Woolworths finds success at Naturally Good Expo

Woolworths found success at the Naturally Good Expo a the ICC in Sydney on May 31, with the ‘Meet the Buyer’ event hosted by the Food & Agribusiness Growth Centre (trading as FIAL). The event consisted of an industry briefing on Woolworths’ health food strategy and on how to become a supplier to Woolworths.

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Woolworths start work on $184m DC

Woolworths Group’s supply chain arm – Primary Connect – has commenced building works on its new Heathwood Distribution Centre (DC) in southeast Queensland. The 42,000 sqm temperature controlled facility – equivalent to more than three times the size of the Suncorp Stadium playing field – will enable fresher, faster and more efficient deliveries of around 4,000 frozen and chilled products to more than 260 stores across Queensland and northern New South Wales.
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US FDA briefs Asia Pacific on Smarter Food Safety

At a recent global briefing, Frank Yiannas, the US Food and Drug Administration’s deputy commissioner for Food Policy and Response, addressed more than 200 attendees from 33 countries on the importance of traceability and transparency in food systems.

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Woolworths to remove product limits across South Australia

Woolworths will remove product limits across all categories in South Australia from tomorrow (Saturday 21 November, 2020) as demand moderates across the state.
Woolworths Supermarkets South Australia General Manager, Karl Weber said: “We’ve seen demand moderate across South Australia and we thank our customers for that.
“Our team members and supplier partners will continue working around the clock to restock our stores, so we ask our South Australian customers to continue buying only what they need.
“We’ll continue to monitor the situation closely and reinstate product limits if we see further demand spikes.”
The changes to trading hours announced recently will remain in place until Monday 30 November 2020. The hours are as follows:

  • Saturday 21 November: 7am to 8pm
  • Sunday 22 November: 9am to 8pm
  • Monday-Friday: 7am to 9pm

Trading hours will return to normal from Monday 30 November 2020 onwards.
Mr Weber concluded: “We thank our customers for their patience and understanding as we work through this unsettling time together.”

Woolworths appoint chief risk officer

To reflect the increasing importance of risk governance and management across Woolworths Group, a chief risk officer role has been created reporting to the Group CEO. David Walker, currently Managing Director, BIG W has been appointed to this role. Walker will have leadership of Woolworths Group’s critical Line Two risk and compliance functions within its Three Lines of accountability framework. This includes primary responsibility for the Group’s risk and compliance strategy, the evolution of risk management frameworks and oversight of risk across the Group.
“There are an ever increasing number of influences changing the way that we work and the role that we play in the communities in which we operate, Woolworths Group CEO,” Brad Banducci said. “Whilst this creates many new exciting opportunities for us, it also increases the importance of good risk management. To best reflect these needs, we have created a new Chief Risk Officer role within the Woolworths Group senior leadership team.
“I am pleased that someone of David’s calibre will be stepping into this new role. For the last four years, David and his leadership team have led the successful turnaround of BIG W by building a strong purpose-led culture that has culminated in the business’s return to profitability this year.
“David’s Customer 1st Team 1st mindset, his knowledge and experience leading our various businesses and operations and his background in finance and audit give him the ideal skills to step into this important new role for the Group.”
To replace Walker, Pejman Okhovat will join Woolworths Group as managing director, BIG W to continue the BIG W transformation journey together with the BIG W leadership team. Pejman joins from New Zealand where he was chief operating officer, The Warehouse Group with an extensive background in non-food retail both in New Zealand and the UK.
Okhovat will join BIG W in Q4 F21 and report to Claire Peters in her new Group role as managing director, B2B and Everyday Needs. In the interim, Teresa Rendo, who is currently general manager of Commercial at BIG W and has played a fundamental role in BIG W’s turnaround journey, will step in as acting managing director of BIG W.

Woolworths shakes up leadership team

Claire Peters, currently managing director of Woolworths Supermarkets, will take up a new position as managing director of B2B and Everyday Needs. In this role, Peters will take leadership of Woolworths Group’s portfolio businesses including BIG W, Woolworths International, Wholesale and Property. She will also take stewardship of the Group’s new partnership with PFD Food Services and join the Investment Committee of venture capital arm, W23.

“Claire has successfully led the ongoing transformation of Woolworths Supermarkets over the last three years,” said Woolworths Group CEO Brad Banducci.

“During her leadership we have seen significant increases in customer and brand metrics, implemented a new store operating model to better serve changing customer needs, implemented the foundation phases of Fresh Made Easy, evolved our store formats and materially improved supplier engagement. In more recent times, Claire has played a critical role in helping the Group navigate through COVID.

“In her new role, Claire will combine her detailed knowledge of the food and non-food retail environment to lead our important growth adjacencies. These areas of our business are critical to the next phase of our journey and we look forward to the opportunities that Claire and her team will unlock in her new leadership position.”

After two years as managing director of Woolworths New Zealand, Natalie Davis will return to Australia from October and assume the role of managing director of Woolworths Supermarkets.

Banducci said: “In the past two years, Natalie has led the growth of Woolworths New Zealand, worked to deliver improvements across customer, brand and reputation metrics and also rapidly grown Countdown X, especially in eCommerce. Natalie will work in partnership with the Food Leadership team to continue to transform our Australian Food Business.”

An announcement on the appointment of the new managing director of Woolworths New Zealand will be made in the coming weeks. In the interim, Sally Copland, general manager digital for Woolworths New Zealand will step into the role of acting managing director.

Managing director of Group Portfolio, Colin Storrie will take up a new role as managing director of New Business and Partnerships.

“Colin is, in many ways, the unsung hero of our senior leadership team, generally working behind the scenes on many strategic initiatives that have helped us build the business that we have today,” said Banducci.

Woolworths joins forces with health insurer

With Australians eating at home more and health top of mind in the pandemic, Woolworths Everyday Rewards and health fund Bupa are teaming up to reward customers for choosing fresh fruit and vegetables.

It comes as an Ipsos survey of 2,000 participants conducted for Woolworths in June found that eating more fresh fruit and vegetables was the number one food priority for Australians over the next year.

The partnership, which launched today, will give Bupa Health Insurance members access to exclusive bonus point offers when they link their Woolworths Everyday Rewards account to Bupa.

To help encourage healthier habits, Bupa customers can collect three points for every dollar spent on fresh fruit and vegetables and Macro Wholefood Market products for the first 60 days after linking their account. This recognises customers’ investment in their health and will help them enjoy discounts on future shops sooner or bank more points for Christmas.

Emily Amos, managing director of health insurance at Bupa said the partnership comes at a time where health – and household budgets – have never been more important.

“By giving members the chance to collect more points, they can earn savings towards a future shop faster. This initiative will reward our members for healthy choices and give them added value from their health insurance policy,” Amos said.

“Woolworths shares our passion for promoting healthy lifestyles and we hope as many members as possible take advantage of this offer by enjoying deliciously fresh and nutritious food options.”

In the months ahead eligible customers will also enjoy a Woolworths-first, with 20 times bonus points on cleaning products – our highest bonus points offer to date. Further partnership benefits later this year will include 10 times bonus points on a total shop plus special offers across the Woolworth Group.

Hannah Ross, Woolworths director of Everyday Rewards said the partnership is an important evolution of the supermarket’s broader strategy to support its customers’ health and wellbeing.

“We know our customers want to make healthier eating choices, and we’ve been working hard to make it easier and more affordable to do so,” Ms Ross said.

“This focus on wellbeing has only accelerated in the pandemic, with our customers telling us their number one food priority over the next 12 months is eating more fresh fruit and veggies.3

“We’re delighted to be teaming up with Bupa to support this positive intent with extra rewards on purchase that can help kickstart new habits.”

Woolworths takes majority stake in PFD Food Services

Woolworths has extend edits strategic partnership with PFD Food Services by acquiring a 65 per cent equity interest in the business. Woolworths Group will also acquire 100 per cent of PFD’s freehold properties, which primarily comprise 26 distribution centres.

“We are excited by the opportunity to invest alongside the Smith family in PFD Food Services. It is a business we have long admired and we have a shared vision for continued innovation, customer focus and investment in the food sector. We look forward to delivering even better experiences together for our customers as we continue to respond to their changing needs in a post COVID world,” said Woolworths Group CEO, Brad Banducci.

“This investment is a logical adjacency for Woolworths Group and further supports the evolution of the Group into a Food and Everyday Needs Ecosystem. It will build on our existing partnership with PFD, the number two player in the large and fragmented out-of-home foodservice and non-retail business-to-business markets.

“The investment will also unlock synergies for both businesses across the combined network and fleet. We will help to support PFD’s growth through access to our logistics, digital and data analytics and operational capabilities. For Woolworths Group, it will enhance store range localisation and provide fleet synergies through better route and capacity optimisation across our combined network.”

PFD will operate independently under CEO Kerry Smith. A separate board and governance structure will be implemented, with Rick Smith, the founder of PFD, continuing to be involved.

“We are pleased to deepen our existing strategic partnership with Woolworths Group for the longer-term via their investment in our business. As a family owned and operated business which prides itself on its customer and supplier relationships, it is important that PFD operates as a standalone business, run by the existing team. In Woolworths Group, we are confident we have found a partner with shared experience and expertise, but also whose operations and vision for the future complement our own,” said PFD Food Services CEO, Kerry Smith.

Transaction details

Woolworths Group will initially invest $302 million in PFD to acquire a 65 per cent equity interest. The transaction implies a multiple of 11x pre-AASB 16 EBITDA  of $57 million assuming net debt of $157 million1. Woolworths Group will also acquire PFD’s freehold distribution centre properties for $249 million which will be leased back to PFD.
Like many other businesses, PFD’s current earnings have been impacted by COVID-19. Despite this, the investment is expected to be earnings per share accretive in the first full year of ownership and deliver a strong return on investment to Woolworths Group.The transaction is subject to an earn-out at the end of F22 and F23 if earnings growth materially exceeds the business plan. Put and call options have also been granted to the Smith family and Woolworths Group respectively over the Smith family’s remaining 35% shareholding, exercisable from the third anniversary of completion.

The transaction is subject to ACCC approval and the satisfaction of customary closing conditions with completion expected by the end of calendar year 2020. The purchase price will be funded from existing cash reserves and available debt facilities and is not expected to affect the Woolworths Group’s existing credit metrics.