Comparison between Westpac and Woolworths Companies’

Comparison Between Westpac-service and Woolworths -Retail

1.0 Introduction

There are three main types of business which is service business, retail business, manufacturing business. This report will only focus on retail and service types of business. Westpac and Woolworths are the 2 major businesses in Australia. Westpac operate as the banking service business while Woolworths is a supermarket retail business. Not only are the companies outstanding businesses in Australia, but both companies are also the largest; bank and supermarket in New Zealand respectively. In terms of Woolworths retail business, their website is mainly for customer shopping online while Westpac’s website provide adverse information about the services offered such as some kind of cards that the company has produced, their loan, interest rate and the insurance information. Both businesses also provide their annual financial report in 2016.

This report aims at examining the individual company; compare the differences of the service and retail business’s nature, and emphasis on the financial statement in 2016 of the Westpac and Woolworths companies

1.2 Scope

This report will analyse the background and the financial statement of Woolworths and Westpac companies.

2.0 Service Business (Westpac)-Nature of Service Business

Westpac, which is one of the largest banking service businesses in Australia and New Zealand, has more than 1000 offices and efficient online service system. However, their scope is quite large; as it not only covers all the location in Australia and New Zealand, but also allows their customer make their transfer over many countries conveniently and efficiently. There are many services which are provided by Westpac Banking business. In generally, the banking company provides the service about the banking system which generally includes card, loan, deposit, withdraw. These are the basic service in any banking business. In particularly, Westpac provide other extra services; for example, “Emergency cash” which allow a customer to withdraw their cash when they lose their debit card, “Westpac Live Online Banking” help customer easily manage their finances, they also provide the currency information and travel insurance tips in the “travel centre”. Westpac organize their service by separating the personal user and business user. In terms of personal user, Westpac provide the personal loans, home loans, bank & saving accounts, insurance, credit cards, superannuation, international & travel and share trading. The difference in the business purpose is business loans and merchant services.

Westpac design their structure based on their vital client segments which include 5 divisions namely:  Business Bank, Consumer Bank, Westpac New Zealand, BT Financial Group and Westpac Institutional Bank. According to the Westpac website, there are approximately 13 million customers who are served through these 5 divisions. The advantages of these structures are unique collection of brands, steady performance indicators, and clear accountability for the end to end customer experience.

2.1 Market Share in the Industry

Westpac has continuously reported interim profits over the years. Each year Westpac meets the customer’s needs which has led to an increment in its market share of 30% annually (Westpac Group Annual Report, 2016).The step up in the Australian market share has led the bank providing over 355,000 mortgages annually. Further, customer deposits increased by 9% in the year 2016. The rise in customer deposits has been as a result of a reduction in the bank fees which has significantly benefited retailers and general business customers in Australia as well as New Zealand. However, in 2016, Westpac reported a decline in cash earnings of $7822 million which was a drop compared to the previous financial year 2015 (Westpac Group Annual Report, 2016). Additionally, Westpac assets are worth $840 billion, which generate a return of less than 1% annually. Despite Economic challenges that faced Australia in 2016, Westpac remains to have the largest share in the market in the banking industry.

2.2 Transaction Records of Westpac

Westpac reorganizes services revenue under a number of transactions. Westpac financial group has the mandate of designing different brands and creating the banks financial products so as to enable the customers meets financial goals. Westpac provides finances to individual customers and businesses ranging from SME’s, commercial as well as agribusiness. The loans are given on interest rates which provide revenue to the bank. The bank also distributes investment through the wealth administration platforms. Additionally, Westpac customers are also provided with mortgage services whereby they acquire houses at affordable prices while the payments are done in instalments.

The transaction provides revenue to the bank through the interest rates. Sale of insurance is also a revenue generating product where the bank provides life and general insurance among other types of insurance policies. Other transactions done by the bank are sale shares and provision of dividends which provide earnings. Further, non interest income where the bank partially sells its investment has been a key source of revenue to the company (Westpac Group Annual Report, 2016).Therefore, the major earning drivers for Westpac are lending, customer deposits, non interest incomes and markets and treasury income.

2.3 Main Components in Annual Report

The annual report of Westpac begins by highlighting the banks financial performance of the company for that particular year. The performance highlights, describes the general gains and losses of the company. The highlight is followed by the chairman’s and CEO’s report who give information on the banks business strategy. Further, the report describes all the financial statements of that particular and companies them with the previous years’ financial statements. The annual report also provides an overview of service leadership, workforce revolution which outlays the employees remuneration, digital transformation which identifies the steps that the bank ought to make so as to maintain its dominance in the market. The financial statements provide a comprehensive analysis of the earning drivers which include: net interest income and non- net interest income, treasury incomes, expenses and impairment charges. The statements also include asset quality and capital liquidity (Westpac Group Annual Report, 2016). The outcome and performance of the bank is later analysed in an Economic perspective.

2.4 Note of the Annual Report

Westpac website contains all the information regarding the bank. Corporate governance statement and other documents are usually available in the Westpac corporate governance. The website is usually updated regularly and summarizes all the principles and policies governing the bank. All investor communications and Sustainability reports are found in Westpac investor Center. General share holders meetings are held annually whereby the AGM is webcast and can be viewed later by members through the website. Shareholders are also communicated on market briefings, via ASX announcements or through publications of calendars of events which are available in the company’s website. Additionally, Westpac advertises notices regarding meetings or events through the social media which creates a vast means of communication to shareholders. The company also produces journals to reach out to the public.

