Woolworths look to Aldi after sales plummet

Embed from Getty Images

BUDGET buyers will be targeted as Woolworths looks to take action against a recent decline in sales.

Coles’ like-for-like sales are almost six times better than Woolworths, creating concern for stakeholders and an outlook of Woolworths being ‘too expensive’.

Woolworths managing director, Brad Banducci told The Daily Telegraph that they “need to do a better job of providing a similar set products (to Coles and Aldi).”

Reports show Coles also more than doubled Woolworths rate of food and liquor sales, recording a rise of 5.4% on last year.

An investigation into sales prices showed that every day items, such as bread, were up to five times more expensive at Woolworths than Aldi.

This gap in pricing has had an impact on local business, with Chambers Coffee Merchants, Sydney, refusing to buy milk from Woolworths, even in desperate situations, as “it’s too expensive”.

It is this type of feedback that has resulted in Woolworths conceding its stores are “not good enough” and action needs to be taken to establish itself in corporate supremacy once again.

Consequently, Woolworths have reduced their forecast for full-year profit growth to 1.8%, and plan to retrench 400 non-customer jobs adding to the 400 jobs cut recently, surprising investors.

More consistent pricing, retrenchment and addressing their self-reproached Rewards Card puts Woolworths in a position of hijacking Aldi’s market.

Woolworths Bella Vista Sensory Panellist, Zac Anania, said Woolworths are always taking measures to improve quality and shorten the gap between what people see as fair and unfair pricing.

“Woolworths provide different qualities of food that are priced accordingly,” he said.

“If the prices are dropped then people will be more likely to buy the premium products…therefore it would increase their sales or profits.”

Anania is part of group that tastes and tests products to ensure top quality at the right price.

“(Woolworths) are constantly trialling and altering foods in order to improve the quality.

“We aren’t supposed to know the prices or brand because it can influence our thoughts on the food,” he said.

These measures are obviously not enough as Coles and Aldi are held in considerably higher regard the Woolworths in the current market.

This can be attributed to Woolworths branching into an ‘upper-class’ market, isolating budget buying civilians.

Despite this, Woolworths’ customers still remain loyal.

“I don’t shop at Aldi. Stuff is cheaper but you have to get to know the brands,” said local Sydney customer Kathy Larkin.

“Most people are loyal to a shopping centre because of where they work or live.”

Opposing misconceptions by Woolworths’ management, Larkin said her Rewards Card contributed to her persistent loyalty.

Banducci concludes that these restorational actions will result in Woolworths “neutralising” and “containing competitors.”

“We will not be beaten on price,” he said.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s