Woolworths has announced it will shift its focus away from price competition towards customers’ experience, as it prepares to take on Amazon Australia.
During its AGM in Melbourne today, Woolworths’ Chief Executive Brad Banducci emphasised the retailer’s desire to provide a better ‘experience’ for customers, staff and their greater community.
“With this focus and our newly established ways of working we are committed as a team to deliver for all our stakeholders, including our shareholders”.
The company also announced it will be changing its strategy from a ‘turnaround’ to ‘transformation’.
Many market commentators agree that Australian retailers should not attempt to compete with the e-commerce giant on price alone, affirming the need for engaging in-store experiences.
For the first time since 2014, Woolworths expects to post profit growth, following its decision to invest over a billion dollars over the past two years. The company has aimed to both reduce prices and improve in-store service.
Analysts expect continued strong growth for Woolworth’s December quarter. It follows the company’s streak of comparable store sales growth over the past five consecutive quarters.
Whilst Mr Banducci didn’t provide a trading update during the AGM, he revealed Woolworths’ sales performance for the current financial year has been ‘solid’.
For the first time since 2016, embattled discount retailer, Big W, reported its first same-store sales growth, with comps up 2.9%.
Banducci affirmed an opportunity to turnaround Big W’s performance is present, however, it would take time:
“We have a new senior team and plan in place and have made some good early progress but it remains a very challenging sector”.
Big W is expected to post another annual loss this year – the third consecutive – following a loss of $165 million over the past two years.
Woolworths has continued to invest in digital capabilities, following the rollout of ‘WooliesX’ earlier this year – a combination of its digital and customer loyalty functions.
In addition to launching its parcel collection service dubbed ‘PickUp’, the retailer is also reportedly testing many express delivery services.
