Retail and wholesale services is a very large industry in Australia. Woolworths and Coles are two of the very large industries in this sector. While the Woolworths group manages Woolsworth, the Wesfarmers group manages Cole’s supermarket. During the period 2014-2015 Cole’s supermarket made an annual profit of $2440. During the same period, Woolworths made an annual profit of $2453.3. These two supermarket chains are listed in ASX. In this assignment, a research proposal would be given based on the strategies employed by these two supermarket giants. The focus would be on how these two giants attract consumers. A study on the loyalty programs of employed by these two organizations. The social commitment, of these two giants towards the consumers, and the ethical processes, that they employ. The research would also focus on the commitment of these two organizations towards their suppliers. Other factors would also be explored in this assignment.
As per the annual report of 2015 Woolworths has grown steadily in the last five years in the food and liquor sector. The earnings per share has been rise and fall in the last five years. (Woolworths Annual report 2015). As per the annual report of 2015 Coles, which was purchased by Wesfarmers in 2007, the sales revenue has steadily grown in the last five years. The earnings per share has also steadily grown in the last five years (Coles’ Annual report 2015). These are annualized report for the whole organization.
Woolworths in 2013 announced a local food sourcing strategy. Under this program food from locality sources would be put on the shelves of Woolworths. This way they would be able generate confidence among the food producers of the local market. Woolworths believed that it was difficult for a small and medium sized business entrepreneur it was reach all of Australia (Woolworths Launches Local Food Sourcing Strategy - Woolworths Limited).
The strategy employed by Coles for the suppliers was the growth of the suppliers so that the suppliers can provide great products to the customers of Coles Limited. As a strategy they signed long-term agreements with the farmers and producers. This ensures that Coles boost the suppliers confidence and thus grow their business (Our Commitments – Coles Limited)
A comparative analysis of different supermarkets in 2013 in Australia found that Coles garnered a customer base of 8.8 million and Woolworths’s a customer base is 9.3 million. Woolworths market share is 39% and Coles has a market share of 33.5%. Together these two supermarket retailers hold 72.5% of the retail marketshare. They have a huge gap of more than 20% of their nearest rival for the market share (Roy and Morgan, 2016).
Both Coles and Woolworths have huge buying power and this is how they have been able to sell fresh produce. This war started in 2011 with their strategy to sell milk. These two organizations have somewhat shaped the food habits of the consumers. The financial power of these two supermarket retailers does have a consequences on the suppliers, local communities and also on the consumers (Keith, 2012).
The supermarket chains with the food sector dictates the food habits of the local citizens. The local community produce is very important in this game. The local food sector plays a role in the marketing strategy of the supermarket chains. Thus Woolworths and Coles have as a strategy have incorporated local foods into their processes. This consumer driven growth has also benefited the organizations. This has given rise to small local entrepreneurs who have also been benefited (Pearson & Bailey, 2012).
Woolworths supermarket and Coles employ a large number of efficient workers. The strategy of Woolworths is to employ middle –aged experienced staff for managing its resources. On the other hand Coles employs young staff workers. The reason for Woolworths strategy is that they think that retail business is a highly competitive work where only the best talent are required (Strategic Management Analysis Of Woolworth Supermarketupd).
A very important factor for the growth of the entrepreneur is caliber and morale of the senior management and the route to decision making by the management. A study found that the morale management of Coles was better than that of Woolworths. The morale and decision making ability of Coles has led to the easy availability of fresh foods in the stores (Knight, 2015).
For a supermarket to grow the supply chain management is to be efficient. The logistics of transporting the goods from the farms to packaging the food products is huge. Similarly the strategy of transporting the packaged food products from the farm to distribution center is also very important (Fernie & Sparks, 2014). The management of Coles believes that a significant investment in the supply chain benefits them. They can easily transport fresh fruits and vegetables while retaining the freshness of the product. Coles believes that by working with the farm growers they can reduce the financial impact on the supply chain and thereby give better products to the consumers at reduced prices (Better Supply Chains Will Help Growers: Coles Manager).
Woolworths as an entrepreneur believes in promoting better labor practices in the supply chain. It has a three step process towards supplier verification. The first step is the verification of the capabilities of the supplier, the second step is the site inspection of the supplier and the last is an audit on ethical practices by the supplier (Promoting Better Labour Practices In Our Global Supply Chains - Woolworths Limited).
