WOOLWORTHS REAPING BENEFITS OF COST CUTS

ARTHUR HAGOPIAN

SYDNEY, Australia (FNS) -- Woolworths here, Australia's leading supermarket chain, said it is just beginning to reap the benefits of cost reductions from its Project Refresh initiative aimed at revitalizing its supply chain and inventory management, buying and marketing.

John Dahlsen, Woolworths chairman, said the initiative is expected to result in annual savings of more than $60 million within three years, surpassing the original forecast of $50 million.

"We approach the new financial year with a sense of exhilaration and excitement," Dahlsen said.

"Our core businesses are responding well to the management team and to the focus on delivering value to both our customers and shareholders," he added.

He hinted that the company, which employs over 125,000 people across Australia, will be looking to expand further.

As the benefits of the company's new focus are increasingly being harvested, "we are now able to turn more of our attention to growing the total business by new initiatives and by acquisitions," Dahlsen said.

Group managing director Roger Corbett noted that sales last year had grown 8.3%, faster than the industry average.

Twenty-six new supermarkets opened during the year, bringing the company total to 585. Total trading area grew by 4%, and comparable sales were up 4.8%.

"The year ahead will present new challenges and opportunities" for all our Australian States, despite the continued legislative restrictions on trading hours in several "which hinder both economic growth and ignore consumer demands for more convenience and more choice in their shopping," said Corbett.

He noted that the impact of both the millennium bug and the new goods and services tax were now successfully behind the company.