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Woolworths enters the supermarket fray

Woolworths enters the supermarket fray


Mar 28th 2012, 14:09

Woolworths have recognised a need to service its growing customer base by providing a more comprehensive shopping experience. Until now most shoppers have used its stores as an auxiliary format to purchase only certain items on their shopping list or as a "top up" type daily purchase of convenience items. The group has performed well on this basis but have found themselves vulnerable when trading conditions have tightened. Already we have seen pricing strategies change with more products becoming falling into line with competitive supermarkets, a premium shopping experience without the associated cost is certainly a comfortable proposition for consumers. 

With pricing being addressed on an ongoing basis, availability of a wider range of products becomes the pre-eminent issue. Again, the management team are on the case. In certain stores customers will notice the availability of a wider range of branded products available across a wider range of product categories, this trend is set to continue but the focus will remain heavily weighted towards private label.

The new supermarket format will be designed to convert Woolworths customers from ‘basket shoppers’ to ‘Trolley shoppers’, increasing the groups share of monthly grocery spend from its existing customer base. 

There will be much more on offer for shoppers. Apart from the availability of more products in more categories there will also be bigger pack sizes in most product lines and far more emphasis will be placed on the health and beauty, home care and long life food categories. In addition to that shoppers can expect to see more liquor lines instore. More than 7500 SKU’s will be available in the new store and food categories alone will see an increase of 1000 SKU’s.

To house all of this you need a big store and that is certainly what is on offer here. The new store in Bryanston is significantly bigger than any Woolworths food store we have seen before, standing at a fraction under 2500sqm it is certainly designed to compete head on with the offerings of Checkers and Pick n Pay.

Woolworths move into large format supermarket shopping seems logical and well thought out, while there may be some learning’s to come from the first big store opening, I have no doubt the group will be actively seeking floor space all around the country.  


Management at Capacity Holdings

Craig Ballantyne is Managing Director of Capacity Holdings, based in Cape Town. Craig has worked as a retail analyst since 2001.

Having analysed South African and African markets for nine years and set up a trade communication platform for the FMCG Industry, Craig now focuses on business development in the Capacity Holdings Group. He is a regul...