Swot Analysis Of Woolworths And Woolworths

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The supermarket retail sector in Australia has the distinction of being one of the most concentrated in the world (Wardle and Baranovic, 2009: 477). The sector is dominated by Coles and Woolworths (owned by Wesfarmers Group and Woolworths Limited respectively), following a string of acquisitions and expansions by the ‘big two’ parent companies over the past twenty years. Woolworths currently owns 840 supermarkets in Australia as of 2011 (Woolworths Limited, 2011: 86), up 17 from 823 in 2010 (ibid) while Coles owns 741 (Wesfarmers Limited, 2011: 20), down 1 from 742 in 2010 (Wesfarmers Limited, 2010: 20). Woolworths is an Australian based trade group specializing in general products. In New Zealand, Countdown and Woolworths are fully owned…show more content…
The following paper will focus on analyzing Woolworth’s financials, performance and operational position using the financial ratio analysis learnt in this topic. The report will also look at benchmarking it against Coles Westfarmers Pty Limited (CW). This paper will provide financial performance evaluation for the last two years 2013/2014 using the following criteria: • Profitability • Efficiency • Short term solvency • Long term solvency • Market based ratios 1.1 Benchmarks Depending upon the type and price level and various products that are sold to consumers together with the positioning of a business and the size, cost structures will always vary. It appears that during the past five years the average profit margin across subdivisions has fallen to 5.5% of revenue in both 2014/15. It appears that there has also been weak trading conditions and discretionary spending which has caused retailers to carry excess stock in their stores. This meant that different retailers had to discount heavily in order to clear their inventory. Online shopping has become increasingly popular with consumers which has caused strong price-based competition between organisations and external operators, this in turn has also caused eroding profit margins. The financial performance evaluation using the above criteria will provide analysis recommendations (by

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