Woolies wants you to do all of your shopping in their stores, and soon. They don’t want you to pick up a few things and then mosey on down to Pick n Pay or Spar to buy the rest of what you’re after, because it’s cheaper. Woolies have a vision: they’ll make those things cheaper because they’re opening bigger supermarkets.

It’s no secret that Pick n Pay has had a hard time of things lately, what with chief executive Nick Badminton resigning, as well as the increased pressures from Walmart’s imminent arrival coming to bear on the Pick ‘n Pay business model.

Ian Moore, Woolworths CEO, announced yesterday that Woolworths will be taking full advantage of this by opening 10 new large-format supermarkets in the medium term.

Less than subtly, the first of these offerings will open in April on William Nicol Drive in Bryanston, not far from where Pick n Pay has set up its own premium supermarket.

Regarding about the 2 450 metre squared store, Moir said:

There will be lots of interactive areas, more things on offer, [you can] not only complete your shop but you can truly enjoy your shopping for foods.

Mr Moir said there was a gap in the market, especially since, “Pick n Pay was not as focused as it has been in the past.”

He continued:

We have been talking about this as a strategic direction for the business for a long time. We want to get people to think differently about Woolies. We are changing our values, making our prices more competitive and expanding our offer.

Most importantly, we want them to finish their shopping at Woolies: we want them to shop with a trolley, not a basket.

Syd Vianello, a Nedbank Securities analyst, called the move brilliant:

It has come at an extremely opportune time when there is trouble in the grocery world with the number two player grappling with internal problems.

Of course, Pick n Pay has put on a brave face, and chairman Gareth Ackerman said Woolworths’ plan was nothing new:

We understand their challenge clearly. We have the right plan in place to not only defend, but gain share at this end of the market. We remain the best place in SA to do ‘trolley’ shopping, and that is a strength we intend to enhance significantly over the next three to five years.

So, gang, it seems likely that we can apply the age-old concept that more competition will translate into better prices for us.

[Source: BusinessDay]