Woolworths to close more stores, 500 HQ jobs to go now, new 3-5 year turnaround plan
The Woolworths Group has announced it is culling 500 head office jobs and closing seventeen Woolworths supermarkets as part of its revival plans.
On top of the seventeen Woolworths supermarkets to close, six of the group’s New Zealand Countdown supermarkets will shut up shop.
Four of Woolworths’ Metro Australian convenience stores will also close along with three hotels.
It is expected that the restructuring measures will cost the group AUD $959 million.
In an announcement by Chief Executive Officer, Brad Banducci, he said the cuts were part of a series of turnaround measures the group had started introducing in February 2016.
“Five months ago I said we would work hard to get customers to put us first, to improve our culture and rebuild momentum,” Banducci said.
“Today’s announcement demonstrates both the progress we are making and our absolute commitment to act quickly to rebuild the business by doing the right thing by our customers, shareholders, team and suppliers.”
Supermarket rollouts slowed down
“We have significantly slowed our new supermarket rollout program to focus on renewing our existing stores,” Banducci said.
“We will close some underperforming and non-strategic stores and cancel or defer pipeline stores to allocate more capital to renewing our existing store network.”
Some Big W stores on shutdown warning
The group revealed five of its Big W retail stores are likely to close over the next three years unless their sales improve.
“The transformation of Big W is progressing well under Sally Macdonald’s leadership and the impairments and other restricting costs of $151 million announced today help us set this business up for improved performance,” Banducci stated.
In late 2015, Woolworths hired Sally Mcdonald, to take charge of and turnaround its Big W stores as she did for high-fashion retail group, Oroton.
Woolworths’ online retail shop, EziBuy, has now been fully separated from Big W and the group is now exploring selling the internet shopping site.
Office jobs sent to the front lines
More than 1, 000 office jobs across the group will be moved directly into store positions to help improve accountability and to help better support stores.
“While we have had to make some tough decisions and this has ramifications for many of our team, we are confident we are putting in place solid foundations for the future and early results give us confidence we are on the right track,” Banducci said about the group’s turnaround plan.
“This will be a three to five-year journey and we are determined to drive sustainable improvements in sales per square metre and Return on Funds Employed to deliver value for shareholders.”
The job cuts and restructuring plans follow on from the group’s announcement at the start of 2016 that it would be selling or closing its home hardware stores in an effort to help turn its profits around.
The Australian Competition and Consumer Commission (ACCC) recently said it would allow Metcash (owner of IGA and Mitre 10) to make a bid to acquire Woolworths’ Home Timber and Hardware.
The Woolworths Group is yet to publish its 2016 financial year results.