Woolworths plans to convert more stores to Metro format
Woolworths is making some big changes to many of its established supermarkets and it’s concerning customers who say they may go elsewhere.
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There could be big changes at your local Woolworths as the supermarket giant embarks on an aggressive expansion plan converting scores of existing stores to the smaller format Metro brand.
It’s worrying some shoppers, who are concerned pantry staples will be pared back, self-serve check-outs increased and prices hiked.
One local in Sydney complained it was a “bad move”.
But Woolworths has insisted that stores that change to Metro would “still have everything (locals) need for a full shop” and would offer “value”.
“In our big full service supermarkets we can offer more of everything because we have the space,” a Woolworths spokesperson said.
“In some smaller supermarkets where we cannot easily expand the store Metro conversions allow us to tailor the local range by introducing new product lines that are based on what the local community wants.
“It allows us to be more thoughtful in what we stock, so for example, in Alexandria we have reduced the number of products in what’s called general merchandise, things like batteries, light globes and stationary where sales are lower. We’ll still stock them, just not as many varieties.
“We’ve been then able to reuse this shelf space to put in more products that meet our customer needs, generally increasing the range in food. An example in Alexandria is a significant increase in our Asian food range which has been requested by the local customer base.”
Australia’s biggest grocer has just announced that two existing Woolies in Sydney’s inner west would be changed to Metro as well as another on the Sunshine Coast.
Woolworths’ Metro format isn’t new – but it has changed since it debuted in 2013.
Initially, the stores were smaller than other Woolies outlets and were mainly located in CBDs and near major railway stations. Some were housed in historic buildings leading to interiors far removed from a regular Woolies.
Focused on grab and go items, Woolworths’ bosses told news.com.au at the time that they expected some customers to visit as many as three times a day; perhaps to grab a coffee, then a sandwich at lunch and later to pick up essentials for dinner and the home.
But the concept has now evolved with a slew of existing, and larger, Woolworths supermarkets also brought under the banner. Branches in Sydney – in Surry Hills, Chippendale and Coogee among others as well as St Kilda and Hawksburn in Melbourne – have changed to Metro.
While takeaway food is still a feature; newer Metros have a wider range of other products. But they generally lack in store bakeries and manned deli counters.
“A big part of the Metro model is getting local input or effectively crowdsourcing our local range decisions - in this way our neighbourhood stores are partly ranged by the customers themselves,” the Woolworths spokesperson said. “Customers can stock the shelves with the items they want by using a QR code in store as part of our ‘Picked by You’ program.
“So far we’ve added more than 4000 products into Metro stores based on customer feedback through Picked by You and it’s an always on program so we’re constantly stocking products shoppers would like to see.
“Our neighbourhood stores will still have the same number of products, what is changing is the mix based on what is popular and also what the local community wants.”
As of mid-2022, 90 of Woolworths almost 1000 stores traded as Metros and that number has since increased.
According to its 2023 annual results, sales at Metro stores were up almost 22 per cent, compared to around 5 per cent at regular Woolies, partly due to more store openings.
Coles is also rolling out it similar Coles Local format while Aldi has seven of its Corner Store smaller stores now operating in Sydney and Melbourne.
Three store conversions announced
Woolworths has confirmed it plans to convert its longstanding store in Balmain, in Sydney’s inner west, to a Metro.
Additionally changing to Metro is a Woolworths store in Alexandria, also in the inner west, and one at Buderim on the Sunshine Coast.
The change has Inner West Council mayor Darcy Byrne concerned given Woolworths Balmain is the only full-sized supermarket in the area and a similar Metro store is already located in nearby Rozelle.
“Any further reduction in a product range at a Woolworths Metro will have a further negative impact on the local Balmain/Rozelle local economy and local businesses,” he said on social media.
According to local newspaper City Hub, one local said it was a “bad move for Balmain”.
“Seems management at Coles and Woolworths thinks everyone wants ready-to-go meals, packaged food etc.”
The local council has asked Woolworths to front up to a meeting to explain the changes.
A store in Avalon, on Sydney’s northern beaches, has recently changed to Metro.
One caller to Sydney radio station 2GB said the conversion, which took several months, saw more self-serve check-outs installed that had led elderly shoppers to become “overwhelmed”.
In Buderim, Woolworths admitted that it had already removed some products as it prepared to move to Metro as they “weren’t popular”.
One shopper told the Courier Mail they would “definitely go elsewhere” if the new style Woolies didn’t stock what he needed when it reopened.
But there’s also no doubt Woolworths Metro stores have proved popular. Many customers have welcomed being able to pop in for kitchen staples while also picking up a few things for lunch.
Even with the expansion, Metro stores will likely be in the minority with larger and more modern supermarkets with ample parking continuing to provide the standard Woolworths offer.
Woolworths has sought to reassure shoppers about the Metro change insisting the spruced up stores will have a “range tailored to meet the needs of the community”.
“Your Metro will offer some new and exciting products with more fresh ingredients and specialty ranges.”
Concern about prices
In a statement, a Woolworths spokesman said the converted stores would continue to have the “same great Woolworths value” with specials and the Everyday Rewards program.
“We know customers are looking to balance their budgets more than ever before,” the spokesperson said. “Metro Neighbourhood stores continue to have our seasonal Prices Dropped, Low prices program, all the catalogue specials and the same proportion of own brand products as well as a range of specials that are only available in Metros.”
However, prices can differ on some products between traditional and Metro Woolworths stores.
In March, a shopper noticed that an identical size and brand of coconut water was on sale for $3 at a standard Woolworths store in the inner west while the price had been hiked to $4.50 at a Metro store just three minutes’ drive away.
Woolworths told Channel 9 the difference was due to one store being a “convenience” branch – in other words, a Metro.
However, the Metro format hasn’t been successful in all locations.
A store that opened on busy strip The Corso, in the Sydney tourist hotspot of Manly, lasted barely more than a year when it closed in 2021.
Covid and a lack of tourists saw foot traffic plummet. But it was also a less attractive option given two full sized Coles supermarkets were within easy walking distance.
The pandemic also saw Woolworths close a number of Metros in the Sydney and Melbourne CBDs as the commuters who would be its shoppers worked from home.
“These conversions take time to work through and we’ll continue to update our customers via our team in stores and through community consultation sessions,” the spokesperson said.
Originally published as Woolworths plans to convert more stores to Metro format
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