Woolies goes local

Supermarket retailer to sell more locally produced and gourmet items

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shoppers will likely see more locally produced and gourmet items, if one of our biggest supermarket chains gets its way.

Supermarket giant Woolworths Limited (ASX: WOW) is looking for small-to-medium sized food suppliers to source local produce, as it seeks to tap into the popularity of buying local.

Related: New battlefront in supermarket wars

According to a report in The Australian, Woolworths is willing to work with suppliers that could supply as few as three stores in the local region.

"People are more and more focused on their own area – WA grown, Queensland or Tassie rather than just Australian", said Tjeerd Jegen, managing director of Woolworths' Australian supermarkets division.

He added that people are also more interested in gourmet items, because of the popularity of all the cooking shows, so people want to buy more locally. Woolworths has appointed a buying team in each state to find unique local products to add to the range, with no minimum on how many stores could be supplied.

For the first time, suppliers will also be able to supply product directly to the stores in which the products will be sold, bypassing Woolworths' centralised distribution system.

The move comes as Coles escalates the price war with Woolies, by rolling out $1 milk and cheap bread to its Coles Express convenience stores, and cutting the prices of more than 100 grocery items. Coles – owned by Wesfarmers Limited (ASX: WES), is trying to woo shoppers back to its private label items, as well as take market share from both Woolies and Metcash Limited (ASX: MTS) supplied IGA stores.

Foolish takeaway

Mr Jegen said that pricing for the locally sourced produce would be in-line with the supplier's other distribution channels, and there won't be any price negotiation for Woolies to get more profit out of these lines. Sounds like good news for local producers and consumers to me.

If you only invest in one company this year, make it our "Top Stock for 2012-13." Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

More reading

Motley Fool writer/analyst Mike King owns shares in Woolworths. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »