Is Big W Struggling?
Is the Woolworths owned Big W back in trouble with sales falling 17 per cent during COVID lockdowns?
In the last quarter Big W sales fell from $1,115 billon to $929m with the discount retailer now looking to make up lost sales in the next quarter, the only problem claim analysts is that they bare coming under pressure in the clothing category with KMart and Target picking up market share.
This week Belkin announced a new deal with Big W to sell audio gear with observers claiming that supply across multiple categories is set to be difficult for the Woolworths owned retailer who has not ruled out selling the business in the future.
Trading restrictions impacted 91 Big W stores during lockdowns with the business picking up business online with eCommerce sales growing 124% in the quarter to $233M almost a third of overall sales.
One observer said”The business is going to find it difficult to make up the decline in the next quarter as there are big shortages of toys and leisure products and these products are critical in the second quarter running into the peak Christmas new year period”.
“The problem for Big W is not CE or appliances, it’s apparel with Kmart and Target taking share, they are also having to compete with overseas online stores”.
Woolworths incurred $102 million in additional COVID costs across cleaning, security, additional staff and supply chain part of which was for Big W.
Over 22,000 staff were forced to isolate since the beginning of the Delta variant.
Moreover, the Woolworths store network has had over 1,500 exposure sites.
Subsequently, Big W team members assisted Woolworths Supermarkets across stocking and logistics.
Woolworths noted it’s been a constant battle rebalancing stock between various distribution centres to secure inventory as demand increased.