Woolworths CEO, Amanda Bardwell, announced major changes to the group’s food leadership – her first major organisational restructure since taking over from Brad Banducci in September last year. Divisions that were previously run separately, including Woolworths Supermarkets, Metro Greenstock and Woolworths Food Company Retail, have been united under a new banner, Woolworths Retail, led by managing director Annette Karantoni. “Our Woolworths Retail business is the cornerstone of our g
our group and critical to our success,” said Bardwell in a statement.
“Getting it right for our customers starts with our team and we are taking the opportunity to simplify the way we work to create the biggest impact for our customers,” she continued.
According to commercial digital and e-commerce specialist, Teresa Sperti, Woolworths’ restructure is a sign of the times for a major retailer under new management and government scrutiny.
“Naturally, a new CEO will take their time to assess and determine how to effectively drive the growth agenda and will seek to make changes to the operating structure of the business,” Sperti, founder and director of Arktic Fox, told Inside Retail.
“This, combined with a significant departure (of Banducci), creates and affords an opportunity to re-align the structure to support the new direction,” she added.
A new retail vision
Profitability and efficiency more often than not follow clarity of roles and responsibilities – a Bardwell-led Woolworths appears to be changing tack after a sales slump over the Christmas period due to supply chain and distribution issues.
“From a digital commerce standpoint, the alignment of a retail division is a logical step based on how the market is changing,” stated Sperti.
Woolworths’ organisational restructure and consolidation of its retail divisions could in fact hint towards a more nuanced strategy at play.
“As Woolworths seeks to serve the rapidly evolving consumer, including meeting the expectations of the ‘need it now’ customer, it is important to think about how the retail offering across their portfolio best serves needs to ensure incremental growth as opposed to cannibalisation between the brands and offerings,” Sperti elaborated.
“Whilst Metro does serve different missions, the rise of grocery top-ups via UberEats and quick commerce means a brand like Metro would potentially be playing a more significant role in their strategy,” she added.
More value for less
Both Woolworths Supermarkets and Metro are having to meet the expectations of the ‘need it now’ customer while continuing to deliver on the discounting promise the company announced last October.
In the same investment announcement that foreshadowed price lowering, Bardwell said that Woolworths had noticed more customers trading into home brands where the margin is not as rich as its other mid-priced branded products.
When asked if this restructure signals an increased focus on Woolworths’ home-branded product range Sperti replied, “Not necessarily”.
“Private-label products are a core pillar of any grocery retailer’s strategy, in particular in times where value is heightened for the shopper,” explained Sperti.
“Aligning these functions under a new retail arm will allow Woolworths to consider the role private label plays within the broader retail strategy across different formats,” she added.
The transformation of Woolworths’ retail arm, to be overseen by Karantoni, might allow for the Woolworths Group to provide value for its consumers through both of its retail offerings, Woolworths Supermarkets and Metro, without significant margin compression.
A similar sentiment was echoed by Bardwell in her restructure announcement: “With Metro, Greenstock and Woolworths Food Company Retail moving into Woolworths Retail […] we will be able to enhance the role our retail food stores and own brand play in meeting the needs of our customers.”