Introduction to Woolworths Supermarkets

Introduction to Woolworths Supermarkets

Introduction

Woolworths Supermarket is a significant supermarket brand in Australia that has covered a large fraction of entire industrial domain. This article will focus on explaining different aspects related to the organization. Detailed information regarding company background, history, current operation, ownership, facts, and future strategy has been provided. Such information will help in formulating clear and concise overview regarding a vast range of organizational parameters. Different sections have been formulated by succinctly extracting information from a number of authentic sources.

This article provides the information regarding Woolworth supermarket located in Australia. The article provides different types of information regarding Woolworth such as company background, current operations, ownership and facts. In addition to this, the future strategy of the organization is also elaborated in the article that will help company in achieving all the business and strategical goals efficiently.

Company Background

Woolworths or Woolies is a large-scale chain of Australian supermarkets and grocery stores that is directly owned by Woolworths Group (Arli, Dylke, Burgess, Campus & Soldo, 2013). Headquartered in Melbourne, the organization was founded 95 years ago in 1924 and has grown exponentially in overall scale of operations. Mainly due to vastness of operations, the organization has been able to formulate a duopoly with Coles Supermarkets by controlling more than eighty percent fraction of the entire market. The organization possesses expertise in groceries – packaged foods, meat, vegetal and fruits – but also deals in magazines, household products, pet supplies, and health & beauty products. Woolworths has also initiated an online store where end users can conveniently order different products with ease and grace. At present, the organization has more than 1,000 stores across Australia and employs over 100,000 employees. In 2019, Woolworths Supermarket generated an overall revenue of over AUD 39 Billion (Grimmer, 2017).

History

Woolworths Group, initially known as Woolworths Limited, was founded by five Australian entrepreneurs – Ernest Williams, George Creed, Cecil Scott Waine, Stanley Chatterton, and Percy Christmas – on September 22, 1924. The first store opened by the entrepreneurs in Sydney was known by the name “Woolworths Stupendous Bargain Basement”. At this period of time, the first store only had 29 shareholders who did not have any interest for accelerating the growth of organization. With passage of time, overall trading operations continued to increment and shareholders started buying more capital. Dividends paid by the company tend to increase 10 times from 5% to 50% within third year of operation (King, 2014).

In 1927, the organization officially became a ‘chain’ as the second store opened in Brisbane with same zeal. With 1929, first store was opened in New Zealand and within 6 years of business, 16 stores were initiated in Queensland, New South Wales, and Western Australia. With successful operations of Woolworths, the organization began to expand their grocery range and opened up self-service store in Sydney in 1955.

In the context of acquisition, Woolworths acquired Tasmanian grocery brands – Roelf Vos and Purity – in 1982. Further, American supermarket giant – Safeway Inc. – was also acquired by Woolworths in 1985 along with naming rights. During the time of acquisition, Safeway had over 126 stores across New South Wales, Queensland, and Victory. By 2017, the organization was successful at rebranding all Safeway stores feasibly (Woolworths Group, 2019).

Current Operations

Woolworths has grown considerably large in terms of scale and scope along with vastness of overall operations. The organization operates across 1024 stores in Australia and relies on more than 115,000 team members who support different business operations in distribution centers, support offices, and stores. In 2019, the organization had 43 metros convince stores and 981 supermarkets in different Australia regions.

Further, the organization has obtained potential control over a large number of stores that are located in two different countries – Australia and New Zealand. Woolworths Supermarket operates within the same domain between both countries and has grown significantly large in the context of overall operations (Woolworths Group, 2019). Thus, the organization operates internationally and has obtained a considerable fraction of the marketspace. 

For managing large scale of operations, the organization has a well-established Board of Directors, Group Executive Committee, and Board Committee that looks forward towards seamless management of various key operations in a coordinated manner. Necessary policies, procedures, and operating standards are set up by various board members which are then communicated forward to be adhered to by all team members. Operations of the company and the value chain that the operations are guided towards can be studied here deeply - Woolworths value chain analysis.

