Woolworths Group (Australia)

This article is about the Australian retail company. For retailers of a similar name, see Woolworth's.

Woolworths Limited

Company type	Public (ASX:WOW)
Industry	Retail
Founded	1924
Headquarters	Bella Vista, New South Wales , Australia
Area served	Australia New Zealand Hong Kong India
Key people	James Strong, Chairman Michael Luscombe, CEO
Revenue	A$53.7 billion (2008)
Net income	A$2.6 billion -including share buyback-(2008)
Number of employees	195,000
Divisions	Supermarkets (Woolworths, Safeway, Food For Less, Woolworths/Safeway Liquor, Flemings), Petrol (Caltex Woolworths/Safeway), Liquor (BWS, Dan Murphy's), General Merch(Big W), Consumer Electronics (Dick Smith Electronics, Dick Smith PowerHouse, Tandy)
Website	woolworthslimited.com.au

Woolworths Limited headquarters in the Norwest Business Park

Woolworths Limited is a major Australian company with extensive retail interest throughout Australia and New Zealand. It is the:

• largest retail company in Australia and New Zealand by market capitalisation and sales
• largest food retailer in Australia and one of the two largest in New Zealand
• largest takeaway liquor retailer in Australia
• largest hotel and poker machine operator in Australia
• 19th largest retailer in the world (may change from time to time) -Deloitte-

Australian Divisions

Supermarkets

• Woolworths – The company's premier supermarket chain, which operates in every Australian state and territory. The supermarkets are often colloquially known as "Woolies" and have used the slogan 'The Fresh Food People' since 1987.
• Woolworths Liquor – A department of Woolworths supermarket stores. They are not located in Queensland and Tasmania, as State law there prohibits liquor sales at supermarkets. These stores were formerly known as "Mac's Liquor".
• Safeway – The trading name for Woolworths supermarkets in Victoria. In August 2008, Woolworths announced it would be rebranding these stores as Woolworths. As at December 2008 Safeway remained by far the dominant brand in Victoria, with only a handful of Woolworths' branded stores. However the Woolworths brand will be slowly rolled out throughout Victoria as the stores are refurbished.
• Safeway Liquor – A department of Safeway supermarket stores.
• Food For Less – Discount supermarket chain located in Queensland and New South Wales
• Flemings – Group of four supermarkets located in Sydney and the Central Coast (the remnants of a chain purchased in the 1960s).
• Thomas Dux Grocer - Upmarket supermarket / deli chain launched in 2008
• Macro Wholefoods Market - Organic Food and produce chain, purchased in 2009 and due to be rebranded to Thomas Dux Grocer. The Macro Wholefoods branded organic products (100 line items) will be sold through Woolworths and Thomas Dux Grocer.

Liquor

• BWS – (Beer Wine Spirits) Liquor stores located away from the company's supermarkets.
• Dan Murphy's – Large liquor barns often referred to as Liquor Supermarkets. Dan Murphy's is one of the company's best growth performers, with plans for up to 100 stores (from the current 55) to exist within the next 2–3 years.

Hotels

• ALH Group – Hotel and Poker Machine operator, which is 75% owned by Woolworths Limited.

Petrol

• Caltex Woolworths/Safeway – Petrol stations located both free standing and adjacent to Woolworths and Safeway supermarkets

General merchandise

• Big W – Discount Department Store chain, which sell a wide range of general merchandise. BIG W represents about 8% of group sales and reputedly has aggressive expansion plans compared with competitors Kmart and Target.

Consumer electronics

• Dick Smith Electronics – Sell a wide range of consumer goods such as computer products, as well as hobby electronic products.
• Dick Smith Powerhouse – Larger Dick Smith stores with a focus on consumer entertainment products.
• Tandy – Similar to Dick Smith Electronics stores, but smaller and lacking the hobbyist components.

Everyday Services

• Everyday Rewards - Loyalty program offering customers fuel saving offers, Qantas Frequent Flyer Points, and personalised shopping offers.
• Everyday Money - First product is the Everyday Money Credit Card. Points are earned for purchases made at Woolworths Limited stores, points are converted to shopping vouchers.
• Everyday Mobile - Pre-paid mobile service - $2 SIM cards are purchased in stores and recharge available in store or online.

Home Improvement

• Lowes Hardware Australia - In 2009, Woolworths announced a joint venture with US home improvement retailer Lowe's to enter the home improvement market. The first store will be located in Coolaroo, Victoria and is scheduled to open in late 2011.

New Zealand Divisions

Progressive Enterprises

Progressive Enterprises (PEL) runs the following supermarket chains:

• Countdown - Progressive Enterprises' and Woolworths' New Zealand flagship supermarket chain - 77 full-service discount supermarkets, operating across the North and South Islands of New Zealand.
  • Woolworths - 48 full-service supermarkets, operating across the North and South Islands of New Zealand, plus Waiheke Island - all stores rebranding to Countdown by late 2014.
  • Foodtown - 25 full-service supermarkets, operating in Auckland, Hamilton, and Tauranga - all stores rebranding to Countdown by late 2014.
• SuperValue - franchised convenience supermarket
• Freshchoice - franchised full-service supermarket
• Woolworths @ Gull - 22 Woolworths Quickstop and Woolworths Micro convenience supermarkets, operating in the North Island on Gull Petroleum fuel sites.

