Woolies to open more ‘dark’ stores

woolworthsWoolworths will be ramping up online grocery shopping by opening up to five new ‘dark’ stores in order to compete with Amazon.

The supermarket giant’s chairman Gordon Cairns told investors at their AGM yesterday that it was critical the retailer would improve online shopping to compete with Amazon.

“We want to be obsessive about our customers, their needs and how we serve them better,” said Cairns. “If we do not, we will lose out to those who do, like Amazon.”

Cairns said that they should have up to five dedicated dark stores by the end of 2018 in order to “deliver to customers and improve our performance.” He also warned suppliers off selling to Amazon, saying it would be “cutting their own throat,” as other retailers could drop their products.

Dark stores are closed to the public and are laid out like a supermarket to allow staff members to pack orders and ship directly from the store. Woolworths already has a dark store in Mascot, Sydney, which has been trialling operations since 2014.

Competitor Coles has two dark stores, one in Richmond Victoria and one in Alexandria. A spokesperson from Coles said they have seen online record double-digit sales growth in the past financial year.

“We restored our price competitiveness with Coles, and we invested in team hours in the stores,” said Cairns. “We improved the prices competitiveness and quality of our ‘own brands’ to compete more effectively with Aldi.”

Pokie debate

The poker machine debate also dominated discussion at the AGM. Cairns was asked if he will consider following Coles, which owns 89 hotels, in seeking to introduce $1 maximum bets on pokies.

“There is no empirical evidence that it will improve the incidences of problem gambling,” Cairns said.

He said Woolworths was the first national hotel operator to adopt voluntary pre-commitment, a system that allows gamblers to nominate a maximum spend or time limit on a poker machine.

“We are the most responsible operator of gaming machines in Australia and we will have that validated by a recognised world authority from Canada that is coming down to audit us,” Cairns said.

Workers win pay rise

In time with the AGM, more than 1500 Woolworths warehouse workers have won substantial pay increases after threatening to go on strike in the lead up to Christmas.

The workers in Victoria and NSW have won a four per cent annual pay rise, double the national average, and improved redundancy payouts. In a parallel deal, Woolworths has also agreed to ensure that farm workers in its fresh food supply have their legal entitlements protected, the union said.


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