Woolworths Group Ltd.

Overview Key strengths Key risks Strong market position in the concentrated supermarket sector in Australia and New Zealand. Reduction in scale and diversity following the separation of Endeavour Group. Predominant exposure to the resilient nondiscretionary food and retail staples segments. Cost inflation, supply chain disruptions and some ongoing, albeit reduced, COVID-19-related costs, will weigh on earnings despite strong sales volume. Hard-to-replicate Australian supermarket network, which creates significant barriers to entry. Persistent competitive pressures in the Australian supermarket sector, resulting in the need to continually compete on price to defend market share. Supportive financial policy with a commitment to an investment-grade rating. Large, ongoing capital expenditure (capex) requirements. We expect Woolworths to maintain its leading market position in the concentrated Australian

...Woolworths' solid position across retailing segments, and its sizable retail network and scale, underpin its business position. We expect Woolworths to maintain its leading market position in the concentrated Australian supermarket landscape. The company will continue to benefit from the significant advantages it has in the scale of its supply chain and procurement. In addition, Woolworths has a strong second position in New Zealand's supermarket retailing sector, and moderate geographic and business diversity. However, intense competition, principally from Coles, established independent supermarket operators and discounters temper these strengths. Supply chain pressures, particularly at the company's distribution centers, should normalize over the next six to 12 months. During the six months to Jan. 2, 2022, Woolworths recorded weaker-than-expected earnings, reflecting significant COVID-induced supply disruptions. Omicron-related disruptions caused staff absenteeism, missed delivery deadlines,...

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