Woolworths Group (Australia)
Woolworths Group Limited is an Australian multinational retail and finance company, primarily known for the operation of its retail chain Woolworths Supermarkets across Australia, Woolworths in New Zealand and its discount department store Big W. Headquartered in Bella Vista, Sydney, it is the largest company in Australia by revenue and number of employees, and the second-largest in New Zealand. The company is unrelated to the former F. W. Woolworth Company brand of stores which originated in the United States.
Founded in Sydney in 1924 as variety retailer Woolworths Limited, the company entered the New Zealand market in 1929 and has traded in every Australian state and territory since 1960. Woolworths experienced steady growth throughout the 20th century and began to diversify its business, closing the last of its variety stores in the 1980s to focus on its portfolio of other retail brands. Since 2012, Woolworths has undergone significant consolidation, divesting its shopping centre, electronics retailing, home improvement, fuel retailing, liquor retailing and hospitality businesses to concentrate on supermarket retail.
Woolworths currently owns Woolworths Supermarkets, customer loyalty program Everyday Rewards and discount department store Big W in Australia and the Woolworths NZ, SuperValue and FreshChoice supermarkets in New Zealand.
History
Founding and early growth (1924–1957)
Woolworths opened its first store, the Woolworths Stupendous Bargain Basement, in the old Imperial Arcade Pitt Street, Sydney, where Westfield Sydney now stands, on 5 December 1924. Woolworths Ltd's nominal capital was £185,000, and although 85,000 shares were offered to the public, only 81,707 shares were subscribed for by 619 people, including the five founders – Percy Christmas, Stanley Chatterton, Cecil Scott Waine, George Creed and Ernest Williams. One of the founding investors was Preston Lanchester Gowing, the then chairman of the department store chain Gowings.The name on the draft prospectus drawn up by Cecil Scott Waine was "Walworth's Bazaar" – a play on the name of F.W. Woolworth, the owner of the Woolworth's chain in the United States and United Kingdom. According to Ernest Robert Williams, Percy Christmas dared him to register the name Woolworths instead, which he succeeded in doing after finding out the name was available for use in New South Wales.
The new Woolworths store was the first variety store in the world to use cash registers that print receipts for customers.
During the late 1920s the company grew, with a second store in Sydney and stores in Brisbane, Perth and Wellington in New Zealand. The company grew further in the 1930s, despite the depression, until by the end of 1933 it had 23 stores. In 1933 the first store in Melbourne was opened and on 1 April 1936 the company bought eight stores from Edments Ltd and opened its first store in Adelaide. Following the opening of the Hobart store in 1940, Woolworths had a store in every state in Australia.
World War II slowed the growth of the company, with the Australian and United States militaries commandeering Woolworths' warehouses in Sydney for storage. After the war expansion was once again rapid and in 1955 Woolworths opened its 200th store, in the Civic Centre in Canberra.
Diversification, expansion and takeover (1957–1993)
In 1957, Woolworths began to diversify from variety retailing when it opened its first food store at Dee Why, Sydney. The company further diversified in 1960, opening it first purpose-built supermarket at Warrawong, purchasing the Rockmans chain of women's clothing stores and commencing selling liquor at some outlets.In the 1960s, the company opened a department store to compete against the likes of David Jones and Myer, under the brand Big W which was short lived, but the name was resurrected in the 70s as a discount department store as we know it today. Woolworths also began converting its variety stores to supermarkets and removing many of its variety products from sale. In 1979, Woolworths sold its New Zealand operations to LD Nathan & Co.
In 1981, Woolworths purchased 60 percent of consumer electronics retailer Dick Smith, acquiring the rest of the company in 1983 for $25 million.
In 1985, the acquisition of 126 Safeway supermarkets in Victoria, New South Wales and Queensland made Woolworths the largest food retailer in Australia. As part of the purchase of Safeway's Australian stores, Safeway Inc acquired a 20 percent interest in Woolworths Limited. In 1989, the last of the Woolworths Variety stores was closed and Woolworths "Family Centres" were split into separate Big W discount stores and Woolworths branded supermarket stores.
Woolworths Limited was acquired by Industrial Equity Limited in 1989, a consortium of Adelaide Steamship Company, David Jones and Tooth & Co.
IPO and further diversification and expansion (1993–2012)
In 1993, Industrial Equity floated Woolworths on Australian Securities Exchange in what was then the biggest initial public share offering in Australia's history.In 1996, Woolworths entered the petrol retailing market, initially with wholly owned Plus Petrol outlets located in shopping centre parking lots. Woolworths expanded its liquor retailing portfolio with the acquisition of the Dan Murphy's liquor barn stores in 1998. In 1999, Woolworths began a joint venture with the Commonwealth Bank called Woolworths Ezy Banking, which was scaled back by 2006.
In 2001, Woolworths expanded its consumer electronics retailing interests with the purchase of the Tandy chain in Australia from InterTan. Also in 2001, Woolworths established the smaller format liquor retailing chain BWS to complement its big-box liquor retailer Dan Murphys.
In 2003, Woolworths entered into an agreement with Caltex to jointly supply food and groceries to Woolworths owned petrol stations and selected Caltex sites near Woolworths supermarkets, with petrol stations covered by the joint venture co-branded as Caltex Woolworths.
With Queensland licensing laws dictating that liquor retail outlets must be operated by a hotelier, Woolworths moved into the hotel industry in 2004 by acquiring 75 percent of the Australian Leisure and Hospitality Group in a joint venture with business partner Bruce Mathieson. In 2005, Woolworths expanded its portfolio to 250 hotels by acquiring the Taverner Hotel Group. Statistics provided during the acquisition of the Taverner group showed that over one-third of sales were made up of gaming/pokie machine takings with the total number of pokie machines owned by ALH after its acquisitions being 10,722.
In 2005, Woolworths re-entered the New Zealand market by purchasing the retailer Progressive Enterprises, owner of supermarket brands including Countdown, in a deal that gave the company a 45 percent share of the New Zealand grocery sector. In the same deal, the company also acquired 22 Action supermarket stores in Western Australia, bringing the total number of Woolworths supermarkets in Australia to near 750. In 2006, Woolworths announced that it had taken a 10 percent strategic stake in The Warehouse Group in New Zealand and announced a joint venture with the Tata Group to introduce the Dick Smiths Electronics store format in India.
In August 2007, Woolworths announced that it was planning to launch a general purpose credit card in 2008. It is expected to offer credit cardholders reward vouchers redeemable through its store network. HSBC was subsequently named as its credit card partner. Woolworths subsequently announced that the Woolworths Everyday Money MasterCard would be launched on 26 August 2008 and allows customers to earn shopping cards redeemable at Woolworths group retailers. It was suggested Woolworths could earn approximately $20m from credit cards in three years and that it was targeting 100,000 to 150,000 cardholders in the first year.
In April 2008, Woolworths launched Thomas Dux, a gourmet grocer and deli. After the company purchased the Macro Wholefoods organic grocery chain in May 2009, it converted eight stores to Thomas Dux stores.
In February 2011, Woolworths announced it would acquire the Cellarmasters liquor business for $340 million.
During 2009, Woolworths and American retailer Lowe's purchased Danks Ltd owners of the Home Timber and Hardware brand and then entered into a joint venture to launch a new hardware brand named Masters Home Improvement. The first of these stores were opened to the public in Braybrook, Melbourne, on 1 September 2011.
Consolidation (2012–2019)
In 2012, Woolworths placed 69 shopping centres it owned into a real estate investment trust known as Shopping Centres Australasia Property Group, which listed as a separate entity on the ASX on 26 November 2012. Most of the locations contain a Woolworths owned store as an anchor tenant, with the trust deriving most of its rental income from Woolworths Limited stores. Woolworths announced it was exiting the consumer electronics retailing sector in September 2012, completing the sale of its Indian electronics wholesale business to Infiniti Retail for A35 million and the sale of the Dick Smith Electronics chain to Anchorage Capital Partners for $20 million. In May 2013, Woolworths acquired a 50 percent stake in analytics firm Quantium for $20 million. In December 2014, Woolworths acquired Summergate, an alcoholic drinks distributor in China for $27 million.In 2015, Woolworths' home improvement chain Masters posted a loss of and on 18 January 2016 Woolworths announced that it intended to "either sell or wind up" Masters hardware and Home Timber and Hardware. Chairman Gordon Cairns said that it would take years to become profitable and that the ongoing losses could not be sustained. On 24 August 2016, it was announced that all Masters stores would close on or before 11 December 2016. It was also announced that Woolworths would sell the Home Timber and Hardware brand to Metcash.
In June 2015, CEO Grant O'Brien retired and Woolworths went without a CEO until the appointment of Brad Banducci in February 2016. On 25 August 2016, the company announced a loss of $1.235 billion for the 2016 financial year, the biggest loss in the more than 20 years since it has been publicly listed on the Australian Securities Exchange, mainly due to more than $2 billion in write-downs of the failed Masters Home Improvement business and losses in the Big W business.
In April 2016, Woolworths Liquor Group was renamed Endeavour Drinks Group. Woolworths closed all its Thomas Dux stores in 2017; at its peak the brand had 11 stores.
In December 2016, Woolworths announced it would sell its Caltex Woolworths branded petrol stations to British multinational oil and gas company BP for $1.75 billion. BP pulled out of the deal in July 2018, saying that sale conditions imposed by the Australian Competition & Consumer Commission would make the acquisition commercially unviable. On 9 November 2018, Woolworths announced it would instead sell its petrol stations to the EG Group for $1.72 billion, with a 15-year agreement that EG Australia would maintain the Woolworths fuel discount program and enable Woolworths Rewards points to continue to be earned on fuel transactions in its stores. The acquisition was completed on 1 April 2019.