17 Woolworths stores to close in Australia with another 15 under threat

17 Woolworths stores to close in Australia with another 15 under threat
17 Woolworths stores to close in Australia with another 15 under threat

Woolworths plans to shut 30 stores, including 17 supermarkets in Australia and six in New Zealand.

It was announced as part of a Woolworths restructuring into a new operating model that sees 500 fewer jobs, and the slowing of its store roll-out.

It involves closing underperforming outlets by the new chief executive Brad Banducci, who started in the role in February.

These 17 stores are all expected to shut before the end of the current financial year. They have not been identified from their 960 store tally, but have an average six years remaining on their lease. Under community pressure Woolworths reportedly advised that it Bundaberg region stores will not be closing.   

Woolworths also said that it has identified five Big W stores that are likely to close in the next three years based on current trading performance.

A further 34 stores across its broad portfolio are rated as underperforming.

Woolworths said there was "currently significant uncertainty around whether we would renew the lease at the end of the lease term".

These include 15 supermarkets in Australia and five metro stores.

There are also 20 development sites were the build will be delayed or not proceeded with.

He said sales per square metre and 'Return On Funds Employed' would be introduced as long-term executive performance indicators of how stores were performing under a new operating model.

Banducci had been managing director of Woolworths Food Group with 25 years in retail, including 15 years consulting to some of the world’s leading retailers, as well as private equity experience in retail.

He had had five years with Woolworths, including his role in leading the growth of Woolworths Liquor Group. During this time he was instrumental in the development of Dan Murphy’s.

The announcement comes as the German supermarket Aldi is estimated to now hold a double-digit percentage share of the Australian grocery sector.

Australian Competition and Consumer Commission chairman Rod Sims believes Aldi to now have “close to north of 10 percent of the market now”, according to Fairfax Media.

Sims believes this has knocked the dynamic duo of Coles and Woolworths down to a combined 70% share, whereas the two held closer to a 75% share a few years ago.

Aldi has over 400 stores across the country, employing over 9000 staff with sales in 2013 at just under $5 billion, up $2.86 billion from 2010.

Woolworths will open 45 stores over the next few years.

It typically closes around eight stores each year.

 

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Woolworths Commercial Market

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