5 ways Woolworths needs to up its game

Woolworths’ investors will soon be meeting for their Annual General Meeting – but it might not be very pleasant. BusinessDay’s

Woolworths’ investors will soon be meeting for their Annual General Meeting – but it might not be very pleasant.

BusinessDay’s Catie Lowe – one of the media’s leading authorities on supermarket matters – reports that many shareholders are angry with the supermarket chain. Here are five major issues, as published to the Sydney Morning Herald, that are likely to come up:

1. Offensive marketing 

The infamous “fresh in our memories” ANZAC campaign is still fresh in our minds. More recently, Woolworths received a great deal of backlash for putting forward the joke that home gardeners were “dirt eating freaks”. Both campaigns alienated many shoppers, and it’s likely Woolworths will be taken to task for these missteps.

2. Raising prices

Since last year, Woolworths stores have been raising their prices to improve their margins. Meanwhile, other cost-cutting measures have led to fewer staff and less store maintenance. Many shoppers consequently took their trolleys elsewhere – and Coles, Aldi and Costco have reaped the benefits.

3. Losing Frequent Flyers

Getting Frequent Flyers points was one of the biggest selling points of the Woolworths Everyday Rewards program. But this relationship with Qantas ended last month, with the entire program being replaced with an allegedly more straightforward loyalty scheme.

Bafflingly, SMH reports that this new scheme will cost the company up to four times as much as the Frequent Flyer program.

4. Overly generous retirement packages

Woolworths chief executive Grant O’Brien will be leaving the company with an extremely generous superannuation payout: somewhere between $9 million and $10 million.

This is only because the Woolworths board allowed him to stay on while the company searched for a new chief executive. During this time, he was able to build up the annual leave and long service that allowed him to qualify for these enormous benefits.

5. Sinking money into Masters

Masters – the hardware store jointly owned by Woolworths and Lowe’s – is reported to be losing roughly $78,000 per week. Woolworths will likely be questioned over how $3.3 billion could be invested into the business – with more continuing to be spent – yet still fail to turn it into something profitable.

How do you feel about these decisions? Does Woolworths need to up its game? If so: how would you like to see the company improve?

  1. All I can say is that I am glad I don’t have shares in Woolworths. Incompetence is the word that springs to mind.

  2. Have changed from Woolworths to another supplier who have better customer service,easier shopping,and prices do not go up from week to week.Every dollar has to be made to work for retirees.I won’t be going back any time soon.

  3. I for one, am disgusted with the new rewards scheme. We luckily have a Coles, Aldi and Woolworths within 600 metres of home, so swapping won’t be difficult. I would think the best way to increase profit would be good customer service, but sadly Woolworths don’t see it that way. they are following the Qantas route, “any way as long as it’s my way.”

    • Yes I am also angry that we no longer earn Frequent flyer points at Woolworths, so will not be doing any shopping there. I do most of my shopping at Aldi, but usually buy my dog and cat food at Woolworths because my animals won’t eat the Aldi brand, I guess I will now be doing that shopping at Coles.

    • I preferred the Frequent Flyers Scheme. The orange tickets are mostly on products that I don’t usually purchase. They also need to stop deleting brand names in favour for their own brand which are usually from other countries. They should to the businesses they know – offload Masters. I am a very unhappy shareholder.

    • I am in happy about the loss of FF points. I have already had 2 return domestic flights using them. Plenty still left. I always shopped with my CC that was linked to FF doubling my points each shop. Always paid CC on time. Hope they wake up

    • I miss my Qantas reward points the most. Easy getting into a store BUT so much harder to get throu a checkout. I HATE the self serve check outs, much nicer to have a person doing it. The self service Isles are lossing the store a truck load of money every day, becauce people only put SOME of their things through NOT all of them

      • Robb Gee  

        I am more than annoyed with the loss of ff too. We were able to amass enough points to be able to get two, if not three return trips to nz each year to see our son and his family. The money rewards on Woolies cheap poisonous foreign rubbish does not make up for it. And the so called fresh food people is a bald faced lie. Woolies strawberries last a night before going mouldy. Aldi strawberries last a week in the same storage conditions (we have a parrot who lives like a king). Similar experience with other fruit and veg. Add to this the comparatively short date on the shoe leather that passes for meat in comparison to Aldi and you can probably guess where we shop more and more. And Woolies gets flipped a mental bird as we walk past its entrance to pick up a trolley to take to Aldi (you have to use a coin to get an Aldi trolley).

    • I like the self service checkouts and the reward card the way it is now..
      The self service is under scrutiny and I believe most people are honest …

  4. From my perspective, the 2 issues that make me shop elsewhere are high prices and lack of customer service. Unfortunately at least where I live , Woolworths has cut their staff to the bone. I recently wandered around the store looking for take away containers, the only staff member I could find besides the checkout chicks who had a mile of customers at their checkouts, was a packer who had no idea..I still have not found them, I gave up

  5. Woolworths have not made many customers happy by changing the rewards system. Unlike Coles where you get points on all purchases you only get points on selected products at Woolies. They will also upset loads of people if they close Big W a standby shop for a lot of lower income families and singles. They need to get rid of Masters – it is draining all profits and costing us more at the supermarket!

    • Masters is a white elephant for Woolworths. They charge way more than Bunnings and other big hardware stores for similar items.

    • and the man in the timber section here was so rude to me a few weeks ago just because I wasn’t sure what I wanted and needed some advice…left the store and went to Bunnings where they were extremely happy to help and even cut the board for me for free…..

    • I never shop Woolies and never will again. Coles has its problems but is way more customer-friendly. And its flybuys program is mint!

    • In my area Big W is non existent , as is Masters, BUT people tell me it is cheap, Bunnings seems to have cut down on staff , never find a sales person

  6. I have never liked Woolworths’, they do not listen to what the customer wants and discontinue stock that customers are buying, you can’t buy popular brands in there particularly meat as they do their own and the quality is quite frankly, crap. I much prefer to shop at Coles and can’t wait until we get Aldi’s in the country towns to give Coles a bit of a shake up as well. I love foodland but as a rural area we only have a small supermarket but their quality is far better than the other two and they use local suppliers where possible

  7. Woolworths has entirely lost the plot. Increased prices, lack of checkout staff, and the worst blunder of all, changing the Rewards card so that customers no longer receive frequent flyer points. The so called new rewards scheme does not work for me, so Coles etc look like getting my custom instead.

  8. Woolies are now so far off the planet i find it straining to even shop there for the bare minimum i now buy there.

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