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Supermarket Industry Report

This report addressed the supermarket industry through an analysis of Woolworths and examined its functioning. It highlighted the industry market outlook and its reliance on consumer centricity for market revenue, sustainability, and growth. The report assessed Woolworth's key strengths and weaknesses and suggested improvisation through an increase in presence through online retailing and store expansion.

Table of Contents

1. Executive Summary

2. Introduction

3. About Woolworths

Key Strengths

Competitive Advantage

4. Woolworths Criticism

5. Conclusion and Recommendation

6. Reference List

Introduction to Supermarket Industry

The supermarket offers a wide variety of food and grocery product through self-service retail market organized sections. The supermarket industry is growing with high penetration in grocery and household products with an estimated forecast of 12 percent annually (Bankwest 2019). The report highlights the supermarket industry with a focus on Woolworth's business aspects.

Supermarket store is highly driven by competition and pricing. Private brands have changed the industry landscape through store expansion. The increase in disposable income has shown an increase in expenditure and a focus on food purchases (Bankwest, 2019). The new entrants are competing heavily on price per growth, premium offerings, and specialized foodservice by supermarkets are key drivers for the expansion of supermarkets. The industry is governed by high capital investment, buyer purchase, and presence of the private label. Population and demographics increase repeat purchases for products ranging from high-end household to organic products. The use of advanced technology has created has helped in attracting new customer base and shift to the urban consumer. The growing quality and sustainable need have created an opportunity for the supermarket to engage the local community.

About Woolworths

Woolworths established in 1924 is a supermarket chain with over 3000 stores across Australia through the distribution centers and high customer-centric value (Woolworths, 2020). Woolworths has a major business component as Australian food The Company has invested in mobile and social media platforms for store outreach. It has a range of private level brands for household and macro organic products. Woolworths has built successful projects through investment in retail portfolio stream and has online service as Woolworths online for click and pay system (Woolworths, 2020).

Key Strengths

Strong shopping experience-Woolworths is creating a strong shopping experience which binds customer towards spending and with effective pricing. It addresses consumer buying behavior giving strong brands as a solution to purchase. Prioritizing customers with premium range products in alignment with taste by Woolworths creates purchase ecosystem centric to the availability of options. Fast-moving product behavior track through social media analytics creates opportunities for the multi-faced needs of the customer. The technological advantage used by Woolworths by the introduction of the green refrigerator to store perishable goods as an innovative way of promoting health expansion experience. The quick tap checkout facility adapted by stores adds to view and shop experience. The product offered is creating customer value and their lean model is targeted towards the new-age consumers (Woolworths, 2020).

Woolworths food business provides food for later options through a tie-up with local food manufacturers for creating a local experience in taste. Packaging has grown with investment in innovative packaging for communicating freshness and durability of the product (Buberis, 2020). The use of data input to tap business products has created a pathway for marketing plans like black Friday for bulk purchases. The consistency in the scale of business through product automation has increased demand-pull behavior. The unique upselling through home-grown product and new age appeal to mid-age segment in purchase experience behavior through online purchase increase customer stickiness.

Grocery and fruit segment

Figure 1: Grocery and fruit segment (Roy Morgan 2018)

Competitive Advantage

A strong relationship with suppliers-Woolworths revenue is accounted through online business through 1200 plus sellers using fresh produce as an alternative channel for their product sale on Woolworths (Smart Company, 2020). The loyalty and retention through their service have created customer preference with Woolworths. The food-producing the area requires an effective transportation network and store outlet presence. The everyday reward program and store expansion customization have helped in building supply chain integration and customer return. Woolworths commitment towards innovation through logistics partners is resulting in optimism master data through macro branding.

Stock management and store layout focus help in increasing product line display for profit margin per product at the store for Woolworths. Effective competition between supermarket chain benefits consumers through a focus on manufacturing and technology hubs. The distributor hub is strongly built on training and customer benefit matrix. The new market expansion is successful through the economic cycle built on transparent upstream. The strategy by Woolworths to locally source food and use of no plastic products initiative, the product available across creates sustainable development. Woolworths controls a major share of Australia s grocery segment.

Woolworths Criticism

It has been criticized to use its power as a market leader to influence labor and welfare standards over the use of fresh produce. The deregulation of price by Woolworths to decrease labor costs and expand the food processing chain has been hidden by them for profit-oriented strategies (Sustainable food trust, 2018). The price war through supermarkets adversely impacts convince store survival in the price-sensitive markets. The deep discounting and large scale operation of Woolworths declines the presence of convenience stores. The decision making through price war in the supply chain matrix will harm small scale businesses for operation in the food processing business. The labor workforce agreement system to pull high-working hours creating health issues due to the shortage of skilled labor through low wages is argued by the labor body against Woolworths (Pulker, 2019).

Conclusion and Recommendation on Woolworths 

From the above discussion and analysis, it can be concluded that Woolworths has a dominant share in the supermarket segment. The increasingly competitive market in Australia put importance to the increased focus on the customer buying behavior and increase outreach through store expansion and design. The online purchase experience of click and pay can be clubbed with private label Increase fleet size in online food delivery is a good step with aligning business activities with supplier value chain in central position shows strength with the dealer network. The convenience store and supermarket co-exist in the same setup to serve consumers across Australia.

Labor reforms following the industry system at quality standards will boost the workforce. The loyalty reward programs can be improved with adding labels for purchase to create superior value in consumer mind with added cost benefit Multi-option retailing in Australia will enhance brand equity for the company as it has a large network of stores. Product differentiation is low in the supermarket industry, branding and the use of technology can differentiate product sales revenue and customer loyalty at the store. Woolworth's sustainability drive such as green refrigerators can be aligned with government green drive for procurement.

Reference List for Woolworths 

Bankwest. 2019. Focus on supermarkets. [Online]. Available at< https://www.bankwest.com.au/content/dam/bankwest/documents/business/insights/focus-on-supermarkets-report-2019 > [Accessed on May 16, 2020]

Buberis, P. 2020. Australian franchising code of conduct: A critical analysis with current case law. Australia: Emerald group publishing

Pulker, C. E. Trapp, G.S.A. Scott, J. A. 2019. The nature and quality of the Australian supermarket's policies that can impact public health, nutrition, and evidence-based of their practical application: A cross-sectional study). Nutrients. [e-journal] 11(4), pp.853. Doi: https://doi.org/10.3390/nu11040853

Roy Morgan. 2018. Coles and Woolworths continue to gain a share in the fresh fruit and vegetable market. [Online].Available at http://www.roymorgan.com/findings/7597-coles-and-woolworths-continue-to-gain-share-in-fresh-fruit-and-vegetable-market-201805220618> [Accessed on May 16, 2020]

Smart company. 2020. This is what ‘in store for supermarkets in 2020 and beyond. [Online].Available at < https://www.smartcompany.com.au/industries/retail/supermarket-predictions-2020/ > [Accessed on May 16, 2020]

Sustainable food trust. 2018.A cautionary tale of two supermarkets. [Online].Available at< https://sustainablefoodtrust.org/articles/a-cautionary-tale-of-two-supermarkets/> [Accessed on May 16, 2020]

Woolworths Group.2020. About our business. [Online]. Available at < https: //www.woolworthsgroup.com.au/page/about-us. > [Accessed on May 16, 2020].

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