Gaurav Malhotra

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14 June 2011 Retail Industry Inquiry Mr Phillip Weickhardt Productivity Commission GPO Box 1428 Canberra City ACT 2601 By email: retail@pc.gov.au

Dear Mr Weickhardt Re: Economic Structure and Performance of the Australian Retail Industry Woolworths Limited welcomes the opportunity to provide this submission to the Productivity Commission’s Inquiry into the Economic Structure and Performance of the Australian Retail Industry. Woolworths believes this Inquiry provides an important opportunity for the Australian community to understand the significant contribution that the retail sector provides to the Australian economy, the challenges it faces, as well as the opportunities open to it in the coming years. Operating some of Australia’s leading retail brands, Woolworths is a company committed to serving the customer - to providing Australian customers with the best possible value, convenience and choice whether they are shopping in one of Woolworths’ more than 3,100 “bricks and mortar” stores across the country or logging on and purchasing from our growing portfolio of online channels. A commitment to the customer is at the heart of everything Woolworths does, across all our business units and across all our retail formats and channels. Woolworths is also a company that makes a significant economic contribution to Australia’s economy with annual sales of more than $51 billion, a workforce of more than 170,000 team members across metropolitan and regional Australia and an annual indirect contribution to the economy that is estimated to be in excess of $96 billion and 652,400 full-time equivalent jobs. The Australian retail sector has changed considerably over recent decades with significant evolution in retail formats, the introduction of new, varied and innovative products, enhanced convenience and value and increased choice as to how, when and where to satisfy their retail needs. The key driving force behind these changes has been the evolving needs and expectations of Australian customers as their lifestyles have evolved, new technologies have developed and an increasing variety of products have become available. This is a trend that will continue - that is, customers and their changing behaviour will continue to determine the way in which Australian retail develops over coming years.

Notwithstanding these evolving customer preferences, there are some core customer expectations that Woolworths considers will not change - Australian retail customers are focussed on value, convenience and choice. That is, whilst customers will continually purchase different products or may shop via different delivery and store formats (such as online), they will still have a key focus and preference for retailers that deliver on these core retail expectations. A retailer that fails to deliver on these - regardless of the type of retail format or product sold - will fail to retain customer support in the competitive retail sector. This is as true now as it has ever been and will continue to be so into the future. Woolworths believes that the Australia retail sector is highly competitive and serves the needs of Australian customers well. Woolworths has, however, ongoing concerns about the impact of excessive and inefficient regulation on the Australian retail sector and the way it hinders retailers’ abilities to deliver value choice and convenience to customers. Of particular concern is that much of this regulation still relies on the notion that customers want to shop in “bricks and mortar” stores within a limited number of opening hours. This is no longer the case with Australians expecting to be able to access a full range of products at competitive prices 24 hours a day / seven days a week. These dated regulations also mean that Australians across the country are not being treated equally - their level of access, convenience and choice of retail offers differs depending on which local area, State or Territory a person lives. Whilst...
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