Woolworths has been at or near the top of that list since early this decade. Known affectionately as "Woolies" in Australia, the company has ramped up the refurbishment of supermarkets in an effort to retain and bring in new customers. The company is spending one billion Australian dollars, or roughly US$730 million, in its fiscal year ending June 2009 to rehabilitate old supermarkets as well as build new ones. Management plans to open 26 new stores in its fiscal year.
It is a bold plan, coming at a time when many companies are keeping spending to a minimum as a result of the global economic downturn. Banc of America Securities-Merrill Lynch analyst David Errington questioned the expenditures in a recent report that downgraded the stock to "neutral" from "buy." "We maintain our view that Woolworths is a great company managed by excellent retailers," he wrote. "However, under the current strategic direction, we expect returns to investors to remain relatively flat for a number of years."
In Australia, the economic downturn, which began to take hold in the second half of 2008, has yet to be characterized as a full-blown recession. The slowdown has actually helped Woolworths' supermarkets business as more Australians have been choosing to eat at home rather than in restaurants. Woolworths' discount chain Big W also has reported sales growth as well, as cost-conscious shoppers gravitate toward lower-priced goods.
Store locator for Woolworths supermarkets, Woolworths liquor and Woolworths petrol.