"Has Project Refresh in your opinion got some more legs to...

"Has Project Refresh in your opinion got some more legs to further achieve optimal levels of inventory and JIT distribution?"


Project Refresh started in 1999 and was supposed to be completed in 2008 with an objective to deliver a cummulative $6.9 billion savings in CODB.

As of the end of 2006 :

CODB as %of sales : 1999 23.95% - 2006 20.47%

Think about that.
On Current Annual Sales of $45 billion WOW's Cost of Doing Business has been reduced by $1.6 billion.

If WOW wanted, all of that $1.6 billion could have flown right through to their bottom line (pre-tax profit).
But they dont do that.
They also need to smash Coles.
So they reduce prices.

Gross Profit Margin as % Sales : 1999 27.03% - 2006 20.47%

I dont have to tell you that WOW have handed back to shoppers (through lower prices) more money than Costello has given in tax cuts.

Has all that prevented WOW from increasing profits? No

EBIT Margin % Sales : 1999 3.08% 2006 4.56%.

Bottom line: WOW are making 50% more profit from every dollar of sales compared to 1999 despite the fact that they have reduced their mark-up margin (and delivered lower prices to consumers).

And they are not finished yet. They continue to improve. Thats why Coles got smashed and whoever takes then over has a mountain to climb.