Woolworths has dovetailed onto the World Wide Retail Exchange (WWRE), the world's largest buying exchange believed to be worth $US450 billion, to boost product buying volumes and cut overhead costs.
The supermarket giant says its membership will modestly drive down operating costs. With annual turnover of $A20 billion, Bill Wavish, finance director of Woolworths, said cost savings were more likely to be on "garbage bags" than overall operating expenditure.
He added that while Woolworths was concerned with dollar volume, it only had "internal forecasts" on estimated savings and "was not prepared to share this with the public."
Stage one of the exchange will be launched next month. Members will run their systems on disparate IT platforms, but the exchange will be "fully operational" in a few years time, according to Wavish.
Co-members of the WWRE include vertical players such as Albertson's (US), Auchan (France), Best Buy (US), Casino (France), Delhaize (Belgium), CVS (US), GAP (US), J.C. Penney (US), Jusco (Japan), Kmart (US), Kingfisher (UK), Marks & Spencer (UK), Royal Ahold (Netherlands), Safeway (US), Target (US), Tesco (UK) and Walgreens (US).
CEO of Woolworths Richard Corbett said the company's stake in the e-commerce hub would lend it a "New Economy" identity. "The calibre of our partners is indisputable. We look forward to taking our place with our partners on a global platform. Woolworths is looking for opportunities to gain advantage to pass on to both our customers and our shareholders," he said.
Wavish said Woolworth's membership allowed it to rub shoulders with major competitors and "carefully" share business strategy information with players from North America and Europe.