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Woolworths in Australia has launched a new concept store called 'The kitchen' by Woolworths, focused on health, wellness, organic and eco-friendly innovation.

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Countdown in New Zealand has moved to simplify its leadership team.

Leadership team reduced to 11 people

The Woolworths-backed retailer has reduced the number of people it its leadership team to 11 from 17. The shake-up of the management comes following new CEO Natalie Davis having taken over the leadership of the business in July this year. The job cuts are understood to be across a number of divisions within the company. The New Zealand retailer, which has 180 Countdown supermarkets, grew sales by 2.6% in Q1 this year and continues to focus on offering low prices, as well as growing its online capabilities via its new CountdownX function.

UK-based, fast-expanding, specialist fuel forecourt retailer, Euro Garages has made another international acquisition; moving into its third continent with the purchase of 540 fuel forecourt sites from major Australian supermarket operator Woolworths.  The expected completion of this deal in early 2019 will boost Euro Garages' total global network of sites to 5,250 across Europe, the US and now Australia.

Woolworths will remain as wholesale supplier to network

As part of the deal, Euro Garages and Woolworths have entered into a 15-year commercial agreement which will see Woolworths maintain supply to these 540 forecourt stores on a wholesale basis.  This will enable Euro Garages to maintain a credible and competitive convenience offer, while Woolworths will benefit from the further expansion of the site network under Euro Garages ownership.  Euro Garages will also maintain the existing Woolworths loyalty programmes on both fuel and grocery purchases.  The fuel for the sites will continue to be supplied by Australian oil company Caltex.

Mohsin Issa, joint Chief Executive, Euro Garages commented:

'We are the leading independent petrol forecourt retailer in Europe and are having great success in the US.  The Woolworths assets present a further fantastic opportunity to further grow our international footprint and deliver our best-in-class retail experience in a new geography.  We are committed to investing in the site network, introducing leading retail brands, developing the alliance with Woolworths and working with the exceptional management team.' 

Woolworths has released Q1 results with sales up 1.9% to AU$14,853m.

Australian Food sales up 1.9% to AU$9,870m

Food sales slowed in the quarter, particularly at the start of the period when Woolworths removed single use plastic bags from its stores and changed the phasing of promotional activity from the previous year. Despite this, customer metrics and LFL sales remained strong, tracking 1.8% for the quarter - camparible to those released by Coles. Average prices declined 1.0% in the quarter, with the retailer adding c.260 items to its Always and Dropped price campaigns. This means that over 5,000 items are now included in these schemes. The retailer continued to improve its network, opening three net new stores and renewing 15 in the quarter.

Woolies X sales up 25.6% to AU$343m  

Woolworths has split out its Woolies X sales for the first time in its results - the sector of the business that overseas online food sales and loyalty activity. Online penetration reached 3.3%, up from 2.7% in the same period last year, driven by the increasing availability and popularity of Pick Up, improved online experiences and customer engagement via digital channels. During Q1 the business has also trialled an ultra-convenient delivery service in Sydney and Melbourne, scan and go tehcnology at Double Bay in Sydney and relaunched the Woolworths app. Woolworths Reward customers continued to increase, with improvements in direct marketing capability and personalised offers for customers. 

Endeavour Drinks sales up 3.0% to AU$2,101m

LFL liquor sales grew 1.7% with both Dan Murphy's and BWS delivering positive momentum. The slowdown in sales was attribited to an overall softening market, in wihich Woolworths is the market leader. Online liquor sales continued to see double-digit growth, with 472 BWS stores now online enabled and 7% of Dan Murphy's sales now via the channel (50% delivered and 50% Pick Up).

New Zealand Food sales up 2.6% to NZ$1,679m

Price deflation of 1.8% during the quarter and store closures caused a drag on performance. Despite this LFL sales grew at 4.0%, with strong sales in infant formula milk and customers responding to ongoing price activity, with over 4,400 items now in the Price Down campaign. Online sales grew 40%, with strong growth in Pick Up and Countdown X further establishing itself as a dedicated business unit.

Despite slowdown, outlook remains positive

Woolworths Group CEO, Brad Banducci, said, “While it was a more challenging quarter for sales, customer and brand metrics were strong across the Group, especially in Australian Food reflecting the underlying health of our business. All businesses are now focused on delivering an exceptional Christmas experience for our customers.”

Presentations

04/02/2019

An essential summary of trading priorities, latest developments, and other key commercial insights for Woolworths Australia.

13/09/2018
We examine the latest retailer performance in Australia, as well as review the major trends that we identified at the start of 2018.
23/07/2018
In this insight presentation we look at the EMD buying group, its members and strategy.
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This in-depth guide to Australia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for Woolsworths Ltd.

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