Woolworths Group is a major Australian company with extensive retail interest throughout Australia and New Zealand. It is the second largest company in Australia by revenue, after Perth-based retail-focused conglomerate Wesfarmers, and the second largest in New Zealand. In addition, Woolworths Group is the largest takeaway liquor retailer in Australia, the largest hotel and gaming poker machine operator in Australia, and was the 19th largest retailer in the world in 2008.
Despite similar names, Woolworths Group has no affiliation with the F.W. Woolworth Company in the United States, the now-defunct Woolworths Group in the UK or the South African chain of retail stores, Woolworths Holdings Limited. Its main operations include supermarkets (under the Woolworths brand in Australia and the Countdown brand in New Zealand), liquor retailing (as BWS and Dan Murphy's in Australia), hotels and pubs under the Australian Leisure and Hospitality Group (ALH Group) umbrella, and discount department stores under the Big W name in Australia.
The company announced a loss of $1.235 billion for the 2016 financial year on 25 August 2016, the biggest in more than 20 years since it has been publicly listed on the ASX, mainly due to more than $2 billion in write-downs of the failed Masters business and losses in the Big W business.
Woolworths opened its first store, the Woolworths Stupendous Bargain Basement, in the old Imperial Arcade Pitt Street, Sydney, where Westfield Sydney now stands, on 5 December 1924. Its nominal capital was just £185,000 and although 85,000 shares were offered to the public, only 81,707 shares were subscribed for by 619 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). Moreover, 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, nor the Woolworths Group of UK. It also has no connection to the Woolworths Group in South Africa.
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 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 1 April 1936 the company bought eight stores from Edments Ltd and opened its first store in Adelaide. The original Imperial Arcade store was moved to larger premises in Her Majesty's Arcade, a short distance along Pitt Street near the Market Street corner.
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, and the Dick Smith Electronics chain in 2012.
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, which was in turn one-third owned by The Adelaide Steamship Company, David Jones Limited and Tooth & Co. It 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 2006, Woolworths rolled out new Retalix point of sale systems running on IBM POS hardware with LCD touchscreens throughout all its stores. These self-serve checkouts were initially trialled in Carlingford, NSW.
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.
During 2009, Woolworths Ltd. and Lowes purchased Danks Ltd. owners of the Home Timber and Hardware brand. They entered joint venture with Lowes, one of North America's largest home improvement chains, to launch a new hardware brand named Masters Home Improvement. The first of these stores was opened to the public in Braybrook, Melbourne, Victoria, on 1 September 2011. Aiming to open 150 stores within the next five years, as of June 2014 there were 49 stores operational with more being constructed and/or planned. The business was not profitable, and in 2015 Masters lost A$227.4 million. On 18 January 2016 Woolworths announced that it intended to "either sell or wind up" Masters hardware and Home Timber and Hardware. Chairman Gordon Cairns said that it would take years to become profitable and that the ongoing losses could not be sustained. On 24 August 2016 it was announced that all Masters stores would close on or before 11 December 2016. It was also announced that Woolworths would sell the Home Timber and Hardware brand to Metcash.
The Australian Leisure & Hospitality Group, 75% owned by Woolworths, operates over 12,650 poker machines across Australia, making it the largest operator of pokies in Australia. The poker machines are estimated to raise $1.2 billion in net revenue each year. Michael Luscombe in 2010 told shareholders he has no intention of leaving the poker machines business, and the company has lobbied against mandatory pre-commitment technology. When mandatory pre-commitment was implemented, the Woolworths owned hotels created a loyalty card scheme to offer incentives to frequent gamblers, giving them free food and drink.
In 2012, Woolworths Limited placed 69 shopping centres it owned into a real estate investment trust known as Shopping Centres Australasia Property Group (or SCA Property Group), which listed as a separate entity on the ASX on 26 November 2012. Most of the locations contain a Woolworths Limited owned store as an anchor tenant. The trust derives most of its rental income from Woolworths Limited stores.
Commerce Commission lawyer Stephen Kos told the court the market essentially consisted of a single acknowledged price leader and other price followers. "The effect of the merger would be a creation of a pure duopoly." ... Now Woolworths and Foodstuffs had roughly equal market shares, Kos said.
This is a very personal question but it is probably going to be the last chance we get to speak to with you on Business Sunday. You are now the biggest pokies operator, the biggest pub owner, the biggest liquor retailer in Australia.
Woolworths Limited (Woolworths) today announced that it intends to commence an orderly process to exit its home improvement businesses, Masters Home Improvement and Home Timber & Hardware, ...
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