👉 Background: Woolworths is the largest supermarket across Australia, with more than 37% of total market share. Outside of the supermarket, Woolworths also owns Big W, PetStock and MyDeal. The supermarket is usually the golden goose of the overall Woolworths portfolio, but after a three week strike for its warehouse staff last November, Woolworths copped a beating.

‍👉 What happened: Woolworths warned that its first-half net profit fell by more than 20%. A large part of that profit drop is a result of its worker strike — where it struggled to get products on shelves. But, even without the strike, Woolworths’ earnings would have declined 5%. So now, Woolworths will begin a cost-cutting program across the business where it plans to cut $400 million in expenses… or the equivalent of 800,000 Maggie 2 minute noodles.

‍👉 What else: Apart from the strike, the main reason for the loss was a shift in consumer behaviour - more customers looking for specials and cross-shop across a number of different retailers. So long, farewell consumer inertia.

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‍What's the key learning?

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‍💡Consumer inertia is when shoppers stick to the same supermarket out of habit, convenience, or loyalty even if better deals are available elsewhere. In Australia, this has helped Coles and Woolies dominate for so long.

💡Research from last year shows that 81% of Aussie shoppers spend most of their grocery budget at just one supermarket and over two-thirds are staying loyal to Coles or Woolworths each month. But, Woolworths' latest results show that maybe this is starting to change.

💡In fact, Woolies’ CEO mentioned that more customers are “cross-shopping” to find the best deals…mainly due to cost of living stresses. And if this trend continues, Coles and Woolworths could face more competition, which hopefully leads to better prices and more choice for consumers.