Supermarket giant Woolworths may continue to struggle despite its near-billion-dollar decision to close 30 stores and sack 500 workers, according to UBS retail analysts.
UBS claims that, while the supermarket sector is expected to grow by 3.4 per cent over the next year, it will also become more competitive and Woolworths could continue to struggle.
The biggest threat to Woolworths is competition from Aldi and the possible entry of other new competitors such as Germany’s Lidl.
In addition, Woolworths faces slow market growth, low staff morale, and the pressures of market discounting.
Announcing the store closures and job cuts yesterday, Woolworths chief executive Brad Banducci was confident the company was back on track.
“While we have had to make some tough decisions and this has ramifications for many of our team, we are confident we are putting in place solid foundations for the future and early results give us confidence we are on the right track,” Banducci said.