Woolworths Share Price Has a Slight Drop

Woolworths Group Ltd [ASX:WOW] shares dropped a slight 0.02%

They are now trading at $26.56 a share while holding a market cap of $34.556 billion.

Woolworths has been active since 1924, and currently has 202,000 full time employees. As of December 2017 they changed their name to Woolworths Group Ltd.

Woolworths takes the lead in supermarket war

The supermarket war is leaning towards Woolworths’ favour as they managed to claim 32.2% of the market throughout 2017.

Ever since 2016 they were well ahead of Wesfarmers and Coles who only increased its market share by 0.1%, versus Woolworths’ 0.6%.

Coles and Aldi are only generating a limited amount of like-for-like sales, while independents continue to decline.

Woolworths like-for like sales are expected to grow by 4.2% for the year of 2018 which is ahead of the 1.0% forecast for Coles.

Woolworths is also expected to deliver a large growth of earnings which will take place in the current financial year.

Despite Woolworths being ahead of Coles, their prices are pretty much on par with each other, offering little differentiation to price comparison.

Coles being the one who started this price war in the first place, by reducing the price of its own brand milk, are now the ones negotiating peace as they move away from price-based marketing and into a more attribute and sustainability focused market.

Supermarkets are now looking to other factors beyond price in order to stand out.

Instead of focusing on price, Woolworths have now shifted a lot of their focus to service quality, social programs and engaging with the community.

Woolworths are featuring sports stars in their marketing campaigns, as the Commonwealth games approach.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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