As Wesfarmers and Woolworths continue to battle for leadership across different retail categories in Australia, Julia Illera from Euromonitor International assesses how successful they’ve been in their attempts to gain market share – as well as the hearts and minds of Australian consumers.
“Although competition has been almost head-to-head in most of retail categories in recent years, including grocery retailing (supermarket, forecourt retailing, food/drink/tobacco specialist) and mass merchandisers (discount department stores), Wesfarmers has managed to step ahead in the competition thanks to its position in mass merchandisers and home improvement and gardening stores with its Kmart, Target and Bunnings brands,” said Ms Illera.
“Furthermore,” she noted, “Wesfarmers also has a strong presence in stationers/office supply stores with the Officeworks brand, a category in which Woolworths Ltd does not have a presence”
“Despite Woolworths’ poor FY15 results, out of these two competitors Woolworths seems to have a better strategy for the long term, with its online channel better prioritised and experiencing stronger growth. For FY14, the group reported a 50% increase in its online sales, exceeding $AUD1.2 billion. In FY15, it reported a 15.6% increase in online sales to $AUD1.42 billion.”
“Up until now the battle has been limited to the physical world, but it seems we will soon see the fight move increasingly online,” Illera concluded.