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New Aldi-Style Approach and Store Innovations Could make Woolworths Cheaper

Posted by on May 16, 2015 at 8:47 AM

Woolworths the Australian supermarket giant has been hit hard recently. Financial reports released by the company suggest that Woolies have been heavily wounded within the supermarket battle for top position. The recent blow has caused the brand to change their business model slightly along with implementing a range of quick fixes to improve the customer experience. 

New Aldi Style Approach and Store Innovations Could make Woolworths Cheaper

The company has publicly conceded to the fact that their stores are “not good enough.” This statement was released a week after Coles supermarkets issued financial results that blitzed the returns made by Woolies. There are some big changes coming our way with regards to the Woolworths experience, but, what will be interesting from a consumers perspective is how it competes within the supermarket arena to give us better value for money.

 

New Aldi Style Approach and Store Innovations Could make Woolworths CheaperBrad Banducci, Woolworth’s managing director has recently announced that the chain needs to cut costs by $500 million in efforts to “turbocharge” its outlets. Along with these cuts the company has also recognised that it needs to initialise certain quick fixes such as providing customers with better trolleys and improving lighting within stores. Their longer-term plans however, need more thorough attention some of which require their budget to be reviewed as well as the brand also introducing an Aldi styled own brand product range.

The aim of Woolies introducing an own brand range of labels is to provide customers with more consistently priced products as opposed to the fluctuating branded products they currently stock. All of these changes are not good news for the Woolies staff though, as the company announced that it will be axing 400 non-customer facing jobs. This is an additional 400 on top of the 400 previous jobs that the supermarket recently terminated in recent months.

The company states on their Strategy and Objectives page that “customers seek greater value and have more choices at their fingertips than ever before.” Increased competition from Coles and the entrance of Lidl and Aldi into the Australian market, I believe has applied pressure onto Woolies that it can’t compete with.

New Aldi Style Approach and Store Innovations Could make Woolworths Cheaper

Another statement I found interesting was “Mobile technology is rapidly changing how we view our world and giving us access to products and prices from around the world.” This ties in with my recent post about Australian brands charging heavily inflated prices compared to international competition. This is bad news for Woolies but great news for us customers, because the more competitive the Australian companies need to become on the world stage, the more affordable our products and services potentially can become. Could this be the beginning of the end of the Australia Tax?

Mr. Banducci was the group’s former liquor boss, but was appointed his new position of MD in February. Since then he has been questioned thoroughly about his plans financially and strategically moving forward. This follows his statements that the brand will “neutralise” Coles and “contain” Aldi on price.

New Aldi Style Approach and Store Innovations Could make Woolworths CheaperHe has acknowledged customer feedback that the company needs to be more competitively priced and that their ‘Everyday Rewards Scheme’ does not deliver enough value to customers.

To give you an idea about how badly the company has been performing, Woolworths recently reported total food and liquor sales for Q1 of 2015 at only being up by 2.3% ($10.6 billion). Compare this to Coles’ performance of 5.4% within the same quarter and you can understand why there is concern within the ranks..

 

Store Innovations

Woolworths in efforts to attract more customers to its stores will be introducing three new elements, ‘Fresh Sushi bars’, ‘Fresh, Bag and Bake’ and ‘MSA Beef & Lamb.’

 

Fresh Sushi Bars

New Aldi Style Approach and Store Innovations Could make Woolworths Cheaper

Coming to a supermarket near you, Woolworths will be introducing a sushi restaurant where you can choose from a range of handmade sushi. In-store chefs will prepare all fresh food onsite and I personally hope they adopt an Ikea / Costco model of cheap food to tempt customers with.

Fish, Bag and Bake

Woolworths will be implementing a new fish counter within its stores to encourage customers to feel confident cooking seafood at home. Basically you pick a fish, choose a sauce to go with it free of charge and Woolies seal it in a bag so all you have to do is whack it straight into the oven when you get home.

MSA Beef & Lamb

Woolworths was the first Australian supermarket to stock Meat Standards Australia, which is a specially certified and guaranteed standard quality of meat. They will be marketing this much more I can imagine.

 

New Aldi Style Approach and Store Innovations Could make Woolworths Cheaper

As a result I believe all customers will benefit from more consistent pricing (own label range), better looking stores and more innovative in-store experiences. Considering Woolworth’s current market share, this may well cause a domino affect across the industry for all Australian supermarkets.

So, in the spirit of adding more value for customers here’s a free shipping voucher from Woolies for all online purchases over the weekend (16th & 17th May). The only restriction is that you’ll need to spend over $100 to be able to apply the voucher at checkout.

Other notable T&Cs:

  • Valid only once per shopper
  • Orders must be placed by 3pm on the 16th May 2015
  • Delivery excludes Delivery Saver, flowers and tobacco items
  • The Woolworths voucher can not be used in conjunction with any other offer

 


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