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Woolworths Group Australia advertising & marketing assignments

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Selected Woolworths Australia advertising

Woolworths is Australia's biggest traditional supermarket chain, having overtaken traditional rival Coles - then a unit of Wesfarmers - in 2006. The two groups compete fiercely across several sectors. Woolworths has the dominant position in the local grocery market, with 1,050 supermarkets in Australia and another 180 in New Zealand trading under the Countdown brand. However the biggest threat to both Woolworths and Coles has been the growth of German invader Aldi, which has made significant inroads into the homegrown brands' market share in groceries. Woolworths had around 32% national share in 2020 (and more than 57% of online groceries) compared to Coles' 29% and Aldi on just over 12%. Until 2021, the group also housed a collection of specialised liquor retail chains including BWS and Dan Murphy's, as well as around 850 pubs, hotels and gambling outlets. These were demerged in June 2021 as Endeavour Group. Woolworths sold its network of 700 service stations to forecourt operator EG Group for A$1.25bn in 2018 after an earlier deal to sell them to BP was blocked by regulators. Big W is a chain of general merchandise stores. In 2020, the group announced plans to acquire a majority stake in foodservice wholesaler and distributor PFD, but that proposal has been referred to competition regulators. In 2011, Woolworths attempted to open a new front against rival Wesfarmers - then owner of Coles supermarkets - with a move into home improvement in partnership with Lowe's of the US. New chain Masters was intended to rival Wesfarmers' Bunnings DIY business, but it failed to make headway. At around the same time performance suddenly flagged alarmingly in the main Woolies business following the adoption of a disastrous low-price strategy designed to counter the threat from Aldi and a rejuvenated Coles. That led to the departure of several key personnel including the CEO, and also the closure of the Masters DIY chain. Brad Banducci became the group's new CEO. There has been a solid recovery since with revenues rising to A$67.3bn (or approx US$46.4bn) for the year to Jun 2021, including A$11.6bn from Endeavour Group. Net profit for ye 2021 was almost A$2.0bn (US$1.4bn). Australian food retail accounted for A$44.4bn. Despite its name, Woolworths Australia has no direct connection to the old American or British retail businesses. Retail entrepreneur Percy Christmas appropriated the name for his new general store in 1924 when he discovered that the celebrated US company had failed to trademark the brand in Australia. Woolworths launched its first supermarket in 1960 and that side of the business gradually came to dominate its general retail division, now Big W.

Capsule checked 15th January 2021

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Who are the competitors of Woolworths? Main competitors in Australia's three most populous states of NSW, Victoria and Queensland are Coles and Aldi. Others include Foodland in South Australia and IGA in Western Australia. See Retail Sector index as well as Leading Advertisers in Australia

Historical profile information for Woolworths

Recent stories from Adbrands Update:

Adbrands Weekly Update 5th Jan 2017: Hard-pressed Australian supermarket giant Woolworths agreed to sell its entire estate of around 530 combined petrol stations and convenience stores to BP for almost A$1.8bn (around US$1.3bn). That business was formed from a previous merger with Caltex. BP already has a branded presence in Australia but the majority of its petrol stations there currently are franchised. The new acquisition, which is subject to regulatory approval, would more than double local share to 12%, but is unlikely to complete before 2018. Woolworths plans to use the cash from the deal to reinvigorate its grocery division, struggling with competition from main rival Coles and fast-expanding Aldi. [The deal was later blocked by regulators].

Adbrands Weekly Update 1st Sep 2016: Australia's biggest supermarket group Woolworths, a former high-flyer that has been struggling with poor performance for the past 18 months, reported a shock loss for the financial year to June. Reported revenues of A$58.1bn (around US$42bn) were 4% less than last year, but a 40% slump in earnings in its core grocery business and a huge write-off against its disastrous move into home improvement, resulted in a net loss of A$1.2bn. The supermarket business has suffered a sharp decline in performance as a result of an ill-conceived decision to move downmarket to combat discount rival Aldi. Even more damaging was its attempt to take on local DIY market leader Bunnings, a unit of its main supermarket rival Coles, by launching start-up chain Masters, a joint venture with Lowe's of the US. All Masters stores will be shuttered by the end of this year, resulting in impairments of over A$3bn. Excluding impairments and one-off charges, the group claimed a 36% fall in EBIT to A$2.56bn. Woolworths' main rival Wesfarmers, the owner of Coles and Bunnings, also delivered a disappointing set of results with large impairments against its general retail chain Target and heritage coal mining operations. Net profits plunged 83% to A$407m, despite a 6% increase in revenues to A$66bn.

Adbrands Weekly Update 3rd Sept 2015: The "Aldi effect" was apparent in the full year results from Australia's biggest supermarket group Woolworths. Just as UK supermarkets are reeling from the competition with German discounters, so are their Australian counterparts. Woolworths reported a near-13% fall in net profits, the first decline in almost two decades, following a disastrous attempt to match Aldi's low price strategy. Chief executive Grant O'Brien has already agreed to leave the group as soon as a successor can be found. Now, group chairman Ralph Waters will precede him out of the door. Woolworths net profit was A$2.15bn on flat revenues of A$61.15bn. In fact, the main culprits for the flat topline were a steep decline in petrol sales (as a result of falling prices) and weak performance at the group's Big W general merchandise business. But analysts have been alarmed by the strategic confusion at the supermarket business, which abandoned its long-established premium positioning during the year in favour of "Cheap Cheap" pricing. In fact Woolworths' results were not much worse than those of arch-rival Wesfarmers, owner of rival supermarket Coles, which quickly adopted the "fresh food" premium positioning abandoned by its rival. Group revenues were flat here too at A$62.45bn, while net profit fell 9% to A$2.44bn. However the Coles grocery division enjoyed solid increases in both sales and operating profit.

Adbrands Weekly Update 16th April 2015: Australian retailer Woolworths was in the firing line this week after a social media blunder in which it appeared to be exploiting human tragedy for commercial gain. It is the country's biggest retailer, a local icon in the same style as Tesco in the UK or Walmart in the US. For years, the grocery business has been describing itself as the "Fresh Food People". In a misguided tie-in last weekend with Anzac Day, the national holiday celebrating fallen soldiers, it launched a social campaign under the banner "Fresh In Our Memories", asking customers to share memories of family war heroes, "Lest We Forget", alongside the supermarket logo. The promotion was widely derided by customers for trivialising the solemn annual event. A similar controversy greeted UK grocer Sainsbury's Christmas 2014 ad, depicting a temporary truce between First World War enemies. Woolworths' campaign, though, lacked Sainsbury's emotive creative work, and ended up looking more like a mere cash-in. As one commentator said, "There is a place for brands in Anzac Day but you need to be seen doing the right thing and there is a fine line. This one stepped over that line by being too heavily commercial and was made worse by tying their brand slogan and brand positioning to it." 

Adbrands Weekly Update 27th Mar 2014: Leo Burnett scored the week's biggest account win, securing creative lead for Australian supermarket giant Woolworths. It is the country's highest-spending brand account with annual billings of around A$240m. Burnett takes over from Droga5, which remains on the roster for smaller special projects.

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