Woolworths Ltd
Woolworths Ltd - Retailing - Australia-Dissertation Writing Help
Woolworths Ltd - Retailing - Australia-Dissertation Writing Help
Strategic Direction
·
Woolworths Ltd continues to
expand aggressively in Australia with the opening of new outlets, acquisition
of local competing stores and refurbishment of stores. The company has also
launched a new retail brand in the grocery channel which focuses on fresh and
organic produce as well as delicatessen items. In addition, Woolworths
announced plans for a store credit card launch, which will contribute
positively to its performance over the forecast period.
Key Facts
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Address:
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1
Woolworths Way, Sydney, New South Wales 2153, Australia
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|
Tel:
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+61 (02)
8885 0000
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Fax:
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+61 (02)
8888 1029
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www:
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woolworthslimited.com.au
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Retail
formats/channels:
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Supermarkets,
food/drink/tobacco specialists, mass merchandisers, durable goods retailers,
Internet retailing, forecourt retailers
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|
Retail
brands:
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Woolworths,
Safeway, Thomas Dux, Dick Smith Electronics, PowerHouse, Tandy, BWS, Dan
Murphy’s, Big W
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Source: Euromonitor International from
company reports, trade press (includes Retail World, The Age, etc)
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2007
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2008
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Year end
June
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|
|
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Net sales 1
A$ million
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38,272.6
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42,571.2
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Operating
profit A$ million
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1,294.0
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1,626.8
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Outlets 2
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2,49
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2,536
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Selling
space 3 (‘000 square meters)
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2,779.1
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2,935.4
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Number of
employees
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180,000
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190,000
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Sales of
grocery 4 (%)
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74.3
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74.0
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Source: Euromonitor International from
company reports, trade press (including Retail World, The Age, etc)
Notes: 1 inclusive of hotel and wholesale
division; reports Australia sales only; 2 inclusive of New Zealand Dick Smith
outlets and exclude hotels; 3 inclusive of New Zealand Dick Smith and exclusive
of Hotels, ALH Group (BWS) outlets and petrol; 4 Euromonitor International
estimates
Company Background
·
The first Woolworths outlet was
opened in 1924. Woolworths Ltd was officially listed on the Australian Stock
Exchange in July 1993. In 2006 it had over 300,000 shareholders holding more
than 120 million ordinary shares, as well as 50,000 employee shareholders
holding another 1.8 million shares.
·
Woolworths operates in
Australia, New Zealand as well as India through a partnership with Tata Group.
In Australia, the company’s core business is grocery retailing, where it is
active in supermarkets and convenience stores.
·
To extend its liquor business,
Woolworths gained control of Australian Leisure & Hospitality Group Ltd and
MGW Hotels Ltd in 2004, and acquired Taverner Hotels in 2006. The company is
also present in mass merchandisers with the Big W brand, as well as Dick Smith
Electronics in electronics and appliance specialist retailers.
·
In addition, Woolworths has
petrol businesses in alliance with Caltex Australia, and has provided Ezy
Banking services to customers since 1999. Away from store-based retailing,
Woolworths also operates the Woolworths Online Internet retailing service.
·
In 2008 the company launched a
new food/drink/tobacco specialist brand, Thomas Dux, which provides a wider
range of fresh and organic produce, seafood, meat and delicatessen products
than the traditional Woolworths supermarkets. The Thomas Dux retail brand
targets more affluent customers, with its locations in upmarket suburban
neighbourhoods.
Private Label
·
Woolworths has adopted a 2-tier
approach for its private label range. The company’s private label portfolio is
comprised of the standard Home Brand range and the premium Select range. These
private label ranges are offered through its supermarkets and convenience
stores, and both aim to offer consumers good value for money.
·
The Home Brand private label
range offered an extensive array of products in 2007. Woolworths plans to
further improve its Home Brand sales and positioning, through launching new
packaging designs for the line to attract more consumers. In 2007, Woolworths
expanded the Select range and sales exceeded expectations.
·
Woolworths also has Naytura, a
private label line offering healthier products which are lower in fat, salt,
sugar and additives. Also, the Woolworths Organic range carries all certified
organic products, which includes milk, cheese and fresh fruit and vegetables.
These two private label lines certainly meet the rising demand for healthier
products in Australia.
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Private
Label Brand
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Sector(s)
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Comments
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Home Brand
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Sweet and
savoury snacks, canned/preserved food, dairy products, skin care, soft
drinks, surface care etc
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Budget
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Select
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Canned/preserved
food, sweet and savoury snacks, sauces, dressing and condiments, dog food,
dairy products, surface care etc
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Premium
range
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Woolworths
Naytura
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Bakery
products, spreads, sweet and savoury snacks, etc
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Mid-price
range
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Woolworths
Organic
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Dairy
products, fresh fruit and vegetables
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Mid-price
range
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Source: Euromonitor International from
company reports, trade press (includes Retail World, The Age, etc)
Competitive Positioning
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Despite losing its leading
position in retailing to Wesfarmers Ltd in 2007, Woolworths has retained its
positioning in all retail channels. The company has continued to maintain
similar value shares in Internet retailing and chained forecourt retailers,
while achieving slight gains in mass merchandisers and food/drink/tobacco
specialists in 2008.
·
To capitalise on its brand name
Woolworths launched a credit card – known as Woolworth’s Everyday Money Credit
Card – in the second half of 2008. It is the first card in Australia to combine
a credit card function with a loyalty programme that captures and sends
shoppers’ purchasing details back to a central database.
·
With its core business in
grocery retailing, there has been criticism of Woolworths’ domination of
supermarkets through its aggressive acquisition strategy. In 2008 the ACCC
opposed Woolworth’s plans to acquire a supermarket in New South Wales. There is
also general criticism of the company’s practices of not raising prices for its
purchases from farmers despite the drought conditions and increasing fuel
costs.
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Channel
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Share (%)
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Rank
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Retailing
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18.0
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2
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Supermarkets
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45.5
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1
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Mass
merchandisers
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30.3
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2
|
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Food/drink/tobacco
specialists
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29.0
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2
|
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Internet
retailing
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3.5
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3
|
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Chained
forecourt retailers
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12.4
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4
|
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Electronics
and appliance specialist retailers
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8.3
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4
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Source: Euromonitor International from trade
press (includes Retail World, The Age, etc), company reports, trade interviews
