Woolworths (ASX:WOW) opens new Sydney store customers can’t go to

Supermarket giant Woolworths launches its biggest ever ‘dark store’ to create 900 new jobs and cater for massive grocery delivery demand.

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Woolworths Group Ltd (ASX: WOW) has opened its biggest-ever ‘dark store’, just in time to cater for massive Christmas demand.

But customers will not be allowed in, as the western Sydney facility is purely dedicated to fulfilling online orders.

The Lidcombe store is 15,000 square metres, which is roughly 4 times the size of a normal full-service supermarket (or 12 Olympic-sized swimming pools, as Woolworths likes to say).

The year of COVID-19 has seen an explosion in electronic grocery shopping. Online sales for Woolworths were up 100% year on year in the period between July and September this year.

Online business is now 8% of Woolworths’ total supermarket sales.

“We’re seeing more and more of our customers turn to the ease and convenience of online grocery delivery in western Sydney,” Woolworths director of e-commerce Annette Karantoni said.

“To keep pace with demand, we’re investing in new online infrastructure to offer our customers more delivery windows and an even more reliable service. This is particularly important as we head into Christmas, when customers are busy and looking for ways to reclaim time with their loved ones.”

How do dark stores work?

The new fulfilment centre will add more than 20,000 delivery slots for online customers in Sydney. Up to 900 new jobs will be created by the need for personal shoppers.

Dark stores have wider aisles and more shelf space to allow personal shopper staff to pick items more efficiently. And of course, they don’t have to worry about bumping into regular customers.

The Lidcombe facility will allow personal shoppers to pick from 20,000 products. Woolworths already has dark stores running in Brookvale in northern Sydney and Botany in the south-east.

Woolworths shares were up 1.94% on Monday, to close trade at $38.45 but have dipped 0.23% lower in early trade today. The Woolworths share price was as high as $43.60 just before the COVID-19 market crash in March.

Shares for the supermarket giant, similar to other consumer staples, fell 4% last month while the rest of the market boomed. Major brokers, however, retain price targets between $40.80 and $44.00 for Woolworths.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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