U4A1 Woolies Case Study Notes (select)

the changes

• increasing wellbeing awareness and providing 24/7 wellbeing support to their teams

• since 2022 woolies have completed 15 product redesign projects which converted non recyclable materials into recyclable ones to reduced virgin plastic in their packaging by 4263 tonnes annually

• woolies are building a new distribution center in sydney that will have a five star green energy rating with LED lighting, solar panels and rainwater harvesting

proactive change

They planned their sustainability changes while they are still achieving excellent results in terms of KPIs. They have proactively considered the goals of the UN 2025 sustainable development goals and packaging targets set by the Australian government and proactively made plans to introduce these changes before they were required to by law

level of wastage

In 2022 they diverted more waste to compost and donated more food waste to farmers and charity but could still improve the amount of plastic film diverted as the figure has decreased from 2020. This may have influenced their change to recyclable packaging that reduced virgin plastic by over 4000 tonnes annually.

level of staff turnover

Levels have increased over the last 4 years being 33.4% in Victoria as of 2022. This indicates that staff may be unhappy with their working conditions and are choosing to work elsewhere. This may have motivated some of the “peoples” goals in the sustainability plan such as increasing wellbeing support and training/development opportunities for staff

societal attitudes driving

• Woolies received concerns from a community in Tasmania regarding the sustainability of the salmon fishing industry, pressuring Woollies to consider changes to the sustainable sourcing of inputs.

• Another example is that a major theme in the 2022 federal election was global warming indicating society cares deeply about the issue.

• Woolies uses 1% of Australia ‘a electricity which pushes them to develop a plan to increase sustainability and minimise their impacts.-

reduction of costs

Main driver for change because it is a major contributor in increasing profits. Woolworths use around 1% of aus electricity so moving towards 100% renewable energy by 2025 will allow the business to improve expense control and reduce electricity costs in the long term

legislation driving

• The Australian government established a 2025 national packaging target with goals including 100% of packaging being reuseable, recyclable or compostable by 2025

• This prompted woollies to start making changes to ensure their packaging is more sustainable to help them be ready for change that will be made into legislation

competitors d

• Coles have developed the plan “together to zero” which sets out their ambition to reduce its impacts on the environment including aspirations for zero emissions, waste and hunger

• This drove woolworths to expand their sustainability plan to ensure they were the first to implement sustainable change and are seen as the leading supermarket in the field

managers driving

• Woolworths management are highly supportive of the sustainability plan

• CEO Brad Bonducci spoke about the importance of the sustainability plan in his annual reports and addresses to the public and shareholders indicating he is committed to the issue

• Woolworths also have a chief sustainability officer as part of their management team demonstrating the commitment by management to succeed in the implementation of their sustainability changes

employees driving

• A key aspect of the changes being implemented by woolworths relates to people and include strategies that will directly benefit employees such as increased wellbeing awareness and providing 24/7 wellbeing support, increased training and volunteering opportunities

• These factors will increase the likelihood of employees being a driving factor as they believe it will benefit them overall

employees restraining

Woolworths level of staff turnover across aus was 31% in 2022 which is higher than in previous years which suggests there may be low morale amongst staff working at woolworths and they may therefore be less supportive of changing their work practices (such as learning new packaging creation, composting or waste disposal methods which would negatively impact the implementation of the changes)

time restraining

Woolworths aim to increase the sustainable use of inputs in their high impact commodities (tea, coffee) However they have found that in the current economic climate floods have impacted the production of crops and the access to resources have reduced due to the conflict in Ukraine

financial considerations restraining

• Woolworths is investing $780 million to fit out the technology of a new technology centre in Sydney which will have a five-star green energy rating. It will have solar panels, LED lighting, and rainwater harvesting.

• Woolworths plan to run all operations on renewable energy by 2025 and this will be a significant cost for Woolworths to implement the infrastructure required for this change

porters generic strats

• With rising inflation and a ‘cost of living crisis’ Woolworths are currently positioning themselves as a low-price supermarket and have dropped the prices of many products.

• For example, they have dropped the prices of more than 450 winter essential products such as soup and pasta.

• They are therefore using cost leadership and are increasing their market share by charging lower prices but still making a profit due to savings made in reducing costs.

how have woolies reduced costs so they can reduce prices

• The build of a new automated distribution centre in Sydney will lead to the redundancies of around 700 people, reducing labour costs.

• Woolworths have closed in store butcher shops and providing pre-packaged meat options instead. This has led to redundancies which will save labour costs.

• Woolworths are now running on 100% green energy in South Australia which will reduce their electricity costs