Woolworths Limited, Australia

Abstract

Woolworths Limited was Australia’s largest retailer in the food, liquor and grocery sector. The retail activities were conducted through the supermarkets (contributing 88% of consolidated sales), general merchandise and wholesale divisions. Woolworths had two key goals: 1) to increase shareholder returns and 2) giving greater customer satisfaction. These led to the development of Project Refresh which commenced in August 1999 in the supermarkets division with a review of the buying and operations functions. As a result, the earnings per share increased from 19% in 1999-2000 and 24% in 2000-01. Following the success of the project, the company decided to advance to its next level, i.e. focus on supply chain management through Project Mercury. The case focuses on the choices related to effective implementation of Project Mercury including restructuring of its 31 distribution center network.