PEL also operates internet grocery stores in the name of Woolworths Home Shopping and Foodtown Online.

Dick Smith Electronics NZ

• Dick Smith Electronics – sell a wide range of hobby electronic products and consumer goods such as computer products.
• Dick Smith Powerhouse – Large stores with a focus on consumer entertainment products.

India

• Croma/Tata Group Venture – In 2006 Woolworths and the Tata Group of India announced an electronics retailing venture on the subcontinent. Due to the legal framework, foreign companies are prevented from operating retail businesses in India. Due to this, Woolworths will act as a wholesaler to the Tata Group. The stores are based on the Dick Smith Powerhouse format.

Former chains and brands

• Woolworths Food Fair – The name given to the company's growing food-retailing interests in the 1960s to differentiate them from the variety-based stores. This name was absorbed when the decision was made to use the original Woolworths name for the company's food stores and supermarkets instead of its variety stores.
• Woolworths Variety – The name given to the company's traditional variety stores to differentiate them from the company's food-retailing interests, when the decision was made to use the original Woolworths name for the company's food stores and supermarkets instead of its variety stores. These variety stores were progressively divested as Woolworths focused on food retailing and developed large-scale discount department stores.
• Woolworths Family Centre – Woolworths opened its first hypermarket at Booval near Ipswich, Queensland in November, 1969 under the Big W name. A second hypermarket was opened in 1970 in Indooroopilly, Brisbane, under the Woolworths Family Centre name. The early popularity of these stores led to Woolworths establishing hypermarkets around Australia using the Woolworths Family Centre name. However the concept failed to perform, and the hypermarkets were re-established as separated Woolworths supermarkets and Big W discount department stores in the late 1970s to early 1980s.
• Crazy Prices – A variety store chain that sold discounted merchandise. These stores were sold to (and formed part of) rival Go-Lo in 2001, although the last store with Crazy Prices branding didn't close until 2005 in Port Macquarie. Its slogan was "The Bargains are Better".
• Rockmans – Women's clothing retailer acquired by the group in 1960 and was a major operating division until its sale in 2000.
• Woolworths Plus Petrol – The original name of the petrol sites owned by Woolworths before the joint venture with Caltex.
• Woolworths Metro – Inner-urban convenience stores located in the key metropolitan areas of Sydney and Brisbane selling a range of pre-prepared meals for the 'time poor' customer. Woolworths Metro was also the name of Woolworths' flagship five-storey store at Town Hall in Sydney until 2003 when it reverted back to the Woolworths supermarket brand.

• Roelf Vos and Purity supermarkets - Two Tasmanian supermarkets located in the north and south respectively. Bought out by Woolworths in the early nineties however they continued to trade under these names for some time (with the sub-heading of 'The Fresh Food People' still added) Until eventually dropping the names in early 2000.

History

Woolworths in the Sydney CBD

Woolworths opened its first store, the Woolworths Stupendous Bargain Basement, in the old Imperial Arcade in Pitt Street, Sydney, on 5 December 1924. Its nominal capital was just £25,000 and although 15,000 shares were offered to the public, only 11,707 shares were subscribed for by 29 people, including the five founders – Percy Christmas, Stanley Chatterton, Cecil Scott Waine, George Creed and Ernest Williams. One of the foundation investors was Preston Lanchester Gowing, the then chairman of Gowings. The name on the draft prospectus drawn up by Cecil Scott Waine was "Wallworths Bazaar" – a play on the F.W. Woolworth name (the owner of the Woolworth's chain in the United States and United Kingdom). However, according to Ernest Robert Williams, Percy Christmas dared him to register the name Woolworths instead, which he succeeded in doing after finding out the name was available for use in New South Wales. Accordingly, Woolworths Ltd in Australia has no connection with the F.W. Woolworth Company in the United States.

The new Woolworths store was innovative; it was the first variety store in the world to use cash registers that print receipts for customers.

Christmas set up a New Zealand general merchandise operation in Wellington in 1929. Woolworths New Zealand opened its first food store in Auckland in 1956, and supermarkets in 1971. Woolworths New Zealand was sold to the company that is now Lion Nathan in 1979, then sold to Dairy Farm International in 1990, now owned by Progressive Enterprises, a subsidiary of Foodland Associated Limited of Australia. In 2005 Woolworths Limited and Metcash Holdings (IGA) agreed to purchase a demerged Foodland, and Progressive Enterprises and 23 of Foodland's Action supermarkets came under Woolworths' ownership. This acquisition brought total store numbers in Australia to near 750.

During the late 1920s the company grew, with a second store in Sydney and stores in Brisbane and Perth. It grew further in the 1930s, despite the depression, until by the end of 1933 it had 23 stores. In 1933 the first store in Melbourne was opened. On April 1, 1936 the company bought eight stores from Edments Ltd and opened its first store in Adelaide.

