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Key takeaways from the Woolworths Group Ltd (ASX:WOW) AGM

The Coles Group Limited (ASX: COL) ASX listing and subsequent Wesfarmers Ltd (ASX: WES) share price decline may have taken the headlines today, but it wasn’t the only event taking place in the industry.

In afternoon trade the Woolworths Group Ltd (ASX: WOW) share price has pushed 1.5% higher on the day of its annual general meeting.

Here are a few takeaways from the meeting:

Woolworths is making good progress with its connected, personalised, and convenient shopping experiences.

The company has continued to invest in digital and data as it believes customers increasingly want to shop in multiple ways including in-store, online, or pick up.

The retailer’s pick up service is now available at ~3,000 stores across the group and has been a material driver of its strong online growth.

In addition to this, the Woolworths Rewards loyalty programme has also been growing strongly and now has more than 11 million members. Management’s decision to connect Woolworths Rewards to its BWS and BIG W brands has positively impacted sales in those businesses.

This has recently been extended to cover 680 Caltex Australia Limited (ASX: CTX) fuel sites throughout the country.

The transformation of its Australian and New Zealand Food businesses is going well.

Woolworths’ customer scores have improved over the course of the year after temporarily being impacted by the removal of single-use plastic bags. Over 80% of its customers now regularly score the company 6 or 7 out of 7 on Voice of Customer measures.

But management won’t rest on its laurels and intends to focus on creating better experiences for customers. As a result, it has shifted over to a Net Promoter Score (NPS) system for measuring customer satisfaction.

During the year the company delivered 80 stores in its Renewal format. This covers 13% of its Australian Food footprint. These new formats are expected to improve customer satisfaction and sales.

Big W’s turnaround is showing promise.

It is early days but management appears pleased with the progress made in relation to Big W’s turnaround. In FY 2018 Big W delivered strong item growth and the first positive year of sales growth in almost 10 years.

This was achieved by lowering the price of 4,500 items and investing in the in-store experience.

While the company still expects losses from the business in FY 2019, these losses are expected to narrow year on year.

Should you invest?

I thought this was a strong update from the retail conglomerate and demonstrates why it would be a good investment at the right price.

Unfortunately, at 23x earnings, its shares are not trading at the right price at the moment for me. In light of this, I intend to wait for a better entry point further down the line.

So for now, I would focus on these blue chip shares which I believe offer far greater value for money.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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