Woolworths knows the scale of the Amazon threat

Photo: Peter Parks/ AFP/ Getty Images.

The chairman of Woolworths, Gordon Cairns, has laid out the supermarket chain’s response to Amazon’s entry into Australia.

The company has been building the digital side of the business and is now trialing express delivery.

Cairns told the company’s AGM today that it’s all about customers.

“Over the past year, underpinning everything in the group, has been an unwavering focus on the customer,” he told shareholders.

“We want to be obsessive about our customers, their needs and how we serve them better.

“If we do not, we will lose out to those who do, like Amazon.”

Amazon is widely reported to be about to open in Australia. The Amazon Marketplace team sent an email to sellers saying they will begin a testing phase today, signing off: “Let’s make history!”

A worker passes a line of Amazon delivery trucks in the US. Picture: Getty Images

Last month Woolworths confirmed its superior position against Coles for sales growth. Australian food sales at Woolworths were up 4.7% to $9.63 billion in the first quarter of 2018. Like for like sales were 4.9%.

Then the company reported that a focus on improving digital customer experience resulted in strong double-digit online sales growth.

CEO Brad Banducci today told the Melbourne meeting that sales performance has been solid so far this financial year.

He says the supermarket continues to see an increase in overall customer satisfaction scores.

“Our focus on digital aims to deliver increasingly personalised and convenient shopping experiences for our customers,” he says.

“We have recently combined our digital and rewards business to deliver on this customer need and called it WooliesX.

“So far this financial year, we have rolled out pick up to almost 1,000 Woolworths Supermarkets. Our customers can now choose to shop in-store, pick up the product at the store or have it delivered to their home.”