Ownership

Woolworths Supermarket is a subsidiary of the parent company – Woolworths Group - that has an extensive interest within Australia and New Zealand. In the context of revenue, it is the second-largest company in Australia after Wesfarmers. The parent company has over 200,000 employees and possesses a number of subsidiaries in liquor, general merchandise, finance, and hotel & gambling. At present, Gordon Cairns and Brad Banducci are Chairman and CEO of Woolworths Group. Due to a prominently large number of operations amongst a wide range of subsidiaries, the organization has been capable of generating an overall revenue of AUD 55.669 Billion. (Woolworths Group, 2019)

Facts

There are multiple interesting facts regarding Woolworths Australia, some of which have been mentioned below –

  • Different Woolworths supermarket stores serve over 21 million customers per week and an average of 3 million customers per day.
  • Woolworths is single-use plastic bag free since 2018 and has taken considerable steps towards maintaining environmental sustainability. The overall impact is considerably large as the organization eliminated 3.2 billion units of single-use plastic bags from circulation (Woolworths Food Group, 2019).
  • There have been multiple rewards and loyalty schemes that were initiated by Woolworths for engaging and retaining a large number of customers. Such loyalty schemes focus on providing additional discounts to a wide range of customers that frequently shops from different stores.
  • A reward program named as Frequent Shopper Club (F$C) was initiated by Woolworths Supermarket in 1992 and is actively used till date. Under this program, customers would obtain a $20 voucher for every 2000 points accrued.
  • Woolworth holds a number of training programs (Training programs at Woolworths) for its employees for ensuring customer satisfaction and customer retention.
  • Woolworths also has a wide range of private label or generic brands that are categorized under – Essentials, Woolworths Food Range, Gold, Macro Wholefoods Market, Delicious Nutrition, and The Odd Bunch. A considerably large number of products are marketed under these private labels to different customer segments.
  • With significant presence amongst a wide range of cities, towns, and sub-urban, the organization has taken part in numerous community efforts. Woolworths is committed to positively impact numerous attributes and incorporate a wide range of positive changes. The organization has specifically initiated numerous programs aiming at maintain health and well-being of Australia, creating employment opportunities, supporting communities facing natural disasters (Woolworths Group, 2019).
  • Woolworths strongly supports Variety – The Children’s Charity by allowing customer to donate $2.00 with every purchase. Other initiatives undertaken by the organization include Earn and Learn, S.T.A.N.D., Free Fruit for Kids, White Ribbon, etc. The organization also initiates various food rescue programs with partners such as Foodbank and OzHarvest.

Future Strategy

Towards 2020, Woolworths Supermarket will focus on six different strategic objectives that will deliver future-fit business and help in obtaining long term suitability. Woolworth's PESTLE and Swot analysis has been a perfect guideline for this creating this type of strategy.  The organization has an aim of creating better value for all internal and external stakeholders who are associated with various operations. The first strategical objective is to build more profitable and sustainable customer relationships for attracting and retaining the customer for the long-run. The organization has an aim of moving towards connected retail for enhancing in-store journey of various customers that will help in developing customer loyalty in an optimal manner. Further, Woolworths has the aim of maintaining a position in the retailer industry by incorporating necessary measures that will aid in supporting business activities in the long run (Woolworths Group, 2019). The organization also has the objective of integrating lean operating model across various core platforms in an optimal manner and create significant differentiation across various key operations.

Further, the organization has a strategic aim of unlocking value in portfolio by continuously driving synergies and efficiencies across multiple groups. Above all, the organization aims to embed good business journey throughout various attributes of the business. This will aid in attaining the primary vision and mission of becoming most responsible retailers in entire world and simultaneously contributing towards the betterment of various communities.

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Article By:

Paul Smith

Ex- Management faculty of University of Sydney. Along with an extensive interest in management studies, he is a sports enthusiast who loves to spend time in the basketball court. Just like smart playing the opposition in basketball, he smartly instills

Paul Smith

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References
  • Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). WOOLWORTHS AUSTRALIA AND WALMART US: BEST PRACTICES IN SUPPLY CHAIN COLLABORATION. Journal Of Economics, Business, And Accountancy | Ventura, 16(1). doi: 10.14414/jebav.v16i1.123
  • Grimmer, L. (2017). The diminished stakeholder: Examining the relationship between suppliers and supermarkets in the Australian grocery industry. Journal Of Consumer Behaviour, 17(1), e13-e20. doi: 10.1002/cb.1674
  • King, M. (2014). 10 facts you need to know about Woolworths Limited. Retrieved 28 December 2019, from fool.com.au/2014/02/06/10-facts-you-need-to-know-about-woolworths-limited/
  • Woolworths Food Group. (2019). Woolworths Food Group’s plan to get customers to put us first - Woolworths Group. Retrieved 28 December 2019, from woolworthsgroup.com.au/page/media/Latest_News/Woolworths_Food_Group%E2%80%99s_plan_to_get_customers_to_put_us_first
  • Woolworths Group. (2019). Strategy and objectives - Woolworths Group. Retrieved 28 December 2019, from woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives