Woolworths’ new CEO unveils his growth strategy
Newly appointed CEO of Australian retail giant Woolworths Limited, Grant O’ Brien, has unveiled a multi-pronged strategy to expand the company’s operations in Australia.
In a series of media statements, the company announced plans to create 10,000 new retail jobs before the current financial year ends, as well as a five-year plan to double sales of Woolworths supermarkets’ own brand products.
According to the statements, Woolworths plans to open 39 new supermarkets, seven new BIG Ws and 15 new Masters Home Improvement stores before the end of the financial year.
Speaking at an investor briefing on Wednesday 2 November 2011, Woolworths Limited’s CEO Grant O’Brien said, “The increase in store openings is indicative of Woolworths’ strong focus on building a long term pipeline of properties so it can deliver convenience, range, quality and value to more customers.”
Plan to double Woolworths supermarkets’ own brand sales
At the briefing, Woolworths’ Managing Director of Australian Supermarkets, Tjeerd Jegen announced plans to double Woolworths’ own brand sales by offering more products and lower prices. Mr Jegen said the plan reflects a “growing demand for value and quality”. He said that Woolworths substantially lagged behind other international retailers in terms of the proportion of own brand sales.
Woolworths’ Homebrand has approximately 850 products. Its mid-range, mass market Select brand carries approximately 1,000 products and its health and wellbeing brand, Macro, encompasses approximately 400 organic, gluten free and ‘good for you’ lines.
Mr Jegen said, “Customers 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.”
Renewed focus on online shopping
Woolworths Limited also signalled its intention to capitalise on Australia’s growing demand for online shopping.
Mr O’ Brien outlined the opportunities presented by multi‐channel retail, outlining Woolworths’ plan to “leverage its bricks and mortar retail strength, Everyday Rewards data and supply chain expertise”. He said that under Woolworths’ incoming Director of Multi‐Channel Operations, Penny Winn, the company will strengthen its focus on online and drive the business towards future growth.”
Dick Smith business under strategic review
Mr O’Brien also announced a strategic review of its Dick Smith consumer electronics business. He said that consumer electronics, as a retail category has been experiencing significant challenges, particularly in relation to tightened customer spending on discretionary products, category deflation and the effects of the high Australian dollar.
“Dick Smith is a strong brand which has performed well relative to some of its competitors, but we need to make sure we are deriving the best possible value from the business. Woolworths Limited intends to report further on the review at its half year results in February 2012,” Mr O’Brien said.