Woolworths Group has closed its hotels business indefinitely and will delay the demerger of its Endeavour Group business until 2021, following the impact of the COVID-19 pandemic on its business.
The Woolworths Group board said the specific date was subject to ongoing review and made the decision “given the impact of the government directive to close hotels for an extended period and current financial market conditions”.
Woolworths announced plans to combine its drinks and hospitality ventures, Endeavour Drinks and ALH Group, in July 2019, with the restructure approved in December by shareholders.
The company also acquired Shorty's Liquor in January to sit under the Endeavour Drinks portfolio of brands, where the new business would be known as Endeavour Group. Its proposed leadership team was also announced in January.
“In line with the Federal Government’s directive, Woolworths Group’s Hotels business has been closed until further notice. Our teams are working to redeploy as many impacted team members as possible to other Group businesses," Woolworths Group CEO Brad Banducci said.
In terms of Woolworths’ projected results, current sales performance, changes in customer shopping patterns – including pantry stocking – and the closure of the hotels business for an extended period, have all been cited as reasons for the company to be unable to “accurately forecast the net impact of COVID-19 on the financial year 2020 results”.
The company said: “The Group’s cash flows are being managed efficiently, and payments to the team and suppliers are being made on time. Where appropriate, suppliers are being supported with shorter payment terms and early payments.
“As this period of shutdown continues, both discretionary spend and capital expenditure will be reviewed with adjustments made as required.”
Earlier today (24 March), the Australian Competition and Consumer Commission (ACCC) granted interim authorisation for supermarkets to be able to coordinate immediately to ensure consumers have reliable and fair access to groceries during the COVID-19 pandemic.
It allows supermarkets to coordinate with each other when working with manufacturers, suppliers, and transport and logistics providers.
