May 6, 2015
Woolworths has again underperformed Coles in food and liquor sales. Today’s announcement of a 2.3% increase in comparable store sales leaves it below Coles’ 3.8% increase in the food and liquor department. Combined with a disappointing Big W and a Masters Hardware strategy that is not producing the anticipated growth, Woolworths’ management is introducing a ‘Lean Retail’ strategy designed to produce cost savings of more than $500m across FY 2015/16.
Competition between the two giants of the supermarket sector has been fierce since Wesfarmers purchased Coles (2007) and set it on a path to regain significant market share. The competition looks likely to escalate further as the two dominant chains now face the increasing presence of international heavyweights Aldi and Costco.