According to one of Australia’s most successful freelance writers, Chris Sheedy, and ABC News business reporter Emily Stewart, there are a number of factors behind Woolworths’ $927 million after-tax loss, and its subsequent cost-cutting plan.
The company seems to have made some poor decisions over the past few years, especially when it decided to venture into the home improvement retail business and challenge rival chain Wesfarmers, owner of Coles and Bunnings. The launch of Woolworths' own brand, Masters, didn’t turn out as planned. As Bunnings had already secured most of the best sites, Masters had to settle down for less. Also, as a result of the US joint venture partnership, the Australian offering was constantly out of season. Lastly, unlike Wesfarmers did with Bunnings, Woolworths didn’t run Masters as an independent unit. While the arrival of Aldi dealt a severe blow to the Woolworths/Coles duopoly, Coles—probably because of its independent position—hasn’t suffered as much as its rival.
IS WOOLWORTHS IN DIRE STRAITS?
