Supermarket giant Woolworths Group Ltd (ASX: WOW) has a plan to significantly tackle a $20 billion problem.
Woolworths was founded in 1924 by Percy Christmas, its first store was opened in Sydney’s Imperial Arcade. Woolworths is Australia’s largest supermarket business, it operates Woolworths supermarkets in Australia and Coundown in New Zealand. It also runs the retail department store Big W. With over 3,000 stores and more than 200,000 employees it’s one of Australia’s largest employers.
Woolworth’s Plan
Food waste is one of the biggest issues in the western world. Between the field and the end of produce’s life, lots of food ends up being wasted. Some estimates put the waste number at around $20 billion per year. That’s a lot of waste!
Woolworths and customers have to pay for the loss of the food with higher food prices for what does make it onto the shelves and into our homes.
The country’s biggest supermarket is trying to tackle its part of the waste problem by signing up for the services offered by a new company called Escavox, according to the Australian Financial Review,
This new business is trying to reduce wastage by tracking and monitoring produce from the farm to the supermarket, with each box having a tracking device to monitor the temperature, time and location.
If the idea is successful it will help extend the shelf life of fresh produce and show where things are going wrong. The grower and retailer can’t properly identify what is happening without proper tracking and monitoring.
The Escavox devices could also be used to track Australian produce exports. If inventory can be improved and wastage can be reduced, Escavox management think it could improve stock days and supply chain working capital.
Is This Good News For Woolworths?
If the tracking and monitoring reveals significant potential savings then Woolworths could be a beneficiary from the service, however it’s early days yet. Implementing the changes to the supply chain could actually be quite expensive.
Supermarket profit margins are low and it could be important to maximise every aspect, but the shares in the FREE report below could be better long term growth options than Woolworths.
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