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Money Woolworths learns not to mess with Plumpton's love of Doritos

01:32  24 may  2018
01:32  24 may  2018 Source:

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It seems the biggest corn chip lovers live in Plumpton.© Bloomberg It seems the biggest corn chip lovers live in Plumpton.

Make sure the people of Plumpton get their Doritos.

That's one of the lessons Australia's biggest supermarket chain Woolworths has learnt as it radically alters how it stocks products in its network of just under a thousand stores, seeking to tailor each outlet to match the social and cultural profile of its local customer base.

A "one-size fits all" approach to product selection was no longer good enough for a diverse country like Australia, Woolworths' general manager of supermarkets, Claire Peters, told the Australian Food and Grocery Council's annual conference in Melbourne on Wednesday.

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Woolworths' full-sized stores each stock about 20,000 to 25,000 product lines, drawn from a total pool of about 45,000 products stocked in its central distribution centres.

But the total number of products in Woolworths' range would grow from 45,000 to as many as 60,000 or 70,000, Ms Peters said, so the company could cater to each of its stores' individual needs.

Three recent store renovations in the Sydney suburbs of Marrickville, Plumpton and Lakemba showed how this would be done.

The chips aisle at Woolworths in Plumpton, the supermarket chain's number one seller of Doritos.© Jessica Hromas The chips aisle at Woolworths in Plumpton, the supermarket chain's number one seller of Doritos.

The wealthy millennial and gen-x customer shopping in gentrified Marrickville had welcomed freshly-baked flat breads and a wider selection of craft beer in the attached BWS bottle shop, Ms Peters said.

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Meanwhile, Woolies' store in Plumpton, in the city's outer-west, had been renovated to focus on low-priced items, specials, and that particular market's unmatched demand for corn chips.

“This would be a store that is the number one seller of Doritos," Ms Peters said, and so that store now had "vastly" more shelf space for the corn chips than any other store.

"We did significantly run out of Doritos because we gave it the same amount of space on shelves as Marrickville would have had, and our customers in Plumpton love Doritos," she explained.

"Overall customer satisfaction has had a significant increase, because quite simply we just weren’t able to keep some of the products on sale due to the space that we were giving them.”

Learning from the independents

Woolworths' supermarkets boss Claire Peters.© Eddie Jim Woolworths' supermarkets boss Claire Peters.

Catering to culturally diverse communities was also a major untapped opportunity, Ms Peters said, with recent celebrations such as the Lunar New Year and Ramadan, which started last week, showing there was significant demand at stores like in Lakemba, which has a large Muslim population.

“Feedback from our customers told us we did an OK job on cultural celebrations, but they were looking and needed everyday products they could come and buy outside of a celebration," she said.

“Some competitors are doing it better, I think independents are doing it better, and our customers are asking us to do it better.”

Woolworths’ move to grow the number of products they sell is a reversal of a recent industry trend of “simplifying” product ranges to save money, as well as growth in stocking their own home brand products.

Ms Peters said increasing Woolies' product range would not necessarily increase costs in its supply chain, but it was something the supermarket chain had to be cautious about.

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