie opines that Woolworths is well-positioned with its Australian Food business, and its Big W business might reap some benefits from consumers trading down.

The brokerage maintains a ‘neutral’ rating and a price target of A$40.00.

Of 16 analysts, eight rate the stock as ‘buy’ or higher, four as ‘hold’ and four as ‘sell’ or lower, with a median price target of A$40.50 according to Refinitiv data.

Woolworths is a top retailer in Australia and New Zealand offering a wide range of products including food, clothing, and home goods.