Woolworths prepares for Amazon grocery invasion

Posted by AFN Staff Writers on 28th November 2016

Woolworths says it is preparing for the rumoured entry of AmazonFresh into Australia in 2017 by already establishing a new division to deal directly with the threat to its customer base.

Speaking at Woolworths Annual General Meeting (AGM) late last week, Gordon Cains, said Woolworths did not want to have its personnel in the supermarket businesses worrying about the entry of Amazon so a separate unit has been set up.

Australian Food News has previously reported on AmazonFresh, Amazon’s fresh food and grocery service which has been servicing American shoppers wanting to buy grocery items online and have them delivered to their doorstep since 2007. The service is also now available in parts of London.

In October 2016, Australian Food News reported that Amazon is soon expected to open brick-and-mortar convenience stores in America, so it is no surprise Amazon may also expand its grocery services by establishing itself as an online option in Australia.

Hope for Woolworths’ future

Despite the threat from Amazon, Woolworths Chief Executive Officer, Brad Banducci, used last week’s AGM to tell shareholders that the supermarket group is getting back on track.

“I’m pleased to say that over the past ten months, because of many large and small decisions, we have made significant amount of progress,” Banducci said.

“Clearly we still have a long way to go but it is very pleasing to now be underway,” he stated.

Since Banducci was appointed as CEO of Woolworths in February 2016, the company has taken a number of significant steps to start turning around its results towards profit growth.

Woolworths has decided to close its failed hardware chain, Masters, after it cost Woolworths more than AUD $600 million in losses. It sold its other hardware investment, Home Timber and Hardware to independent grocery wholesaler, Metcash, in August 2016.

Woolworths also decided to relocate more than 1, 000 team members from its head office into stores as front-line support, and has announced some supermarket closures, and is also  considering the possible sale of its EziBuy chain.

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