Near-term earnings and margin pressure to remain with food price deflation. Australian consumers will continue to benefit from Australian supermarkets growing their "everyday low pricing" programs (EDLP). In our opinion, Woolworths' earnings margins will track steadily as the company continues to expand its EDLP range amid intensifying supermarket competition. Large ongoing capital expenditure (capex) requirements in order to grow online sales and invest in IT infrastructure to build digital capabilities. These investments are necessary to compete with established supermarket operators and new market entrants. We expect Woolworths' capex to be weighted toward store renewals, IT, and growth initiatives. Driving Woolworths' "ultra-convenience" offer is the ramp-up of digital and data operation projects under WooliesX in Australia and establishment of CountdownX in
