Retail analysts claims Coles and Woolworths have already cut their ranges and sharpened pricing on private labels in a bid to compete with Aldi and ensure shoppers still pop into one of the big chains for part of their shop.
Advertisement
Woolworths will slash 500 jobs and close 27 underperforming stores in a restructure that will cost the company nearly $1 billion.
Ezibuy stores are located in Auckland, Wellington, Palmerston North and Christchurch.
A customer carries a laden shopping basket at a Woolworths Ltd. supermarket in Sydney, Australia.
A decision to shut underperforming stores and defer the opening of some new outlets will cost the grocer A$344 million, while the implementation of its new strategy accounts for A$155 million of the total pretax impairment.
Banducci said today that when he took the helm five months ago, the aim was to make the company more customer-focused and “store-centric”. “The only thing I could say about them, they tend to be older stores and obviously lower, poorer performing stores in the network”, he said.
The 500 jobs that are on the chopping block are largely from Woolies’ support office and supply chain, whilst an additional 1,000 jobs will reportedly be moved “directly into our businesses to improve accountability and help us better support our store teams and customers“, which is a marvellous piece of vague corporate doublespeak.
Woolworths bought EziBuy in August 2013 from founders Peter and Gerard Gillespie to learn the New Zealand firm’s success in selling through multiple channels.
The retailer said 30 stores will close, including 17 supermarkets in Australia and six in New Zealand.
However, Woolworths said that the EziBuy’s synergies expected at the time of the acquisition were not realized while its performance has been below expectations.
Chief executive Brad Banducci, who started in the role in February, said a new operating model would see long-term performance measures introduced, including “sales per square metre” and “return on funds employed”.
The company said earnings before interest and tax from continuing operations, before significant items, would come in between $2.55 billion and $2.57 billion for the year.
Advertisement
BHP Billiton (BHP) was off 0.3 per cent and Rio Tinto (RIO) shed 0.4 per cent. Woodside (WPL)managed to climb 0.2 per cent, but Santos (STO) dropped 3.3 per cent, Origin (ORG) 0.8 per cent and Oil Search(OSH) 0.7 per cent.
