Woolworths', Australia Post's pain is shopper's gain

THE profit pain of two iconic Aussie businesses will be our economic gain.

Leading economist Dr Gary Mortimer says shoppers will cash in big time as Woolworths and Australia Post try to claw back massive losses from the past six months.

Woolworths revealed yesterday that it took a hammering in the first half of this financial year, wiping $972.7 million off its books following its disastrous foray into the home improvement market.

It booked $1.9 billion in write-downs on its Masters stores.

And things were not looking great for Australia Post as it reported an 84% profit drop to $16m as its letter business declined a further 9.5%.

While there are tough times ahead for both companies, Dr Mortimer says shoppers may cash in.

The Queensland University of Technology academic said Woolworths would regroup by focusing solely on its "fresh food people" mantra.

This means it will reduce the number of products it stocks; focus more on its cheaper own-brand range; offer more fresh food such as dairy, meats and bakery goods; roll out extra self-serve registers and redeploy staff to on-floor customer service positions.

"Woolworths is going to regroup and focus very strongly on their core business of food and liquor," Dr Mortimer said.

"This means cheaper products."

Dr Mortimer said Australia Post was likely to shut its costly retail arm.

He said it would cash in on the internet shopping boom by installing more package pick-up terminals at supermarkets, public transport hubs and other central locations.


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