World War II slowed the growth of Woolworths and the Australian and United States military used Woolworths' warehouses in Sydney for storage. After the war expansion was rapid and in 1955 Woolworths opened its 200th store, in the Civic Centre in Canberra (since closed). At this point Woolworths was still mainly a variety chain and had not moved into the food sector that uses the "Woolworths" brand today. This move began in 1955 when it opened its first supermarket at Beverly Hills, south-west of Sydney. The company bought the Rockmans chain of women's clothing stores in 1960.

In the 1970s, the company started to open Big W discount department stores and the slow removal of many variety products from the supermarket and variety stores began. This process finished in 1989 when the last of the Woolworths Variety stores was closed (except the one in Rundle Mall) and the "Family Centres" were split into separate Big W and Woolworths supermarket stores. Woolworths acquired the Dick Smith Electronics consumer electronics chain in 1981 and expanded the consumer electronics arm of its business with the purchase of the Tandy chain in Australia from InterTan Inc in 2001. The company sold the Rockmans chain in 2000.

In 1985 the acquisition of the 126 Safeway stores in eastern Australia made Woolworths the largest food retailer in Australia. Safeway stores were in Victoria, New South Wales and Queensland and included Food Barns in Queensland and northern New South Wales. The stores were acquired following an agreement whereby Safeway acquired a 19.99% interest in Woolworths Limited. Woolworths and Safeway supermarkets in Victoria traded under the Safeway brand, and Safeway's Food Barns in Queensland and New South Wales became part of Woolworths.

Around this time the supermarket chain had run eight small supermarket chains including the Queensland-based Food For Less and the Sydney-based Flemings, both of which survive.

In 1989 the company was acquired by Industrial Equity Limited and was a wholly-owned subsidiary until 1993, when it was floated in the biggest share sale (at that time) in Australia's history.

In 1996 Woolworths entered the petrol market, initially with wholly-owned "Plus Petrol" outlets located in shopping centre parking lots. In 2004, as part of a loyalty program aimed at attracting customers to supermarkets through the lure of four cent a litre discounts, Woolworths entered into an agreement with Caltex to co-brand some Caltex outlets as Caltex Woolworths. These joint venture outlets are supplied with fuel by Caltex and with groceries by Woolworths, and accept Woolworths cards and discount dockets.

In 1999, Woolworths began a joint venture with the Commonwealth Bank called Woolworths Ezy Banking, but was scaled back by 2006. In 2005 the company reached an agreement with the ANZ Banking Group to install ATMs at Woolworths locations. Additionally, by 2008 it had invested in financial services infrastructure and expertise, building a team of 50 staff for this purpose.

In 1997 Woolworths opened its first Metro convenience store, in Sydney, converting their premier variety store for 32 years to this format with the lower ground floor specialising in a large range of ‘prepared meals’ to cater for the increasing numbers of city dwellers. Subsequent stores opened in Coogee, Boronia Park and West Pennant Hills in Sydney and Ascot in Brisbane. Stores that have since been sold or re-branded are Newtown, Waterloo and its Sydney city store (all in Sydney).

Woolworths started to expand into liquor businesses with the acquisition of Dan Murphy's in 1998. By 2001, the BWS chain had been established. With Queensland licensing laws dictating that retail outlets must be operated by a hotelier, Woolworths moved into the hotel industry in 2005 in a joint venture with experienced hotel operator Bruce Mathieson, purchasing hotelier Australian Leisure and Hospitality Group (ALH). Later in 2005 the ALH Group expanded its portfolio to 250 hotels by acquiring the Taverner Hotel Group and the Bruce Mathieson Group. The ALH Group is 25% owned by Bruce Mathieson and 75% owned by Woolworths. Statistics provided during the acquisition of the Taverner group showed that over one third of sales are made up of gaming/poker machine takings. The number of poker machines owned by Woolworths and Bruce Mathieson after ALH acquisitions was 10,722.

In 2006 the company had three major events:

• in June it opened a buying office in Hong Kong to cut out the intermediary in sourcing foreign-produced items;
• it announced a venture with the Tata Group in India to introduce Dick Smiths Electronics stores to that country;
• in September it announced that it had taken a 10% strategic stake in the The Warehouse Group in New Zealand.

In 2006, Woolworths rolled out new Retalix point of sale systems running on IBM POS hardware with LCD touchscreens throughout all its stores.

In August 2007 Woolworths announced that it was planning to launch a general purpose credit card in 2008. It is expected to offer credit cardholders reward vouchers redeemable through its store network. HSBC was subsequently named as its credit card partner. Woolworths subsequently announced that the Woolworths Everyday Money MasterCard would be launched on 26 August 2008 and allows customers to earn shopping cards redeemable at Woolworths group retailers. It was suggested Woolworths could earn approximately $20m from credit cards in three years and that it was targeting 100,000 to 150,000 cardholders in the first year.

Into 2008, a Wake Up Woolworths campaign, largely funded by the Construction, Forestry, Mining and Energy Union, was pushing Woolworths to sever its relationship with Asia Pulp & Paper over claims of deforestation of Indonesian rainforests. Asia Pulp & Paper supplies Woolworths' Select Brand tissue products.

External links

• Woolworths Limited