Corporate responsibility report 2014 - Woolworths Group
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Woolworths Limited is the 2014 global leader in the Dow Jones Sustainability Indices for the food and staples retailing sector Woolworths Limited was the first Australian retailer to be recognised as a global leader in the Dow Jones Sustainability Indices, achieving this for the second consecutive year. CONTENTS Our Corporate Responsibility Woolworths Liquor Group 25 United Nations Global Compact 53 Balance Sheet 2 New Zealand Supermarkets 28 Global Reporting Initiative 54 CEO’s Statement 4 General Merchandise 30 Independent Assurance Statement 57 A Great Place to Shop 6 Hotels 32 Store and Trading Area Analysis 59 A Great Place to Work 12 Home Improvement 34 Glossary 60 A Great Partner in the Community 16 Sustainability Metrics and Progress 36 Company Directory 61 A Great Place to Invest 20 Workplace Metrics 44 Australian Supermarkets and Petrol 22 Governance 51 Scope of Report Unless otherwise stated, this report covers all of our operations in Australia and New Zealand for the 2014 financial year (1 July 2013 to 29 June 2014). Data for global sourcing offices in Hong Kong and China is only included in the Workplace Metrics section (excluding Safety). With only 25% ownership and no operational control of Gage Road Brewery and 50% ownership of the Quantium Group, there is no information reported for these businesses. Corporate Responsibility Report 2014 | 1
Our Corporate Responsibility Balance Sheet A Great A Great Place to Place to Shop Work 29.4m Customers on average per week across 198,642 Employees the Group 3.1% 75,923 Young employees1 Reduction in average prices for customers 2,156 in Australian Supermarkets $750m Indigenous Australian employees 3,615 More than $750 million in savings for our customers from key promotional campaigns in Australian Supermarkets Employees with a disability 100% Fresh meat sold in Australian Supermarkets 33% are sourced from Australia Senior management are women 96% 10.37% Lost Time Injury Frequency Rate, Fresh fruit and vegetables sold in Australian Supermarkets are sourced from Australia a 14.7% decrease on 2013. 1 Under 25 years of age 2 | WOOLWORTHS LIMITED
A Great A Great Partner in the Place to Community Invest $47.6m Invested in community partners $1.7bn Dividends paid to investors, many of whom are mum and dad investors $7.2m Worth of educational equipment delivered $114bn to schools through Earn & Learn Indirect contribution to Australian economy $5.5m Raised in response to bushfires and drought 20% reduction Food waste, from stores NZ$1.2m Raised in the Countdown Kids Hospital Appeal $162m Estimated savings from energy efficiency 1.8m Meals made from food donations $2.4bn Paid in taxes Corporate Responsibility Report 2014 | 3
CEO’s Statement This year Woolworths Limited celebrates 90 years in business. Over the years we have survived and grown because we have successfully adapted to what our customers want. We have ensured our company works efficiently and uses its resources with a mind to the future. Grant O’Brien A Great place to shop In the past year, Australian Supermarkets’ customers benefited from deflation in average prices of 3.1%. Over the past five years, households saved on average $2,200 due to this drop in the real price of food and non-alcoholic beverages (based on an average basket spend). Local sourcing is important to us and our customers. In Australia, all our fresh meat and 96% of our fresh fruit and vegetables are produced by Australian farmers. In New Zealand, the figures are similar. We have appointed local sourcing managers in each state to help local producers get their products on the shelves of their local stores. We have partnered with fresh food campaigner Jamie Oliver to help us inspire a healthier Australia. We want to get Australians cooking with fresh food, and together with Jamie we are giving them the tools to do that. This year Woolworths Limited celebrates This is in Woolworths’ DNA, and as CEO We also want the products we sell to be 90 years in business. Over the years we it makes me proud to lead a company with produced safely and humanely. By the end have survived and grown because we strong values at its core. of 2014, all fresh chicken sold in our stores have successfully adapted to what our will be of RSPCA or equivalent approved It is as a result of these values and our standard. We lead Australian supermarkets customers want. We have ensured our performance that Dow Jones has named in phasing out caged eggs from our stores company works efficiently and uses its us global leader in the food and staples by the end of 2018. In the ACT, we no longer resources with a mind to the future. retailing sector of its Sustainability Indices sell any cage-produced eggs. On the ethical One of our six core values is that for the second year in a row. sourcing front, we signed the Accord on ‘we always do the right thing’ for our Bangladesh Fire and Building Safety and This report shows how Woolworths is a customers, our suppliers, our staff, worked with the not-for-profit sector on our great place to shop and to work, a great our communities and our shareholders. Uzbek cotton policy. supporter of our communities and a great business in which to invest. 4 | WOOLWORTHS LIMITED
More than $750m In savings for our 198,642 Employees, making us the second customers from key largest private sector employer in promotional campaigns Australia and one of the largest in in Australian Supermarkets New Zealand $47.6m In community investment, including $1.7bn Paid in dividends to shareholders $7.2 million from Woolworths Supermarkets’ Earn & Learn program A Great place to work A Great partner in the community A Great place to invest We employ more than 198,000 people, Our community investment in the past The Dow Jones Sustainability Indices (DJSI) making us the second-largest private year totalled more than $47.6 million, recognises our targets and progress to cut sector employer in Australia and one of including Woolworths Supermarkets’ energy use, refrigerant losses and food the largest in New Zealand. $7.2 million Earn & Learn program, which waste sent to landfill. aims to support schools with the learning We employ almost 76,000 people under Since 2009, we have invested $112 million in equipment they need. the age of 25. This year we celebrated the energy efficiency and will save an estimated contribution that Woolworths makes as an We continue to work with The Salvation $162 million in operational costs by 2015. employer of young people. We partnered Army as our official partner to help Carbon emissions from our buildings with News Corp Australia and some of people in need following natural disasters. are 18.7% lower than forecast and these Australia’s largest employers to join with After the NSW bushfires last October, efficiencies mean we have the equivalent the Prime Minister, the Hon Tony Abbott, Woolworths matched customer donations of 300 of our supermarkets operating as to discuss what business can do to further to raise more than $4.5 million. We also carbon neutral. develop our young people. supported drought-affected communities More to do in Queensland and NSW with $950,000 When it comes to providing a diverse and I am pleased with the progress we made in donations. inclusive workplace our commitment is this year. While these achievements are clear. We have 2,156 of our employees In New Zealand, the Countdown Food excellent, there is always more to do. I look identifying themselves as Indigenous Rescue program donated more than forward to taking further steps to ensure Australians and 3,615 employees working NZ$3.4 million of groceries to food bank our customers, staff, communities and with a disability. charity partners including The Salvation investors continue to come along with us Army, Kaibosh, Fair Food and 0800 as we drive positive changes for all. During the year, we invested $30 million Hungry. As part of food rescue, two-thirds in more than 900,000 hours of staff I would also like to take the opportunity of our Australian supermarkets partner training. Last year, we developed an to thank our stakeholders who have been with local farmers to collect waste food for online learning solution, Retail Edge, part of the Woolworths journey over stock feed or on-farm composting. that includes Certificates III and IV in 90 years. We could not have achieved our Retail Management as a pathway for We take our role as a responsible successes without your steadfast support our accelerated Fastrack program. retailer seriously. ALH Group has a clear and commitment. commitment to be Australia’s most responsible hotel and gaming operator by proudly going above and beyond what is required by legislation. Woolworths Liquor Group has developed the ‘Our Community, Our Commitment’ Charter which sets out our shared responsibility with the community on the responsible service of alcohol. Corporate Responsibility Report 2014 | 5
A Great Place to Shop Our recent offer of a loaf of bread for as little as 85 cents shows how we provide our customers with better prices. This trend of customers saving through lower prices has continued for up to five years. Across the retail industry, customers have saved the equivalent of more than $17 billion, through the difference between inflation and the increase in food and non-alcoholic beverage prices. This fall in the real price of food and non-alcoholic beverages over the past five years equates to a total average household saving of more than $2,200 (based on an average basket spend). 29.4m Our customers tell us they want value for Healthy food choices money, healthy food choices, to buy locally Customers are asking us to help them sourced products and that our products are make healthier choices, so we have Customers served on average ethically sourced. partnered with global healthy food each week across the group campaigner Jamie Oliver, who inspires Value For Money people to cook and eat better food at 3,231 The Australian retail market is fiercely affordable prices. competitive and customers have been benefiting from real price decreases over Jamie has helped us encourage our Retail stores the short and long term. customers to buy and eat fresh food in a number of ways. ‘Jamie’s Table’ is a range 7.9m Across our brands we have used a range of of recipes for easy, healthy meals, which promotional campaigns to provide value to encourage the use of fresh ingredients. our customers in 2014. Woolworths’ ‘More These recipes are found on cards in Savings Every Day’, Dan Murphy’s ‘Lowest Everyday Rewards + store or online, where they are even Liquor Price Guarantee’, Countdown’s 1.9m accompanied by a ‘how to’ video. ‘Price Lockdown’ and BIG W’s ‘Lowest Price Guarantee’ are just some of the offers The ‘Created with Jamie’ range of easy-to- Onecard members that have delivered savings to customers. cook meals includes fresh Australian meat and seafood, where most of the hard work Australian Supermarkets’ customers have More than has already been done for our customers. benefited this year from lower average prices, $1.2bn Online sales, up 50% as reflected by average price deflation of 3.1%. Our ‘More Savings Every Day’ key promotional campaigns, including Every Day Value, Extra Specials and Big Savers, have on the previous year delivered savings of more than $750 million to our customers. 6 | WOOLWORTHS LIMITED
3.1% Average prices are 3.1% lower $17bn In the past five years, customers in Australian Supermarkets have saved the equivalent of than last year $17 billion on the difference between inflation (2.6%) and the increase in $445 the prices of food and non-alcoholic beverages (1.3%)2 Average annual household saving over the past five years2 $2,200 Total household savings over the past five years due to the drop in the real price of food and non‑alcoholic beverages2 $750m Customers have saved more than $750 million through key promotional campaigns in Australian Supermarkets The ‘Jamie’s Garden’ sticker album and Since the launch last year, we have worked Nutrition labelling gets healthier collectable stickers, built on our previous with Nutrition Australia to cut portion In June, we were the first Australian popular collectables campaigns, are sizes, limit added sugars and increase the retailer to adopt the Federal introducing kids to information on healthy amount of wholegrain, dietary fibre and Government’s voluntary Health nutrition, fresh ingredients and the origin core food content in snacks. Star Rating Scheme as part of our of food. Mini greenhouses and seed response to customers’ preferences Product reformulation improvement packets even encouraged kids to try and our commitment to inspiring a is high on our list. In Australia, we are and grow their own fruit and vegetables. healthier Australia. working with the Federal Government Through the Jamie Oliver campaign, we and public health groups through the Food This star rating allows customers to make sold an additional 4.33 million items of & Health Dialogue to provide healthier quick and easy informed choices about produce compared to the same period choices for consumers. In New Zealand, the nutrition of a packaged product. We last year, and increased the demand for we are working with HeartSafe NZ. are putting star ratings on our own brands Australian grown produce. Our customers including Homebrand, Select, Macro, We are reducing salt, sugar and saturated spent an additional 7% on produce per visit. Gold and Created with Jamie products. fats, improving consumer messaging and We have partnered with Nutrition cutting portion sizing – in particular in Our customer research shows that Australia to make it easier for people bread, cereals, simmer sauces, processed 72% prefer the government-approved to buy nutritious snacks in the Healthier meats, soups, savoury pies, potato crisps, Health Star Rating and 74% say the Bites section of our food stores. This line savoury crackers and cheese. ratings will influence their purchases. has more than 130 different individually We are also continuing to eliminate portioned snacks that meet Nutrition artificial colours, flavours, MSG and Australia’s healthy snack criteria. preservatives (including sodium benzoate) from our own brands. 2 Source: Response to Competition Review Issues Paper. Based on the difference between inflation and the increase in the price of food and non-alcoholic beverages. Corporate Responsibility Report 2014 | 7
A Great Place to Shop Supporting local growers During the year we also made significant Fresh In the past year, we signed partnerships commitments to the dairy industry. We Australian Sourced (%) New Zealand sourced (%) worth millions of dollars to Australian signed long-term contracts to produce (for Australian Supermarkets) (for New Zealand Supermarke producers of fruit, vegetables and milk. Woolworths Select milk, with several These have created hundreds of jobs and dairy processors around Australia. These 100 100 99 97 96 96 provided businesses with the confidence contracts, for up to ten years, give dairy 4 to invest in new plant and equipment. farmers and milk processors long-term 85 Fresh chicken, pork and lamb certainty that allows them to invest in their A highlight was a new partnership with SPC Fresh fruit and vegetables Fresh fish and seafood 61 businesses with confidence. Fresh fruit and vegetables Ardmona for SPC to produce all Own Brand Fresh bakery products canned fruit products. As a result, 13 lines We also successfully launched our first of Select canned fruit will replace lines Farmers’ Own brand of milk, with the imported from Thailand and South Africa. milk sourced directly from farmers in the Fresh meat Manning Valley, NSW. After an initial Fresh beef Fresh fish This means that all our Own Brand canned trial of supplying three varieties of milk apples, pears, peaches and apricots will be to eight local stores and 12 stores in Australian-sourced, saving 50,000 trees in Sydney, this product is now available in Victoria’s Goulburn Valley and benefiting all NSW Woolworths supermarkets. We 118 fruit growers. have also introduced Farmers’ Own in all Since the announcements, customers have WA stores using milk from farms in the Fresh supported our Australian canned fruit, Margaret River and will roll out the product with a 48% sales increase Australia‑wide. using milk fromAustralian farms in Sourced Victoria(%) and New Zealand sourced (%) (for Australian Supermarkets) (for New Zealand Supermarkets) This peaked at 124% in fruit-growing Queensland before the end of 2015. areas such as Mooroopna, the site of SPC’s 100 100 Our Local Sourcing Managers have been 99 97 96 96 processing plant. working with small suppliers to deliver their 4 85 For vegetable growers and processors in products to new customers, whether at Fresh chicken, pork and lamb Tasmania and western NSW, the past year a few local stores or to a large number of Fresh fruit and vegetables Fresh fish and seafood 61 Fresh fruit and vegetables brought good news. We signed a contract stores in many states. Companies like East Fresh bakery products with Simplot Australia to provide all our Coast Beverages from the Central Coast Select frozen vegetables. This will benefit (NSW), BD Farms from Adelaide (SA) and 155 growers who are now planting a further the Queensland Yoghurt Company on the Fresh meat 650 hectares of peas, onions, carrots, corn, Sunshine Coast (Qld) are now selling more Fresh beef Fresh fish green beans, broccoli, cauliflower and of their products locally and nationally. brussel sprouts. Groceries Branded and Own Brand Branded and Own Brand Own Brand – % Australian Sourced – % Stock Keeping Units (SKU)3 – % Sales Own Brand – % Australian Sourced 86.2 86.2 79.7 79.7 75.9 75.8 75.9 75.8 70.7 70.7 Homebrand Homebrand Homebrand 1.3% Homebrand 3.2% Select 3.5% Select 5.1% Macro Select Macro Total Macro 0.8% Macro 1.5% Gold Select Total Gold Gold 0.2% Gold 0.1% Branded 94.2% Branded 90.1% 3 Calculated using different criteria to 2013 8 | WOOLWORTHS LIMITED 4 Excludes produce that is not grown in commercial quantities in New Zealand, e.g. bananas, pineapples, taro and table grapes
cage free eggs Woolworths is the first Australian retailer to commit to the phasing out of cage-produced eggs. 37.4% free-range eggs Sales growth for animal welfare products (Australian Supermarkets) Percentage Percentage Percentage of increase of increase of total category of volumes in 2013 volumes in 2014 volumes in 2014 (%) (%) (%) Macro free-range chicken 30.8 23.0 9.7 Free-range eggs 9.5 9.8 37.4 Barn-laid eggs 8.4 0.4 10.0 Organic eggs 60.9 0.9 2.6 10.0% barn-laid eggs Value with values More than half the eggs sold in Just as customers have told us that they Woolworths supermarkets are now want healthier choices, they have also been cage-free (free-range, barn-laid or organic clear that they want ‘value with values’ – eggs), and sales of cage-produced eggs that is, they want value for money when continue to fall each year. they shop and they want this done ethically. Chicken meat: All fresh chicken meat sold Animal welfare in our stores by the end of 2014 will come All our Own Brand products will be produced to high standards of animal welfare. from RSPCA approved (or equivalent) farms. Chicken used as an ingredient in 2.6% Organic eggs Own Brand products will also be sourced Animal welfare is important to our from RSPCA approved (or equivalent) customers, so we work closely with farms by the end of 2018. our suppliers to improve the welfare of animals used in our Own Brand products. Our Macro brand chicken meat is either Customers increasingly want food certified to animal welfare criteria of Free – particularly chicken, eggs and pork – Range Egg and Poultry Australia (FREPA) or produced from livestock reared to high the Australian Certified Organic Standard. standards of animal welfare. Pork: All our fresh pork meat is sourced Eggs: Woolworths is the first Australian from farms that only use gestation stalls retailer to commit to phasing out cage- for less than 10% of a sow’s gestation produced eggs, and we will phase these period. We are also on target to extend out and stop using them as ingredients free-range pork to all our stores by the in our Own Brand products by December end of this year. 2018. Since we announced our intention to phase out cage-produced eggs, 535 of our supermarkets no longer sell cage-produced eggs. 5 As at 8th October 2014 Corporate Responsibility Report 2014 | 9
A Great Place to Shop Woolworths sold more than 6,600 tonnes of MSC and sustainable aquaculture certified fish and seafood Sustainable seafood All our fish and seafood will come from sustainable sources. Our long-term goal is to have all our wild-caught seafood sourced from fisheries certified to Marine Stewardship Council (MSC) standard or equivalent. For farmed seafood, we aim to have all the products certified as sustainable through credible third-party certification schemes Palm oil: This year, we used 5,737 tonnes These certification schemes aim for better by next year. of palm oil in our Australian Supermarkets prices and decent working conditions for We do not use harmful catch methods such Own Brand food products. Almost farmers and workers in the developing as fish aggregation devices (FADs) for tuna two‑thirds of this was certified sustainable world. We offer our customers a wide harvesting. All our Own Brand canned tuna under the identity-preserved, segregated range of certified products in our Own on shelves will be FAD free from early 2015. or mass‑balance certification models, Brand as well as other popular brands in FADs increase bycatch which occurs when compared to less then 10% in the previous the tea, coffee and chocolate categories. species other than the targeted tuna are year. The balance of the non-certified We also have a long-established ethical caught accidently in fishing nets. palm oil will be covered by the purchase of sourcing policy, which enacts the GreenPalm certificates. (These certificates Our high volume product lines have been International Labour Organisation (ILO) are sold on the GreenPalm Market and assessed by the Sustainable Fisheries conventions and the UN Global Compact’s the full value is returned to the RSPO Partnership (SFP) based on sustainable core values of human rights, labour producer to re-invest in sustainable sourcing criteria. The SFP’s assessments led standards, the environment and palm‑oil production.) to Woolworths delisting a number of species anti-corruption. considered under pressure from overfishing Our customers have told us they want We expect all our suppliers to comply and other impacts. to know when palm oil is used in our with our ethical sourcing policy, which products, so we are labelling all the oils SFP’s assessments are based on scientific has a compliance audit program for used in our products. At present, almost evidence, independently conducted and factories making our Own Brand products. half (48%) of our Own Brand food transparent. The assessment methodology, Experienced third-party certification products that use palm oil have it listed results and sustainability ratings are bodies conduct these audits for us and as an ingredient. publicly available on SFP’s website at rate factories as approved, conditionally fishsource.org. Woolworths is a member of the Roundtable approved or at risk. Factories at risk or on Sustainable Palm Oil (RSPO) and use with critical corrective actions can’t start Deforestation their sustainability certification standards. production for Woolworths until they take Our Own Brand products will have zero net corrective action and resolve critical issues. deforestation by 2020. Better conditions for workers in our supply chain Deforestation is a major global problem, We uphold human rights for our employees with tropical forest destruction estimated and those working in our supply chain. to cause about 20% of greenhouse gas emissions. Deforestation also interrupts Public concerns about working conditions the water cycle and contributes to soil loss. for small farmers and workers in the Because of this, we aim to have zero net developing world in areas such as tea, deforestation impact from our Own Brand coffee and cocoa production have created products within six years. a growing market for independently certified products such as FairtradeTM, Rainforest Alliance and UTZ certified. 10 | WOOLWORTHS LIMITED
Paper and timber Own Brand copy paper catalogue paper outdoor furniture 100% 441,512 100% of Own Brand (including Select and Homebrand) tissues, toilet paper and We procured 441,512 reams of copy paper for use in our Australian businesses 100% kitchen towels of our catalogue paper All ‘patio by Jamie Durie’ used in Australia and outdoor furniture New Zealand sold at BIG W and all were from sustainably managed sources certified by the Forest Stewardship Council (FSC) catalogues, 916m weighing 49,729 tonnes comes from sustainably managed sources certified by the FSC sourced from sustainably managed sourced from sources certified third-party certified by the Program for sustainable sources the Endorsement of 0.5% Forest Council (PEFC) reduction in office paper use Tonnes of certified tea, coffee and chocolate 3,615 Rainforest Alliance 2,834 Fairtrade 805 UTZ Corporate Responsibility Report 2014 | 11
A Great Place to Work woolworths people are Woolworths is one of the largest to young job seekers, which included special because... employers in Australia and New Zealand. that all experience is good experience, We provide our employees with a don’t underestimate the value of great place to work, and a diverse and communication and prepare and research supportive work environment. for job interviews. Woolworths is inclusive During the year we also relaunched our Diversity and inclusion are essential to our careers website, wowcareers.com.au, continued growth and success, and we are providing a vastly improved job search committed to fostering and sustaining an function and compatibility with mobile inclusive and flexible workplace. devices. Job seekers who access the site can find out key information about the One of our values is that ‘we always do business, career opportunities and our the right thing’, which includes that we graduate program. are all responsible for providing a working environment where everyone is treated More women at the top with dignity, courtesy and respect. Our This year, we have reached 33% employees should feel comfortable in representation of women at Board level their workplace, regardless of their gender, and three levels below – meeting this target age, ethnicity, beliefs, disability, sexual a year earlier than planned. orientation or gender identity. To reach this target, we have focused More younger people on more flexible work for employees, Woolworths is proud of its role as one of 50:50 attendance on all training the largest employers of young Australians programs, graduate recruitment, and New Zealanders. We employ more than and gender reporting. 75,000 young people and we will continue Of the 123 executive women appointed to provide opportunities for new generations during the year, many are in roles as they start their careers. such as general manager – marketing, During the year we partnered with News strategic marketing manager, senior Corp Australia to deliver the Generation property manager, strategy manager Success initiative, which enables young and finance manager. people to talk to some of Australia’s Grant O’Brien continues to be a member largest companies about improving job of the Male Champions of Change, opportunities for their generation. a group of 22 CEOs committed to Young employees from these companies increasing the number of senior females participated in a roundtable with in Australian leadership. their CEO’s and the Prime Minister, Tony Abbott. Participants discussed the challenges faced by young job seekers and by their employers. This enthusiastic group of young people provided advice 12 | WOOLWORTHS LIMITED
We are the 2nd Largest private sector employer 179,796 in Australia Australians Woolworths employs 1.5% 18,660 New Zealanders Of Australia’s total workforce Including 198,642 75,923 young people (under 25) 17,885 older workers (over 55) Employees 33% Women comprise 33% of Board members and managers up to three levels below 2,156 Indigenous Australian Employees (1.2% of Woolworths’ Australian workforce) 3,129 Maori or Pacific Islander employees (1.6% of total Woolworths workforce) Prime Minister Tony Abbott with participants of Generation Success. 3,615 People with a disability (1.8% of More Indigenous employment Our Reconciliation Action Plan aims to close the gap between Indigenous and Other pathways to employment include internships and a graduate program. Hannah Pehi, winner of the Generation non-Indigenous Australians through One ‘CEO for the Day’ competition, Woolworths’ Australian workforce) employment. In this year’s employee completed an internship and gained engagement survey, 2,156 employees full‑time employment with Woolworths. identified themselves as Indigenous. We are a member of Supply Nation, a body We are working with external partners on dedicated to growing diversity within the pre-employment programs in communities supply chain. We use the teleconferencing to create the best opportunities for service provided by Message Stick, a potential employees to gain retail skills business certified by Supply Nation. and prepare to enter the workforce. Woolworths also supports Indigenous Over the past few years, our partnerships suppliers such as Kalano Farm, a commercial with organisations such as Diversity tomato growing operation in the Northern Dimensions and Globally Make A Difference Territory, which supplies our supermarkets have delivered employment opportunities and is a past recipient of funding from our for almost 900 Indigenous workers. Fresh Food Future program. Corporate Responsibility Report 2014 | 13
A Great Place to Work 900,000 Over 900,000 hours of online, classroom and on-the-job training sessions, across more than 1,000 courses6 $30m More than $30 million7 invested in training staff 509 Apprentice butchers and bakers trained More jobs for people with disabilities More career development We have developed a Woolworths Limited One of our priorities is continuing to ‘We never stop learning’ is one of Leadership Profile and launched it across support people with a disability to Woolworths’ core values, and all the company, identifying the six behaviours find jobs. We have introduced a new employees are expected to take personal required for leadership success. recruitment system and, to make sure responsibility for improving and developing Training and development it’s disability friendly, we have asked the themselves and each other. We provide Fastrack: During the past two years, Australian Network for Disability to review a mix of learning opportunities, including 218 employees have participated in the the application process. coaching and conversations, everyday Fastrack program for future managers experiences and formal training. This year, 3,615 employees voluntarily and leaders. In the August 2014 intake declared they had a disability through Online tools encourage all staff to of 114 employees for the nine-month our annual employee engagement survey, participate in training, plan and track cross-business course, 42% were women. an increase of 554 from 2013. their development, and engage with their Management and leadership managers and talent development teams We continue to be a gold member of the development: The Leadership Edge to help achieve their goals. Australian Network on Disability and our program began this year for 121 operational Group Head of Safety and Health is a Investment in development spans core leaders across all businesses. Modules member of the board of this organisation. training programs, training for new include peer coaching, on-the-job We recently took on an intern through a employees and leadership programs assignments and face-to-face training ‘step up’ program – helped by the Australian for managers and executives. through a values-based approach. Network on Disability – and as a result the Graduate program: Graduates are intern has been offered a job. supported through on- and off-the-job More experience training for two or three years. This year’s We also employ almost 17,900 workers, 46 graduates joined the 44 already in aged over of 55 years. We leverage the the program. unique contributions and experience of these employees to meet the needs of our customers. We actively recruit older workers and advertise on the olderworkers.com.au website. 6 Excluding ALH Group, The Wine Quarter, Pinnacle, EziBuy, Home Timber and Hardware Distribution Centre award employees, Global Sourcing, Retail FM, and New Zealand Supermarkets employees 7 Excluding, The Wine Quarter, Pinnacle, EziBuy, Home Timber and Hardware Distribution Centre award 14 | WOOLWORTHS LIMITED employees, Global Sourcing, Retail FM, and New Zealand Supermarkets employees
More care for our people Our employees expect to work in a safe More staff development online and in off-the-job workshops to environment and for us to provide them through Retail Edge help them increase the effectiveness with the training and equipment they need Last year, we developed an online of their retail skills, gain merchant to conduct their work safely. We require learning solution, Retail Edge, which skills and gain customer service our employees to report all incidents, enables employees to use flexible experience. We have found that Retail whether near misses or those which result accredited training when it suits them Edge gives employees more flexibility in an injury, so we can address the cause in any location. to learn and collaborate across all and ensure they receive the required our divisions. So far, 1,343 employees treatment and can return to work. We see nationally accredited training have taken part. as a core part of developing retail At the time of preparing this report our skills throughout Australia and This year, the Retail Edge program Lost Time Injury Frequency Rate (LTIFR) we offer traineeships to people was recognised internally, receiving was 10.37%, a decrease on the restated who want to advance their skills in the Jack Shewmaker Innovation rate we reported for 2013. retailing and providing exceptional Encouragement Award. All Good customer experiences. The program has also been recognised We are encouraging employees to The Retail Edge program includes in the retail industry through trainer make healthy life decisions by providing Certificates III and IV in Retail excellence and finalist nominations in information and building a culture that Management, and it’s a pathway into the Australian HR Awards – Best Use promotes healthier behaviours. The key our accelerated Fastrack program. of Technology, and Best Learning and strategies of the program are to: We aim to have 10,000 of our Development Strategy categories, and ·· encourage employees to understand employees participate in Retail Edge for the National Learn X Impact awards. their health through face-to-face or during the next five years. online health assessments The program’s WOW Learning Zone ·· educate employees on their health recognises people’s existing retail and give options on how that might skills and experiences through online be different learning programs. Trainees learn ·· support an employee when they choose to use available programs. Our wellbeing program, All Good, has extended beyond the initial pilot within the Supermarkets group, with elements introduced to other divisions. We have seen positive results too: a group of employees saw their aggregate ‘bio-age’ drop 1.9 years through the program. (Bio‑age is a person’s body-age in contrast to their actual age – an unhealthy person’s bio-age may be 60 years compared with their actual age of 45 years.) Other positive behaviours resulting from the program were better nutrition, more exercise and less smoking. We have found this change doesn’t stop with the individual but also influences others around them to live healthier lives. More than 8,000 employees are enrolled in the wellbeing program, and many are making significant changes in their lives. Corporate Responsibility Report 2014 | 15
A Great Partner in the Community Woolworths connects with millions of customers, in stores and online, each week. This, along with our more than 198,000 employees, gives us the opportunity to raise funds for, partner with, and support community groups that our customers, employees and suppliers are engaged with. Our community investment strategy and key focus areas for our business divisions help us prioritise our support and ensure that our community partnerships and investment: ·· are relevant to our core businesses ·· meet community expectations, and ·· win support from customers and employees. In 2014, we invested the equivalent of $47.6 million in our community partnerships and programs. Thank you The Salvation Army Droughts, floods, bushfires – all or some of We want to thank all our customers for their these natural disasters hit Australians and amazing support of our fundraising initiatives. New Zealanders each year. We have worked with The Salvation Army since 2010 as our official partner to respond quickly and appropriately to people needing help with 0.85% Our target food, shelter and clothing in the wake of natural disasters. We are aiming to contribute the equivalent of at least 1% of After the NSW bushfires last October, Of pre-tax profit contributed pre‑tax profit to the communities Woolworths and our customers raised to the community (excluding in which we operate. money for The Salvos’ bushfire relief appeal. funds donated by customers During the appeal, Woolworths matched and employees) customer donations dollar‑for‑dollar, raising We are doing this by supporting a total of $4,560,700. organisations, programs and initiatives in ways that are relevant to their business aims, strengths and skills. 16 | WOOLWORTHS LIMITED
In 2014, we invested the This was done through $20.9m $4.9m equivalent of $47.6m To support our community partners Our cash donation In kind $15.6m $6.2m and programs From customers and employees Employees and management time Droughts also brought out the best in We support a number of annual Woolworths’ customers, who donated fundraising events including the ‘Put your more than $350,000 to our drought appeal foot down’ walks and the ‘Best Things in for farmers in Queensland and NSW. Life’ dinners. The Avner Foundation is also We matched this dollar for dollar, and supported by Coca-Cola Amatil through also donated $250,000 in food and fuel sales of specially marked Deep Spring vouchers, so the total amount raised was water sold exclusively at Woolworths more than $950,000. supermarkets. Avner Nahmani Pancreatic This year, our CEO Grant O’Brien and Cancer Foundation senior executives participated in a Woolworths and its suppliers have 300 kilometre bike ride over three days supported the Avner Nahmani Pancreatic to raise awareness and funds for the Cancer Foundation since the passing of foundation and Tour de Cure. our much loved former colleague and the We are grateful to our suppliers for establishment of the foundation in 2008. supporting the Avner Nahmani Pancreatic The Avner Foundation is the only Cancer Foundation. foundation in Australia exclusively focused on pancreatic cancer research and seeks to break through 40 years of minimal progress by doubling the number of people who survive pancreatic cancer by 2020. Corporate Responsibility Report 2014 | 17
A Great Partner in the Community Foodbank We are working with Australia’s largest hunger relief organisation, Foodbank, to help Australians who don’t have enough to eat. During the year, we gave 1,147 tonnes of food to Foodbank, which provided 1.5 million meals. Foodbank estimates our contribution created more than $26 million worth of ‘social return on investment’. Social return goes beyond feeding people this week or this month – it is the value of the wider benefits from the services Woolworths provides. Foodbank’s research shows that providing food helps improve people’s emotional wellbeing, their self-worth and social relationships, academic achievement and general standard of living. Woolworths donations to Foodbank in 2013–14 During the year, we gave 1,147 tonnes of food to Foodbank, which provided 1.5 million meals. Foodbank estimates our contribution created more than $26 million worth of ‘social return on investment’. 1,146,890kg $26.4m 1,529,200 social return meals Food Donated NSW Vic Qld SA WA NT Tas kg 227,430 194,075 294,061 97,169 246,360 40,583 47,212 18 | WOOLWORTHS LIMITED
Earn & Learn Working with our suppliers Woolworths ran the Earn & Learn program We listen to our suppliers and work for the third time last year, delivering collaboratively with them because good “Woolworths is quite $7.2 million of educational equipment. and fair supplier relationships ensure good pragmatic and understands Across Australia 13,148 schools and services. Our customers also expect us to that they have to deliver early learning centres redeemed their deliver value and source locally. outcomes for suppliers Woolworths Earn & Learn points for new to get the outcomes In the Advantage Group’s (advantagegroup. educational equipment – in fact more than 400,000 items of new equipment were com) independent supplier survey, our Woolworths also wants to overall performance ranking improved from achieve. They understand delivered as a result of the program. fourth in 2013 to third in 2014. The survey those outcomes have to Equipment categories that were popular included more than 1,000 responses from with primary and high schools were 213 suppliers and the retailers included be sustainable.” mathematics, English and science, arts & ALDI, Coles, Foodland, FoodWorks, crafts, robotics, sport, music and dance. Metcash, Costco, SPAR, Target, Kmart, BIG W, Drake Food Markets, Harris Farm, Early learning centres redeemed their Ritchies, Priceline and Woolworths. Woolworths Earn & Learn points for equipment for younger children, including resources for arts & crafts, sand and water play, construction and sports. $7.2m Of educational equipment delivered 13,148 Schools and early learning centres redeemed their Woolworths Earn & Learn points for new educational equipment 400,000+ Items of new educational equipment were delivered Corporate Responsibility Report 2014 | 19
A Great Place to Invest Financial performance Two of our core values, ‘Every cent We have invested in many technologies $60.8bn counts’ and ‘Doing the right thing’ need to reach these savings, including: not be mutually exclusive. High standards 1. carbon dioxide refrigerants used in Corporate Responsibility can help in more than 120 Australian and Sales from continuing operations increase returns to our investors. New Zealand supermarkets up 3.9% or 5.9% on a normalised Global leader for second 2. energy-efficient refrigeration cases 52 week basis8 consecutive year with high-efficiency fans, LED lighting, For the second consecutive year, the better glass-door de-fogging, $3,775.2m Dow Jones Sustainability Indices (DJSI) and glass doors on dairy cases, lids on RobecoSAM rated Woolworths Limited as island freezers the world’s industry group leader for the 3. LED lighting in produce areas and EBIT from continuing operations food and staples retailing sector. grocery aisles before significant items9 up 3.3% or 5.3% on a normalised 52 week basis8 We are very pleased to be recognised 4. heat reclaim from refrigeration for the high sustainability standards compressors to heat stores $2,451.7m we have set and achieved. Each year, 5. improved control systems for more than 3,000 companies worldwide air‑conditioning and lighting. are invited to take part in RobecoSAM’s analysis of financially material economic, Setting high standards NPAT from continuing operations environmental and social practices. in our new stores before significant items9 up 4.2% or In June in Sydney’s Double Bay, we 6.1% on a normalised 52 week basis8 Reducing our cost opened one of Australia’s most modern of doing business supermarkets, with a walk-in cheese room, Ranked 15th in global retailing We drive for efficiency all the time and, fresh barista coffee, a pizza bar and a (based on 2012 sales revenue), the in line with our core value of ‘every cent sushi bar. highest ranking Australian retailer10 counts’, we aim not to waste energy and food. As a result, we have targets Less obvious to the customer are the to reduce energy use, refrigerant losses supermarket’s high standards in energy and food waste sent to landfill. and carbon efficiency, including those listed previously, plus LED lighting in all Since 2009, we have invested trading areas. We expect to save 110MWh approximately $112 million in energy of electricity, more than 4% of the store’s efficiency and saved an estimated annual usage, by using LED lighting for $162 million in operational costs. aisle lights, down lights, display lights and graphic panels. 8 Full year growth has been adjusted to remove the 53rd week in the 2013 financial year 9 Refer to page 35 of the 2014 Annual Report for more information 10 Deloitte, Global Powers of Retailing 2014: 20 | WOOLWORTHS LIMITED Retail Beyond begins
$114bn Return to families & impact on the Australian economy $7.3bn Paid in wages and benefits And 775,000 jobs is the indirect contribution to Australia’s economy (flow-on in economy from value of to employees sales and construction spend) $1.7bn Paid in dividends to shareholders $162m Savings from energy efficiency measures Food waste Our investors can be assured that our value of ‘Every cent counts’ extends through to the end of our supply chain, where we minimise waste. Our main target is no food waste to landfill by next year. We are doing this through avoiding waste, supporting food rescue, partnering with farmers, commercial composting and alternative waste treatment. 1. 2. 3. 4. 5. avoiding donating to working with commercial-grade alternative food waste charities Farmers compost waste treatment through efficient More than 670 two-thirds of More than 95 Australian ordering and stock australian our australian 200 australian Supermarkets sent management supermarkets supermarkets partner supermarkets more than donated with local farmers sent an estimated to collect produce 1,381t and bakery waste for 5,800t 8,700t stock feed or on-farm composting of food waste to of food Earth Power in Sydney of FOOD WASTE this diverts over and improving supply 26,000t chain efficiency Converting this to deliver fresher generating to commercial material into products to stores more than composting in fertiliser and of FOOD WASTE most states green energy and using new technology to reduce and SAVEs MORE THAN $8m wastage of items produced in-store 1.8m IN WASTE SERVICE COSTS meals Corporate Responsibility Report 2014 | 21
Australian Supermarkets and Petrol Woolworths is Australia’s largest supermarket chain, operating 931 supermarkets and 502 Woolworths-owned petrol sites across Australia. We rely on the 117,000 staff in our stores and support offices to provide our customers with superior service, range, value and convenience. Progress against objectives 1. First choice for fresh food A Great place to A Great place to · We grew our fresh market share, shop work in line with our strategy to be first choice in fresh food. In a competitive retail environment, Our supermarkets provide employment · We improved our supply chain to Woolworths is committed to providing and career opportunities for Australians provide fresher produce to our better value, a better offer and better access across all states and territories, in customers and reduce waste. for our customers. Our stores and online metropolitan and regional areas and offers allow more and more Australians across all age groups. During the year we 2. Unbeatable value to buy their favourite products at a great opened 34 (net) new stores and created · Key promotional campaigns price. We served an average of 21.1 million jobs for more than 3,200 people, including generated savings of more than customers a week, who benefited from more than 1,800 younger employees. $750 million for our customers. average price deflation (3.1%) and savings We also opened 20 new (net) petrol sites 3. Online retailing from key promotional campaigns (more during the year, creating 96 new jobs. · Woolworths Online continues to than $750 million). lead the way in the retail grocery Woolworths Petrol continues to be one of Along with value, we offer our customers and alcohol category, with 2014 online the company’s leaders in safety standards a broad range of Australian-produced sales increasing more than 40% and performance, with the lowest Lost foods in our Fresh and Own Brand offers. and over 3 million items delivered to Time Injury Frequency Rate (LTIFR) in all We are proud that 96% of our fresh fruit customers each week. of our trading divisions. and vegetables and all of our fresh meat is 4. Customer insights transforming sourced from Australian farmers. Almost our business 76% of our Own Brand grocery products · We are using data to refine our are made in Australia. store layouts and ranges to meet A Great partner in We have committed to responsible our customers’ evolving needs. the community sourcing, animal welfare and supporting 5. Innovative offer local farmers. Many of these topics are covered earlier in this report. This year, Woolworths Supermarkets · We engaged families and created contributed approximately $37.2 million to customer loyalty through our community causes and partners, including Collectables campaigns – ‘Aussie direct donations, stock, and employee and Animals’, ‘DreamWorks Heroes’ customer contributions. and ‘Jamie’s Garden’. Our supermarkets continue to be a focal point for many communities, providing opportunities for us to raise funds for causes that are important to our customers and staff. During the year, we encouraged employees in each state to nominate and support a major fundraising program for a charity of their choice. 22 | WOOLWORTHS LIMITED
$48,236m Our stores picked the following charities to support in their states: State Charity Contribution Sales 11 NSW/ACT Variety, the children’s charity $598,000 QLD Children’s Hospital Foundation $3,950,000 $3,368m EBIT11 VIC/TAS SA/NT Royal Children’s Hospital Foundation Royal Flying Doctor Service $500,000 $104,000 WA Telethon $250,000 931 Supermarkets Woolworths Earn & Learn: The Earn & Learn program ran for the third time last year, delivering $7.2 million of Jamie Oliver’s Ministry of Food: Our partnership with Jamie Oliver connected us to a fellow iconic brand that has a educational equipment to schools and strong message on eating fresh, healthy 502 early learning centres. Schools could food. With the Ministry of Food we redeem Woolworths Earn & Learn points supported the Food Revolution Day, a for resources they needed, whether for world record attempt to run the largest Woolworths owned petrol sites mathematics, science, English, art, music cooking class, where children learnt how or sports. to make a healthy dish – Jamie’s Rainbow 117,415 Salad Wrap. Taronga Zoo: Woolworths’ partnership with the Taronga Conservation Society Fresh Food Future program: With our Fresh Australia began with our three-year, Food Future program, we aim to help our Employees $1.9 million investment in the Great agriculture sector with challenges such as Southern Ocean precinct and the Fish For climate change and attracting talented people Good program. Taronga Zoo also helped to the sector. Since 2007, we have invested us with the wildly popular ‘Aussie Animals’ more than $10 million in this program, with collectable cards promotion. our trusted partners such as Landcare Australia, Royal Agricultural Society of NSW, Australian Rural Leadership Foundation, Nuffield Australia and many more. 11 Sales and EBIT are combined for Australian Food, Liquor and Petrol Corporate Responsibility Report 2014 | 23
$37m The Fresh Food Future program has two main aims: A Great place to 1. growing more with less through advancing invest Estimated savings in operating farming innovation, productivity and long- costs this year term sustainability, and One of our core values is ‘every cent 40,000t 2. n urturing talent by supporting the counts’. Maximising business efficiency next generation of farmers and and minimising waste are key ways for industry leaders. the business to reduce costs. This allows Of food waste directed from landfill, us to return savings to our customers and Since 2007, we have invested $6.6 million saving more than $8 million dividends to our shareholders. through Landcare Australia to help Australian farmers grow more with less. Investment in energy efficiency and The program has funded more than low-carbon technology has occurred 190 projects around Australia to encourage across the company, but as Australian innovation and efficiency, reduce input Supermarkets accounts for more than costs and increase productivity and 60% of our energy use, we have focused long‑term sustainability. on innovation in refrigeration, air bstreetsmart: Woolworths Petrol has conditioning and lighting. We estimate partnered with bstreetsmart to support we will save more than $37 million in road safety and responsible driving operating costs this year as a result. education. bstreetsmart is the inspiring Removing food waste from the business initiative of the trauma service at is a key target, and present opportunities Westmead Hospital, which sees a for reducing costs. Australian disproportionate number of people Supermarkets has food waste diversion aged 15 to 30 years injured through programs which have diverted more than road accidents. 40,000 tonnes of food waste from landfill, bstreetsmart promotes safe behaviour as saving more than $8 million in costs. drivers, riders and passengers to people in this age group, to cut their fatality and injury rates. Through the generosity of our customers and the support of our staff, this year we raised more than $175,000 for the program. 24 | WOOLWORTHS LIMITED
Woolworths Liquor Group Woolworths Liquor Group now has three distinct formats: Dan Murphy’s (Destination), BWS (Convenience), and The Wine Quarter (consolidates our Online and Direct offers). Progress against objectives Responsible marketing 1. Continuing to evolve Dan Murphy’s Last year, we signed the Alcohol Beverages A Great place to Advertising Code (ABAC) to formalise our · We continue to expand our footprint as shop Australia’s premier liquor destination, existing undertaking to abide by the ABAC opening 11 Dan Murphy’s. adjudication process and to ensure that DrinkWise Australia our advertising complies with the code. · Total Dan Murphy’s stores now Woolworths Liquor Group (WLG) number 186. contributes to programs run by DrinkWise, Our charter for selling alcohol has been an independent, not-for-profit organisation active for a number of years and includes 2. Developing the BWS brand and 10 principles on which we assess any that promotes healthier and safer drinking convenience offer alcoholic or alcohol-branded products through national information campaigns. · We continued to grow BWS, Australia’s before considering them for sale. These DrinkWise is founded on industry largest liquor retailer, opening 36 (net) principles send a strong message against leadership and community partnerships. new stores in the year. products that target minors or encourage · Total network now 1,216 stores. This year, the DrinkWise campaign on irresponsible drinking. ‘how to drink properly’ reached more 3. Maintaining leadership in online and than 90% of 18 to 24 year olds (see direct via The Wine Quarter howtodrinkproperly.com). The Federal · danmurphys.com.au further embedded Government audited the DrinkWise labelling its position as the premier Australian project to raise awareness about alcohol A Great place to online liquor destination, being the consumption and pregnancy. We are pleased work most visited liquor website in Australia. that the audit found high rates of compliance Online sales increased more than 55% among buyers of WLG Exclusive Brand We expanded this year, opening 11 new with a number of new features added products. WLG also includes DrinkWise’s Dan Murphy’s stores and 36 (net) new BWS to the website, including enhanced ‘Get the Facts’ pictogram on retail brand and stores, creating an estimated 300 jobs. delivery options and new customer Pinnacle product advertising. recommendation functionality. Responsible service of alcohol Australia’s drinking culture is changing Our standards for responsibly retailing 4. Increasing own and exclusive brand for the better, according to last year’s liquor go beyond regulatory compliance penetration through Pinnacle Drinks Australian Institute of Health and – all WLG staff must be trained in · We are providing customers with Welfare’s National Drug Strategy responsible service of alcohol. Staff enhanced ranges as we continue to build Household Survey. complete regular refresher training our own and exclusive brand portfolio. courses, and Woolworths’ compliance Younger Australians are continuing to delay with responsible service and licensing their first alcoholic drink. The age when is assessed in annual audits of our 1,402 they first drink alcohol rose from 14.4 to licensed outlets. 15.7 years between 1998 and 2013. Fewer 12 to 17 year olds are drinking alcohol – the Stores proportion not drinking rose from 64% to 72% between 2010 and 2013. 5,993 Employees Corporate Responsibility Report 2014 | 25
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