MENU

Woolies goes local

Shoppers will likely see more locally produced and gourmet items, if one of our biggest supermarket chains gets its way.

Supermarket giant Woolworths Limited (ASX: WOW) is looking for small-to-medium sized food suppliers to source local produce, as it seeks to tap into the popularity of buying local.

Related: New battlefront in supermarket wars

According to a report in The Australian, Woolworths is willing to work with suppliers that could supply as few as three stores in the local region.

“People are more and more focused on their own area – WA grown, Queensland or Tassie rather than just Australian”, said Tjeerd Jegen, managing director of Woolworths’ Australian supermarkets division.

He added that people are also more interested in gourmet items, because of the popularity of all the cooking shows, so people want to buy more locally. Woolworths has appointed a buying team in each state to find unique local products to add to the range, with no minimum on how many stores could be supplied.

For the first time, suppliers will also be able to supply product directly to the stores in which the products will be sold, bypassing Woolworths’ centralised distribution system.

The move comes as Coles escalates the price war with Woolies, by rolling out $1 milk and cheap bread to its Coles Express convenience stores, and cutting the prices of more than 100 grocery items. Coles – owned by Wesfarmers Limited (ASX: WES), is trying to woo shoppers back to its private label items, as well as take market share from both Woolies and Metcash Limited (ASX: MTS) supplied IGA stores.

Foolish takeaway

Mr Jegen said that pricing for the locally sourced produce would be in-line with the supplier’s other distribution channels, and there won’t be any price negotiation for Woolies to get more profit out of these lines. Sounds like good news for local producers and consumers to me.

If you only invest in one company this year, make it our “Top Stock for 2012-13.” Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

More reading

Motley Fool writer/analyst Mike King   owns shares in Woolworths.  The Motley Fool ’s purpose is to help the world invest, better.  Take Stock  is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!