NT escapes unharmed as Woolworths cuts back stores

The new $30 million Bakewell Woolworths is exceeding expectations but not at the expense of the major supermarket’s other Palmerston store, its best performing Territory location

Woolworths Bakewell store manager Jason Lawrence checks out the store’s fruit and veg. PICTURE: Katrina Bridgeford

The new $30 million Bakewell Woolworths is exceeding expectations but not at the expense of the major supermarket’s other Palmerston store, its best performing Territory location.

Woolworths has announced it will close 17 Australian locations and cut 500 jobs.

There will be no job losses in the Northern Territory according to Woolworths spokesman Craig Simonetto.

He said the new Bakewell store had increased market share since opening at the end of May.

“Our Oasis store in Palmerston is still performing very strongly,” he said. “It is clear that our new Bakewell store has attracted new customers to Woolworths.

“In fact we have exceeded our expectations since opening at the end of May and have added an extra 25 staff to Bakewell to meet demand.”

Woolworths has plans to sell the Bakewell store but remain an anchor tenant for the new owners.

The sale is part of $180 million of “neighbourhood shopping centres” taken to market across Australia.

CBRE Australian Retail Investments has been appointed to market the six Woolworths anchored properties, which include a mix of developed retail assets in Queensland, Western Australia, Victoria and the Northern Territory.

All of the assets are secured by long term, 20-year lease backs to Woolworths and the leasing on the support tenancies is strong as all of the centres on offer are situated in high growth corridors with very strong demographics like Palmerston.

The position of Woolworths is likely to strengthen further in the middle of next year when another Woolworths opens and another major retailer from the group Big W opens in the $300 million Gateway Shopping Centre.

The Oasis Woolworths has been the best performing of all the Darwin and Palmerston stores, leading the group in sales. Woolworths refitted the Nightcliff store with a coffee area and the Darwin stores adding a sushi area.

In announcing the job cuts, Woolworths Limited chief executive officer Brad Banducci also confirmed a financial year EBIT from continuing operations before significant items of $2.5 billion to $2.5 billion

“We have changed our Group operating model and moved more than 1000 team members directly into our businesses to improve accountability and help us better support our store teams and customers. We are also streamlining our shared services and as a result approximately 500 roles will be permanently removed from our support office and supply chain.

“We will continue to review non-customer facing roles throughout the business,” he said. “The actions announced result in Woolworths recognising a significant item of $959 million or $766 million after tax in our financial year 2016 results. $571 million of the pre-tax number will be non-cash.

“While we have had to make some tough decisions and this has ramifications for many of our team, we are confident we are putting in place solid foundations for the future and early results give us confidence we are on the right track. This will be a three to five year journey and we are determined to drive sustainable improvements in sales per square metre and Return on Funds Employed to deliver value for shareholders.”