To be successful in the retail sector one has to have a good supply chain management. The supply chain is dependent on the information network, synchronized supply of the products and the management of the supply of the products by the vendor (Arli et. al., 2013).
The aim of the research is to find the relationship between the growth of the two supermarket retail giants with relation their growth in different cities of Australia, strategies being employed, green development and their responsibility towards suppliers.
The research question for this assignment is as follows:
- What is the growth of the two organizations in different cities of Australia?
- What is the different strategies being employed by the two organizations?
- What are the responsibility of the two organizations towards the suppliers.
The objective of the research is as follows:
- To find the comparative growth of the two organizations in different cities.
- To find the different strategies employed by the two organizations
- To find the responsibilities of the two organizations towards the suppliers.
The change in financial prospects of the two organizations would be compared vis-à-vis over-all profit and loss, statements from different cities and different sectors of the retail and wholesale business. The data would be observed for the past five years. The financial statements of the two organizations for a period of five years will be collected.
The present research would focus on the comparative study of Woolworths and Coles supermarket giants. The research would primarily analyse the profit and loss of the last five years of the two supermarket retailers in different cities of Australia. The hypothesis is that which of the two entrepreneurs have fared better in the last five years in financial terms. Do the different strategies followed by them have different outcomes or do they have the same outcome.
Secondary data would be collected for this research and the secondary research technique would be used for the research. The data would be segregated on the basis of different sectors of the retail business of the two supermarket giants. Data will also be segregated on the basis of the supermarkets-chains in the different cities of Australia. The profit-loss statements based on the different business of the chains will also be compared. The effect that cities, sectors, loyalty programs have on the financial status of the business would be compared. This would give the correlation between the variables and business growth of the two organizations.
The expected research outcome will be a positive correlation between the growth of the business and the loyalty programs. With aggressive marketing strategies the two rival supermarket giants have a large share of the Australian retail and wholesale business. It is seen that with the facilities being provided to the consumers, the consumer now has a wider choice of food and beverages. This has translated into the growth of the business of the two organizations.
We will also be able to analyze whether Wesfarmers who bought Coles’ in 2007 were able to turnaround Coles’ chain. The analysis will provide findings that how the same strategy being employed by the two supermarket giants has profited them. It will also provide an insight into the social, environmental and personnel responsibility of the two organizations.
It can be concluded that with the growth in the business of these two supermarket giants they have put in more aggressive strategies to counter each other and other entrepreneurs. They have been successful as can be seen from the annual statements of 2014-2015. The research outcome would follow this trend. The research outcome would through up important facts into the city wise and sector wise annual growth of the two entrepreneurs. The research would throw light on the entrepreneurship development programs being taken up by the organizations. The research would also be able to give an insight into the social, local and green responsibility being taken up by the two organizations.
Roy Morgan. (2016). Market share narrows between Coles and Woolworths, while ALDI makes important gains. [online] Available at: https://www.roymorgan.com/findings/5427-market-share-narrows-between-coles-woolworths-while-aldi-makes-gains-201402120013 [Accessed 23 Aug. 2016].
Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, and Accountancy| Ventura, 16(1), 27-46.
Better Supply Chains Will Help Growers: Coles Manager. ABC Rural. N.p., 2015. Web. 21 Aug. 2016.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Keith, S. (2012). Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, 47-81.
Knight, Elizabeth. "Survey Terrible News For Woolies". The Sydney Morning Herald. N.p., 2015. Web. 21 Aug. 2016.
Our Commitments. www.coles.com.au. N.p., 2016. Web. 21 Aug. 2016.
Pearson, D., & Bailey, A. (2012). Exploring the market potential of ‘local’in food systems. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2(12), 82-103.
Promoting Better Labour Practices In Our Global Supply Chains - Woolworths Limited. Woolworthslimited.com.au. N.p., 2016. Web. 21 Aug. 2016.
Strategic Management analysis of Woolworth Supermarket UPD (2013) 24 Seven Writers (On Line) available: https://lastfreelance.wordpress.com/2013/11/23/strategic-management-analysis-of-woolworth-supermarketupd (accessed 21 Aug. 2016)
Wesfarmers Limited. (2015). 2014–2015 annual report. Wesfarmers Limited
Woolworths Limited (2015). 2014-2015 annual report Woolworths Limited Woolworths Launches Local Food Sourcing Strategy - Woolworths Limited. Woolworthslimited.com.au. N.p., 2016. Web. 21 Aug. 2016.
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