Analysis by Patrick Avenell
SYDNEY, NSW: Consumer Electronics has emerged as the backbone of Woolworths Limited’s diversified retail ventures, with strong growth reported across its Dick Smith stores. Where Woolworths isn’t performing so well is in petrol sales and its hotels business.
The growth in Woolworths’ consumer electronics division, which is currently in the process of macro rejuvenation, runs contra to the doom and gloom permeating the industry during much of 2009. These results are for the second half of calendar 2009, showing that consumer sentiment rose sharply in the lead up to Christmas.
The 5.9 per cent increase in consumer electronics, the majority of which was delivered by Woolworths Australian operations, will be welcome news to Dick Smith general manager Debra Singh. Singh has been at the forefront of Dick Smith’s overhaul, which has involved the discontinuation of the Powerhouse branding and the removal of agency status for Dick Smith and Tandy resellers.
Incorporated into this brand refresh was a new slogan, styling and product spectrum. This growth could be considered validation for the work of Singh and her team.
In addition to managing the Australian and New Zealand Dick Smith operations, Singh is the head of Woolworths’ Indian consumer electronics business. Unlike Harvey Norman, which is experiencing great difficulties planting itself in Ireland, Woolworths continues to strengthen in the Indian market, where it trades under the Croma brand.
Sales were up an impressive 37.8 per cent over the second half of 2009, albeit off a comparably low base. Expansion in this market is also progressing, with seven new stores opening during the half year, taking the total to 40.
The biggest loser for Woolworths was petrol, which was down 9.5 per cent year on year.