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Business Practices Of Woolworths And Wesfarmers

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Discuss about the Business Practices of Woolworths and Wesfarmers.


The Australian retail industry is dominated by big game players. There is no chance of a small retail brand to ever grow and prosper in the retail market of Australia. The big brands dominate the entire market with their ‘House products', the products labeled under their brand and exclusively available in their stores only (Gas price regulation for a retail market administrator 2004). The Australian retail market constitutes liquor sales, tobacco, and grocery retail. The big players dominate 60 per cent of the Retail trade, 50 percent of the tobacco trade and 80 per cent of Liquor and vintage alcohol sales. The promotion of their in-house products can be devastating for generic brands. The supermarket brands downgrade and run campaigns against generic brands. The supermarket brands have a huge impact on the flow of liquid cash from the hands of the wealthy to the poor segments. The supermarket brands have also been associated with the tag of highest growing grocery prices in the entire world.

Our brands of Selection for this study

The first brand that we have selected for this study and discussion is Woolworths and Wesfarmers. The brand has been dominating the retail trade since its inception. The Coles supermarket brand is owned by Woolworths and Wesfarmers. The Coles has the largest number of grocery retail outlets in entire Australia (Sinapuelas and Robinson 2008). This brand is a common name that we come across each and every day, but we do not pause to think and ponder about the downfall of the economy that this company and its counterparts have brought to our nation. This segment of the industry is dominated by the cash rich and big names who have been major players since their inception. The companies like Coles offer high degrees of resistance to small details and their products by motivating the customers to buy only their products.

The second company we have selected for our discussion regarding its ethical pursuance of business is Metcash (Ažman and GomišÄek 2012). Metcash is a company which operates in the distribution and whole selling of grocery and retail. Besides, Metcash operates in the Automotive and luxury car servicing segment.


Good business practices of Woolworths and Wesfarmers

The company has invested time and effort in agreeing to the policy of good packing and has been playing a key role in up keeping the deals made at the Australian Packaging Covenant signatory. The company has made an excellent reputation in the way they package their product. The company has been an outstanding player in upgrading themselves and their way of packaging to a level of utmost importance. The importance they give for their packaging of the product plays a key role for the customer at the final moment of the choice of buying is made.

The company has been involved in many overseas trade agreements with many third world nations (Supply chain technologies – at Woolworths 2003). The commitments have been made regarding direct cooperation to technical knowledge transfer and consultation. The involvements in Bangladesh and Vietnam for direct purchase of their country made cotton and other products. The Uzbek Cotton commitment is one such agreement, the company ahs signed for a direct role in involvement and cooperation.

Apart from this; the company has earned the ranking of 67.4 % from the Greenweek rankings. The score is an overall reflection of the environmental commitments and implementation that the company has been engaged in.


Criticism and areas of inadequate involvement

The Woolworths and Wesfarmers have the largest number of poker machines in Australia. The company earns huge revenue from the sale of chips and gambling (Prospectus for the 1 for 8 Entitlement Offer of approximately 89 million New Wesfarmers Ordinary Shares at an Offer Price of $29.00 per New Wesfarmers Ordinary Share to raise approximately $2.57 billion 2008). The company has been accused many times of robbing the money of its countries' citizens by luring them to earn some money. The customers have complained that they always fail to win money. The company has earned a lot from the sale of poker chips country full. It's time the company makes some effort to stop robbing the people of their hard earned money by stopping these poker centers, and allowing only visitors of other nations to engage in this gambling activity. 

The Australian legislature can also make some notable changes to stop this trade of poker and gambling. The Nepal government has restrictions in place which bars its countrymen and women from the casinos spread all over the city. The locals are allowed only on the New Years Eve, Christmas and other special days (Prus 2004). The casinos in Nepal are major revenue generators but only at the expense of foreigners. The Australian legislature may take heed of the matter.

The company has been criticized by industry experts and public forums for misleading the customers on many matters.  The act of negatively influencing the customers has a significant disadvantage for the company and its brand perception. The company often urges the customers in their supermarkets to buy their particular products. This act affects the companies offering generic products or own products a significant loss of revenue and client base.

The company has also been fined regarding the above matter. The company we must say has not yet learned to form its mistakes, and continue to embark on its current trend of misleading the consumers.

The Coles have been criticized and fined huge amounts by the competent authorities for misconduct and bad behavior towards its customers. The company has had a reputation of mistreating its employees and customers on the premises and various grounds. There have been police investigations on many matters.

The company has also been charged with a fine for anticompetitive product and conduct. There might be individual rivalries among many business groups, but the company has been fined for negative conduct.