3.0 Retail Business (Woolworths)-Nature of the Retail Business

Woolworths (proprietary) Limited which «are all classified as non-specialist or ‘mixed’ retailer» (Varley, 2001), is a retail chain of stores that sells home products, food, merchandise with many brand name as well as their own brand name in Australia and New Zealand. Woolworths operate with
approximately over 3,279 stores in Australia and New Zealand.The company is divided into 5 main segments mainly: food, liquor and petrol which is provided in Australia; New Zealand supermarkets; general merchandise; home improvement and hotels.

There are some key products available in Woolworths such as food product, liquor, petrol, general merchandise, and home improvement products. Woolworths set their strategy purpose as “focused on having customers put us 1st«. Specifically, they are divided into 6 levels in the companies’ strategy which is fix the business foundations; deliver on core customer offer-good prices, great service, best fresh; create the future- renew program; and top level is «customer 1st team and culture» (, 2017).Woolworths’s director believes that Australian’s largest retail chain can increase their market share, while raising price higher than their competitor. In 2011, Woolworths earned 6.6% before interest and tax to sales margins (Mitchell, 2012). In 2013, Woolworths’s share increased from 1.23 billion per share to 1.64 billion per share (Theunissen, 2013).

3.1 Transaction of Woolworth

Large retailers such as the Woolworths reorganise their transactions through various ways in order to generate revenue. The major form of transaction in Woolworth Company is the sale of products to customers in a superior way, considering value as well as convenience. Woolworths make purchases of the best farm products such as fresh fruits, vegetables and which are sourced from Australian farmers. The company has retained a sustainable momentum in the sales of the food as branding progresses with affordable prices. Australian food and petrol is also part of Woolworths’ operations through which the company makes profits.

Online shopping and use of credit cards has attracted many customers hence increasing the companies’ sales which reciprocate to revenues. Home improvement is also another revenue generating product which involves transaction between the home timber suppliers and the company. Home timber is a price investment and competitive in the market. Further, the company also provide dividends and earnings from shares which assist the company in its finances and hence the sales become part of investment.

3.2 Main Components in Annual Report

Woolworths annual report briefly highlights the performance of the company in a particular year .In this section, annual revenue is described and both the chairman and the managing director give an overview report of all proceedings of that financial year and the major issues that arose in that year, in accordance to the financial report. The report further describes the trading performance of Woolworth businesses mainly: The Australian Food and Petrol, New Zealand foods, Portfolio business BIGW and the hotels. The trading performance is done by use of balance sheets and cash flows. Financial reports and auditors reports area incorporated, which describe major financial statements. Finally, the report gives a performance summary five years through which the company determines its growth rate in revenue earnings. The annual report also provides a corporate governance report and shareholder information.

3.3 Note of the Annual Report

Woolworths provides shareholders information as well as a Corporate Governance Statement in their annual report. Annual general meetings are held at the end of a financial where the shareholders discuss on the performance of the business. Correspondences are also done through Computer share investors via their website “”. A corporate governance statement is also found at the company’s website which is easily accessible to the shareholders. All the information discussed in general meetings, sales reports and earning reports are readily available at the company’s webcasts. However, in order to access the information an individual’s credentials are required for security purposes. Investor news is also available at Woolworth’s group ASX website. In order to reach out to the public the company publishes journals annually which contain information on the products offered, the companies investment plans and goals. The company also holds conferences whereby the shareholders interact with other business partners.

4.0 Comparison of Two Business Types

The two companies are similar in that both companies have substantial shares in their relevant markets as they are Australian leading companies. Both companies generate annual reports whose components evaluate the general performance of each company. Additionally, both companies are managed by Board of directors. Both companies provide online services and they do have a press release annually.

4.1 The Differences between the Two Companies

The two companies exhibit major differences as follows: Westpac is a service business while Woolworth is a retail business. Further, Westpac website provides information on loans, interest rates and insurance while Woolworth website provides information to the customers mainly on shopping online.

5.0 Conclusion

From the above report, both companies have dominated in the market in their respective type of business operation. Aiming at providing efficient and quality services and products are key factors to the success of the business as this leads to customer satisfaction hence maintaining and attracting new customers. Additionally, both companies produce financial and audit reports which are beneficial in assessing the performance of the business so as to lay down the strategies accordingly. The companies take substantial effort in advertising their products and services online through their websites which is a convenient source of information to the customers.

Despite the difference in the type of business, both of them are equally important as the retail business; Woolworth may require finances for expansion from Westpac Company. On the other hand, Woolworth is equally important as it provides consumable products. However, Woolworth is more advantageous than Westpac in that due to the nature of the products sold, the company is less affected by the business cycle in the economy, unlike the Westpac in the financial sector which is adversely affected during recession in the business cycle. Further, Woolworths has diversified in the nature of products hence more advantageous than Westpac which fully concentrated on provision of financial services.


Mitchell, S 2012, ‘Woolworths: Margins Are Safe’, MMR, vol. 29, no. 13, pp. 31-32.

Theunissen, G 2013, ‘Destination Woolies’, Finweek, pp. 24-25.

Varley, R 2001, ‘chapter one: product management in a retail business’, Retail Product Management, pp. 4-18.

Westpac Group Annual Report(2016).Proudly supporting Australia Finanacial Reports-Woolworth Group.[online] Available at : [Accessed 29 May 2017]. (2017). Strategy and objectives — Woolworths Group. [online] Available at: [Accessed 29 May 2017].