Woolworths' grand plans

Published on Wed, 02/11/2011, 04:00:43

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At its investor briefing, Woolworths Limited announced several key plans it has for the company:

Multi-channel ambition
Recognising that online shopping is only a growing part of retailing with its online sales growing at a rate of 63 per cent during the 2011 financial year, Woolworths said it intends to strengthen its focus on online.

Managing director of Australian Supermarkets, Tjeerd Jegen showcased the brand new online shopping platform which has recently commenced roll out. The site utilises a customer’s Everyday Rewards data, captured from in‐store and online shopping, to create favourites lists and predicatively suggest products purchased regularly. Customers can also change their delivery times online and will be able to access click then collect services from early next year.

CEO Grant O’Brien said Woolworths can leverage its bricks and mortar retail strength, Everyday Rewards data and supply chain knowledge.

We are really seeing a revolution in retail as customers integrate mobile, social networking and other internet‐enabled technologies into their bricks and mortar shopping experience,” he said.

“It isn’t a question of online or offline, it’s about creating integrating the two seamlessly and we are increasingly finding that our most valuable customers are ones who do both – for examples in our supermarkets business, customers who shop both in‐store and online spend 70 per cent more than customers who only shop in‐store.”

The company also said that there will be an update to its Supermarket app.

In conjunction to this, BIG W’s Julie Coates announced the launch of an app whereby customers can compare prices to competitors on like for like products, also with integration to online shopping.

The multi-channel operations will be headed under incoming director of multi‐channel, Penny Winn.

Dick Smith
In its 2011 financial year, Dick Smith reported earnings before interest and tax of $26.8 million, a 14.9 per cent decline over the previous period.

As a result, the company will undertake a strategic review of the Dick Smith consumer electronics business.

O’Brien said the consumer electronics retail category has been experiencing “significant’ challenges” driven by tighter consumer spending on discretionary products, category deflation and the high Australian dollar.

Woolworths Limited intends to report further on the review at its half year results in February.

Own brand product push
A five year plan has been outlined to double its customer take-up of its own brand products, Homebrand, Select and Marco.

Jegen said Woolworths substantially lags behind international retailers in terms of proportion of own brand sales – for instance Tesco in the UK has three times the penetration – highlighting that there is an opportunity to capitalise on this market gap.

“Customers have told us loud and clear they love the value and quality offered by own brands. They have given us a firm mandate to deliver more of this and we will achieve it by expanding our ranges, lowering our prices, further improving our quality and strengthening our brand presence,” he said.

“Customers also tell us that, whilst they enjoy getting the broad choice of brands at
Woolworths, they also appreciate the fact that own brands inject additional competition into the grocery sector by offering the same or better quality as national brands but at a cheaper price.”


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