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Big W First Profit Since 2016, CE A Growth Category

BIG W has reported a first half profit for the first time since 2016 with a restructuring of the consumer electronics categories contributing to some of the growth.

The $50 EBIT profit was delivered off a 2.8% lift in sales.

In the quarter to December 30, 2019 Big W delivered sales of $2.149 Billion Vs 2.09 Billion in the prior year.

Woolworths executives said that the result was achieved despite a “challenging market”.

They also said that a major restructuring of categories had contributed to their profit growth.

In the consumer electronics category, which is managed by Category Manager Taren Singh a move to better buying and improved cost controls has led to a marked increase in performance for the discount retailer.

During the past six months the retailer has moved to expand their sale of branded consumer electronic products from Companies such as Apple, Cygnett, Belkin, Logitech, Sony, Polaroid and Fitbit.
Several distributors including the Crest Company and Cygnett have reported increased sales from doing business with Big W.

As part of the restructure some brands have been dropped with categories such as DVD players facing an end of life issue.

According to several brands Big W management have culled several brands and related products due to poor sell through.

These have been replaced with products that have delivered a lift in sales with the retailer now witnessing demand for wearables such as smartwatches and accessories as well as headphones and portable sound gear this has, led to category growth.

The retailer is also looking to grow their online business; however, they have not revealed what contribution Big W’s online business is delivering to the overall result.

Last August Big W announced our commitment to reduce emissions to 60% below 2015 levels by 2030, which is consistent
with a +1.5-degree trajectory.

Big W has also raised over $3.8 million to date to support the local communities impacted by the bushfires.

In addition to this, Woolworths also committed $250,000 to animal welfare and rescue organisations as well as food for wildlife food drops, $200,000 in BIG W and Woolworths gift cards
to local schools, supplied products to on the ground support crews and evacuation centres, and last month, offered a group-wide 10% discount to volunteer firefighters and emergency services personnel.

Big W said ‘It was a half with many positives but also material challenges. While some of the challenges will continue to be felt in the second half, as a business, we also have a lot to be positive about as we look forward to moving from ownership to partnership with Endeavour Group, building out the Woolworths Group digital retail ecosystem and working with our partners
and other stakeholders to create a better tomorrow.”

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