Woolworths e-commerce sales up 75 percent year-on-year

Woolworths Group recorded $3.5 billion of e-commerce sales in FY21, up almost 75 percent year-on-year, and intends to invest further in its online operations.

The retailer reported on a wide variety of technology and detail projects yesterday as part of its results, and suggested that the digital focus would increase at businesses outside of the core grocery operation.

Part of its accelerated plans include opening a new automated online fulfilment centre in Auburn in Sydney's West in 2024 in partnership with automation technology company Knapp.

Woolworths also has four operational micro-fulfilment centres across Australia and New Zealand, underpinned by systems sourced from Takeoff Technologies.  

Despite online's strong performance, Woolworths Group CEO Brad Banducci warned of competition from rivals, particularly as the pandemic took its toll on Woolworths' extensive operations.

He said Woolworths currently has around 3300 staff isolating, and said the company is watching closely how that might impact its e-commerce operations - in particular, its ability to deliver groceries as quickly as it would like to.

“It can take three days or four days in some areas to get a delivery window right now," he said.

He added that contactless pickup and delivery services had been expanded throughout FY21, with 629 locations offering 'direct to boot' services, and 425 locations offering same day delivery within one hour.

WooliesX highlights for the year included 12.1 million weekly consumer visits to the Woolworths website and app, and the expansion of its Scan & Go smartphone shopping service to 22 supermarkets and nine Metro Food stores.  

Big W

In FY21, Big W introduced a data, analytics and insights team to push its data-led capabilities.

Big W launched its own 'direct to boot' services. It also set up 10 online hub stores for home delivery, introduced same day delivery options, improved its online laybuy solution and launched a new website.

Over the next year Big W plans on “turbocharging digital experience by enabling seamless, engaging and personalised digital journeys” through its e-commerce proposition.

Big W’s digital acceleration resulted in e-commerce sales growing 4.6 percent in FY21.

Endeavour Group Demerger

Woolworths offered extra detail on its decision to demerge from retail drinks and hotels business Endeavour Group, moving it from an "ownership to partnership” operating model.

Woolworths will continue to provide IT systems and services, as well as supply chain and payment infrastructure support to the Endeavour Group.

Endeavour Group stated in its first preliminary result announcement that it has established a “new board, and governance frameworks, separated critical systems and stood up new functions to supports the business.” [pdf].

Endeavour Group owns 1630 retail liquor stores under the Dan Murphy's and BWS brands.

Woolworths Group combined its drinks business and ALH Group to create Endeavour Group back in mid-2019 following a restructure of the business before announced its intention to separate.

Running the numbers

Woolworths spent $154 million on digital projects and $132 million on e-commerce as part of its FY21 CapEx investment.

Total operating capital expenditure reached $2 billion over the year; Woolworths chief financial officer Stephen Harrison said this was partly “driven by an increased focus on unlocking e-commerce capacity during the year and driving digital traffic.”

Woolworths recorded a group net profit after tax of $1.971 billion, up 22.9 percent from the prior year.

Total group sales came in at $67.2 billion, up 5.7 percent from the year prior.