By Nqobile Dludla
JOHANNESBURG, June 3 (Reuters) - Australia's David Jones
Food is exiting its pilot convenience partnership with BP
as its South African owner Woolworths Holdings seeks to
reverse a "fairly flawed" strategy that led to losses in the
Australian market.
David Jones Food entered the fast-growing convenience stores
market through a trial with petrol forecourt operator BP in
2019, betting on customers eating on the go more frequently.
In late 2020 Woolworths CEO Roy Bagattini announced a review
of David Jones Food, which resulted in the closure of three
smaller format food stores this year.
These stores were loss-making, Bagattini told an investor
conference call late on Wednesday.
"We're well into the process of exiting the trial that was
initiated with BP," he added. "The result here is that we're
going to convert the David Jones food losses to a breakeven
position certainly within our next financial year."
The partnership with BP spanned 35 locations in the states
of Victoria and New South Wales.
Bagattini, who took over as CEO of fashion and food retailer
Woolworths in 2020, is trying to improve David Jones'
performance.
His predecessor Ian Moir paid a premium to bulk up in
Australia in the hope of turning the company into a leading
southern hemisphere retailer.
But an expensive long restructuring at a time of aggressive
online competition has not seen the business "transition fast
enough," Bagattini said last September.
"Being very candid, I think our strategy for food with David
Jones in Australia was unfortunately fairly flawed from the
outset and a sort of cut and paste from South Africa was never
really going to be a solution there," he said.
Asked whether he will exit the David Jones food business, he
said he expected the company to stay in food, but to run it
differently, with changes including a concession model and
increased focus on longer shelf-life categories.
"We're only going to be playing the game in the way that
allows for food to be accretive going forward," he said.
(Reporting by Nqobile Dludla; editing by Barbara Lewis)