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Amazon in Australia has recorded sales of AU$292m for the 12 months ending 31 December 2018.

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Woolworths has announced plans to close up to 30 Big W stores, as well as launch a new media business called Cartology.

Big W closures driven by shifting shopping habits

Woolworths has announced plans to close up to 30 of its Big W discount department stores, as well as two of its distribution centres. The Big W business has struggled to deliver growth in the past few years. The chain reported a AU$110m loss in the last financial year and despite improvements to sales in Q1 this year, was still on course for another heavy loss. The chain has struggled to cope with shopper habits shifting to the online channel for general merchandise purchases and believes the closures will lead to a more robust and sustainable model in the longer term.

New media business will utilise data and new tenchology

Woolworths is to launch a new media business that will use new digital and data technologies to more directly connect suppliers to Woolworths customers. Woolworths has around 1bn searches a year on its websites for food and drink. The new business will recruit employees from existing external agencies such as Quantium, 1:1 media, Media Hub and TMS Australia to work with suppliers to deliver more timely offfers and content. Cartology will have its own managing director, Mike Tyquin, former CEO of Adshel, plus Woolworths veteran Rod Evenden will act as general manager of operations.

Online retailer Ocado has announced a partnership with Coles to develop its online grocery business in Australia. This is the fifth international partnership for the Ocado Smart Platform in less than 18 months.

Developing Coles’ online business

Coles is one of Australia’s largest grocery retailers, generating sales of AU$39.4bn in 2018. It operates 818 supermarkets across the country. The retailer is already a market leader in online grocery retailing in Australia with its Coles Online business and over AU$1bn of annual sales. Ocado will allow Coles to use its ecommerce platform for grocery and other food distribution related activities in Australia on an exclusive basis. The new deal will see Ocado’s technology and software develop Coles’ online grocery business in Australia.

The two companies will build two automated customer fulfilment centres (CFCs) as part of the deal, one in Sydney and one in Melbourne. Coles will invest up to AU$150m building these CFCs and on upfront costs to Ocado. Coles expects the partnership to approximately double its home delivery capacity.

Through Coles’ new partnership with Ocado, it hopes to better serve its customers in Australia’s larger urban areas through fulfilment from Ocado’s CFCs, while customers in less populated areas will benefit from Ocado’s store-pick software.

The agreement comes as retailers continue to scale up in the online channel to meet the challenge of ecommerce competition, such as Amazon adding grocery to its offer in Australia in October last year.

Ocado’s international expansion

Ocado's role as a provider of retail technology is continuing to gain momentum. The Coles partnership is Ocado’s fifth international deal in less than 18 months, following its partnership with Bon Preu Group in July 2018, Swedish retailer ICA and US retailer Kroger in May 2018, and Canadian retailer Sobeys in January 2018.

 

The Coles deal follows Ocado’s announcement of a £1.5bn retail joint venture with Marks and Spencer in the UK. More information for subscribers here.

In addition to the Ocado deal, Coles has recently expanded the range available via Uber Eats.

To understand more about how Ocado operates, subscribers can see our insight presentation about its Strategic Outlook.

Coles has increased the range that it offers for delivery via Uber Eats to include groceries.

Selected ranges include staples and impulse items

At the start of the year Coles started offering delivery of hot food in less than 30 minutes at its Pagewood, Sydney store via Uber Eats. Users could have ready-to-eat snacks, sandwiches, salads, pizzas, pies, curries and desserts delivered for a AU$5 delivery fee. The retailer has now increased the offer to include some grocery items such as milk, bread, dairy, fruit, cereals, biscuits and drinks. Coles is offering the new extended service from its Bondi Junction, World Square, Leichhardt and North Sydney stores.

Presentations

08/04/2019

We review Ocado's current performance, its growth forecasts for the next five years, plus progress against key strategic objectives.

Included in this report:

  • Ocado's five year sales forecast
  • Ocado's strategy
  • Ocado's international agreements
  • Ocado Smart Platform innovations
  • Ocado's fulfilment and delivery operations
02/04/2019
This in-depth guide to Australia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.
01/04/2019
This in-depth guide to New Zealand explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.
01/04/2019
See our up to date content plan for insight presentations on retailers, trends and channels globally.
25/03/2019

See how shoppers are using online rapid delivery and how manufacturers from across the world, can meet the opportunity.            

This report includes:

  • Shopper usage of within the hour delivery
  • Reasons to develop rapid delivery
  • Contact list of global providers, including meal aggregators and delivery couriers
  • Manufacturer case studies
  • Future developments, including personalisation and automation
View all presentations

Key presentations

This in-depth guide to Australia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

This in-depth guide to New Zealand explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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