Woolworths Group Ltd (ASX: WOW) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $31.45. In morning trade on Friday, shares are changing hands for $31.36 apiece, down 0.3%.
For some context, the ASX 200 is up 0.5% at this same time.
Here's what's catching investor interest today.
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Woolworths shares to drop MyDeal exposure
In an announcement this morning, marked as non-price sensitive for Woolworths shares, the company said it plans to close its struggling MyDeal customer website by 30 September. Over the past several quarters, the supermarket giant has reported a decline in its MyDeal Gross Merchandise Value (GMV).
Woolies said the closure will enable it to give a stronger focus on its retail marketplace offer into BIG W Market and Everyday Market (on woolworths.com.au). The company said it aims to "leverage its strong traffic growth on existing digital properties".
However, Woolworths shares could be catching some headwinds today, with the cash cost of the closure expected to be in the range of $90 million to $100 million. Management noted that this includes the payment for the remaining outside equity interest under existing put and call arrangements, as well as redundancies resulting from the closure.
Atop the cash cost, Woolies cited a non-cash cost of around $45 million. That's primarily related to the impairment of MyDeal's assets.
What did management say?
Commenting on the MyDeal closure and its potential impact on Woolworths shares, CEO Amanda Bardwell said, "In February we said that we would assess the shape of the group portfolio to address areas where there was not a clear path to profitability or the prospect of a reasonable return on capital."
She added that MyDeal has delivered "marketplace expertise and leading technology to the group's marketplace platform", but the website is still now in its last days.
According to Bardwell:
Given the intensely competitive environment and the superior economics of marketplaces integrated into retail brands, we have made the decision to close the MyDeal customer website. The closure of MyDeal will lead to a meaningful reduction in Woolworths MarketPlus operating losses once completed.
Woolworths MarketPlus will continue to leverage the MyDeal technology platform, seller relationships and capabilities to grow the Group's BIG W Market and Everyday Market retail banners.
The ASX 200 supermarket said it will provide more details on the one-off costs associated with the MyDeal closure when it releases its FY 2025 results in August.
With today's intraday dip factored in, Woolworths shares are up just over 3% year to date.
