Woolworths is culling its Select brand, but is it the right thing to do?

Posted by AFN Staff Writers on 6th June 2016

carts-419237_960_720Woolworths has revealed it is culling its mid-tier “Woolworths Select” private label brand as part of efforts to turn profits around.

But is it the right decision?

Interestingly, the news Woolworths Select is on the way out comes on the same day Credit Suisse analyst, Grant Saligari, told The Australian  he expects premium grocery retailers to eventually take a 20 per cent share of Australian supermarket shoppers.

Woolworths Select was introduced as a higher quality, more premium offering to its cheap HomeBrand (which Woolworths also announced it would be cutting earlier in 2016 in favour for a new “Essentials” range).

Although Woolworths Select is not the most expensive brand you can buy in the supermarket right now, could it have one day been if Woolworths did not axe it? If the supermarket instead decided to develop the brand and use it to go after that 20 per cent of premium grocery shoppers? 

Even though Jones the Grocery, a premium Australian grocery supermarket entered voluntary administration last week again for the second time, the growth of premium supermarkets in Australia appears inevitable. Especially with David Jones signalling its intentions to re-enter the space.

Woolworths’ premium Thomas Dux grocery stores have admittedly not been Woolworths greatest success story,  but perhaps its Select brand could have been a chance for the supermarket to try premium again and carve itself a niche in the market.