The Motley Fool

Will Woolworths’ $10 million plan boost the share price?

Woolworths Group Ltd (ASX: WOW) has a $10 million plan to boost its bottom line and the share price.

According to reports in the media, Woolworths is going to spend the money on training and create two new departments called “fresh convenience” and “fresh service” in a bid to steal market share from competitors.

The idea is that Woolworths staff will have better knowledge to be able to inform customers of products, what the best meat cut is and how to cook it.

News Corp media quoted Woolworths supermarkets managing director Claire Peters, “With customers’ ongoing expectations in fresh food, and more shoppers looking for increased convenience, our stores need to deliver the best possible customer experience. For our team members in store, it means more skills, training and opportunities to progress.”

The Woolworths change supposedly won’t lead to job cuts according to the company, however it seems there will be some role changes and some people will be provided “with the opportunity to apply for new roles in the revised structure” according to Ms Peters, but those who aren’t able or willing to be retrained or placed elsewhere will be offered a redundancy.

Customers would always like better quality service and Woolworths is not obliged to hire more people than necessary, but job losses can be negative to a company’s public relations. 

For Woolworths to stand out from cheaper alternatives like Aldi or Costco, the supermarket giant has to offer better levels of services, so I think this idea is a good one. Online shopping certainly doesn’t offer the same level of personalised service as in-store (yet).

Foolish takeaway

Woolworths is currently trading at just under 23x FY20’s estimated earnings. This seems a bit pricey compared to Coles Group Limited (ASX: COL) and the market as a whole for its potential growth over the next five years, which I think is going to be single digit profit growth.

I think I would rather invest in these top-quality ASX shares for my portfolio instead.

Our Top 3 ASX Blue Chip Shares for 2019

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

Simply CLICK HERE FOR YOUR FREE REPORT!

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now