The company earns huge revenue from the direct sale of tobacco and alcohol. The company owned and operated about two-thirds of the total alcohol sales (Paynter and Edwards 2009). The negative health impact the company creates by promoting its alcohol sales and tobacco usage is very harmful to the overall growth and health of the society.


Good business conducts and practices of Metcash

This brand has also been getting awards consistently on its good packaging practices. The quality of the packaging has been lauded to be pretty good. The company is also a principal signatory of the Australian Packaging Covenant (Ahmed 2009). That marks the company to strictly adhering to its good packaging practices. The company signed the deal promising to supply packaging which is healthy for the customer’s yet environmental friendly when disposed of as garbage. 

The company promotes the use of GE-free products in its retail lineup. The company has been using the GE free products before any company in the entire industry. The company believes in the goodness of the GE free products in edible items.

The company bagged the Packaging Award of 2015 for the healthiest and safest packaging in all of their products.

The company policy of Genetically Modified crops or products is quite satisfactory (Clow and Baack 2004). The companies’ commitment to the cause of the environment is also well known.


Criticism and causes of concern for Metcash

The company must embark on a strategy of sustainable progress and development. The company cannot succeed in the long term without implementing the policies of the sustainable business. The aspects of the business which make the industry comment on the negative aspects of Metcash’s business practices are related to gaming.

The causes of significant revenue for the company apparently come from the gambling industry. The company relies heavily on its gambling trade for its generation of major revenue annually. The trade is a major hit among the countries citizens. But the trade heavily drains out money from the pockets of the poor and middle class. The company owned and operated major casinos all over Australia. The citizens must not only be discouraged from gambling, but these broad casinos must be closed urgently (Revenue 2005). The downfall of the economy can be attributed by some to gambling and massive spending.

The company also accounts for almost major tobacco trade. The company has been tremendously criticized for its direct involvement in tobacco and alcohol promotion. The company portrays the image of alcoholism and gambling along with smoking tobacco as a positive aspect of this culture, except that in reality it's not.

The company is involved in the grocery. The company sources its palm oil from unreliable and uncertified sources. The palm oil cultivations in Indonesia and Java, Sumatra are done by burning forest tracts and cultivating on them. The lungs of South Asia, which are the tropical rainforests of these countries suck out significant carbon dioxide and greenhouse gasses (Jope 2012). The clearing of these forests for the cultivation of palm trees is harmful to the environment. Moreover, where palm trees are planted, the soil is rendered ineffective for any advancement in future times.

The company must stop these unsustainable business practices at the earliest or must face destruction (Saharjo et al. 2006). The company cannot survive with all these negative criticism in the long run. The company must embark on the strategies of free trade and must promote competitive behavior among its contemporaries. It is high time, the company is made to realize this, and amend on its mistakes or it may suffer massive losses regarding the brand value and public perception.



Ahmed, A. (2009). Good manufacturing practices. ISBT Science Series, 4(1), pp.6-10.

Ažman, S. and GomišÄek, B. (2012). Asymmetric and Nonlinear Impact of Attribute-Level Performance on Overall Customer Satisfaction in the Context of Car Servicing of Four European Automotive Brands in Slovenia. Organizacija, 45(2).

Clow, K. and Baack, D. (2004). Integrated advertising, promotion & marketing communications. Upper Saddle River, N.J.: Pearson Prentice Hall.

Gas price regulation for a retail market administrator. (2004). Adelaide: Essential Services Commission of South Australia.

Jope, J. (2012). Special Edition: International Palm Oil Sustainability Conference 2012 Abstracts. Palm Scent, 3(6), pp.51-74.

Paynter, J. and Edwards, R. (2009). The impact of tobacco promotion at the point of sale: A systematic review. Nicotine & Tobacco Research, 11(1), pp.25-35.

Prospectus for the 1 for 8 Entitlement Offer of approximately 89 million New Wesfarmers Ordinary Shares at an Offer Price of $29.00 per New Wesfarmers Ordinary Share to raise approximately $2.57 billion. (2008). Perth, W.A.: Wesfarmers.

Prus, R. (2004). Gambling as activity: Subcultural life-worlds, personal intrigues and persistent involvements 1. Journal of Gambling Issues, 10.

Revenue. (2005). Kuala Lumpur: Lembaga Piawaian Perakaunan Malaysia.

Saharjo, B., Sudo, S., Yonemura, S. and Tsuruta, H. (2006). Greenhouse gasses produced during burning in the land preparation area using fire in peat area belong to the community. Forest Ecology and Management, 234, p.S247.

Sinapuelas, I. and Robinson, W. (2008). Entry for supermarket feature me-too brands: An empirical explanation of incidence and timing. Marketing Letters, 20(2), pp.183-196.

Supply chain technologies – at Woolworths. (2003). Work Study, 52(1).

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