A Report on Sustainability Challenges and Practices at Woolworths

This report provides an overview of the sustainability challenges faced by Woolworths, an Australian supermarket chain, and the practices it employs to address these challenges. The report identifies economic challenges such as inflation and recession impacting profit margins, social challenges including consumer behavior and high prices, and environmental challenges related to paper products and resource consumption. Woolworths' practices to mitigate these challenges include improving supply chain collaboration, focusing on savings and stock management, introducing projects to reduce energy consumption and waste, and fostering a positive company culture. The report recommends further improvements such as implementing a recycling program, shifting to natural gas appliances, and increasing investment in CSR activities to enhance social responsibility and consumer relations. Desklib provides access to this assignment and many other solved assignments for students.

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Contents
Introduction................................................................................................................................2
Sustainability Challenges...........................................................................................................2
Economic Challenges.............................................................................................................2
Social challenges....................................................................................................................3
Environmental challenge........................................................................................................4
Practices.....................................................................................................................................4
Recommendation........................................................................................................................6
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
Sustainability refers to an ability to maintain an ecological balance at a certain rate. It
is a balanced approach to economic activity, social benefit and the environmental
sustainability. It is a positive contribution towards the society in which the people operates. It
is a process which balances the fashion and exploitation of resources. Sustainability
development fulfils the requirement of the present without harm to the needs of the future
generation (Sánchez, 2015). The company uses natural resources to manufacture the
products; it is the responsibility of the company to maintain the resources for future
generation. There are many challenges which are faced by the companies through the creation
of value, employment, and the development of social value of the products.
In this report, Woolworths has been taken into consideration to analyse the
sustainability challenges faced by the company. Woolworths is an Australian Supermarket
store which is owned by Woolworths Limited, it was founded in 1924. Woolworths operates
in many things such as groceries, magazines, DVDs, household products, health and beauty
products, baby supplies and many other products. It has 1000 stores across Australia in which
976 supermarkets and 19 stores. Woolworths also operates online with the name of “Home
Shop” (Woolworths Group, 2018). In this report, Woolworth’s sustainability challenges have
been discussed. After that, the practices will be discussed which are used by the company to
reduce the challenges. At the end of the report recommendations to reduce the challenges will
be discussed.
Sustainability Challenges
Economic Challenges
Economic sustainability is the support of long-term economic growth without any
negative impact on future resources. Economic challenges are faced by the company due to

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adopting the changes in the business to meet the current conditions. It means; the company
faces the period of inflation, deflation, recession and other economic factors (Carson,
Thomas, & Hecht, 2015). Woolworths faces the economic downturn in the market when the
company sets its targets. The company profit margin is down in clothing business because it
spends a lot on wages and excessive promotional activities. Inflation and Recession are the
challenges which are faced by the company. In the recession period, the prices of the product
went down due to decreasing demand. Woolworths has to decrease its prices at the time of
low demand or to provide the services at the low prices due to which the company suffers
loss. The inflation rate has a direct impact on the daily routine expenses of the consumers.
The cost of living increases, then the demand for employees for the wages also increases.
High wages demand is a challenge to the management of Woolworths to prevent a decline in
profits. It reduces the consumers’ confidence and consumers spending (Woolworths Group,
2018).
Social challenges
Social Sustainability refers to identifying and managing the impacts; whether it has
the positive or negative impact on people. It is the responsibility of the company to maintain
the relationship with the stakeholders (Schiele, Ellis, Ebig, Henke, & Kull, 2015). It has been
seen that the company directly or indirectly affected by the relationship between employees,
workers in the value chain, local and customer communities. Groceries continue to be a
challenge for the company; due to lack of product innovation the consumer demand towards
the fresh food is not fulfilled by the company (Woolworths Group, 2018). It is a major issue
which creates the conflict between the consumers and the company. Consumer behaviour is a
social challenge which is face by Woolworth. High prices are also a challenge which is faced
by the company. The traditional food of Australia is Red meat which consumes high cost and
the selling price of a meat is also high which is not affordable for many people (Cusumano,

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Kahl, & Suarez, 2015). Due to the high cost, the company lost many consumers; thus it can
be said that the high cost is also a challenge which let down the goodwill of the company
among the society it serves.
Environmental challenge
The rates of renewable resources, pollution creation, and non-renewable resource are
necessary to maintain because if it is not continuously maintained then it is not in the position
of sustainability. Woolworths sells grocery products and many other items in which there are
many products which harm the environment (Dunlap, & Mertig, 2014). Woolworth’s tissue
and paper products are environmentally responsible even though it is imported from
Indonesia. Although the company sells environmentally safe products but tissue and paper
products are claimed as the non-environmental product of the company. It is claimed that
paper products are non-environmental because it is made with the tree. There are many trees
that are cut for producing papers thus it is a non-environmental product. The company faces
the challenges just because of some products not for all. As the population increases, the
demand of the consumer is changing with the generation the company. It is very difficult for
the company to meet the requirement of all age of members; the population is also a
challenge for the company (Harper, Harper, & Snowden, 2017).
Practices
The company tries to work hard to resolve these issues with the following ways that
have been discussed below:
Improve collaboration
To maintain the relationship with the consumers, the company focuses on improving
the supply chain. To improve the supply chain, it is necessary for the company to build the
relationship with the suppliers (Yawar, & Seuring, 2017). The company working with Pollen

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consulting group on improving its supplier relation; it helps the company to maintain the
consumer relationship with the company due to low prices. Low prices attract the consumers
towards the goods and services of the company. It can be said that the company can easily
build strong social relations and always keep the companies ahead (Hörisch, Johnson, &
Schaltegger, 2015).
Savings
The company faces the challenge of high wages rate due to which the company
suffers loss. To reduce these issues the company focuses on the improvement of stock. The
company starts saving and maintain the reserves for the future use or for the more inflow of
the stock. Relationship with supplier helps the company to maintain the low cost and the
supply at the higher price of the product. The company improves its funded price investments
to improve the gross margin of the company. Savings helps the company at the time of
inflation and deflation. The company uses these funds and savings for the new assets that
increase the productivity (Woolworths Group, 2018).
Introduce Projects
The company introduces the innovative changes over 3100 stores to reduce the energy
uses and make environment better. The company takes the comprehensive action to reduce
the environmental effect and becomes the sustainable retailer. Woolworths reduce the carbon
emission by establishing the projected growth. The company is continuously looking for
innovative and commercially realistic solutions to reduce the environmental footprint. The
company invests in new technologies which reduce the energy usage, water, and waste usage.
It has opened new stores with the sustainable design and reduces the 25% reduction in
emission per square meter (Woolworths Group, 2018). These changes help the company to
build the strong relationship with the environment. To build the goodwill of the company; it

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uses the natural gas instead of electrical appliances to reduce the energy consumption. From
the above analysis, it has been seen that the company uses green bags for supplying the
product. It almost saves the 500 plastic shopping bags each year by using the green bags
those can be easily recyclable (Woolworths Group, 2018). The company re-uses these bags
for bin liners or for other uses.
Culture
The company faces the high wage rate due to the weak relationship with the
stakeholders. It is the responsibility of the company to maintain good relationship with the
employees. Woolworths has developed the inclusive environment where the employees feel
free. Culture is a source to maintain the strong relations between the employees and the
customer. The company makes the company culture which builds the good relation with
employees and customers too. To maintain the good relationship with the customers; the
company easily resolve the challenges of high wage rate (Woolworths Group, 2018).
Recommendation
Although the company reduces the sustainability challenges still it has to introduce
some new changes from which the company can protect the environment and save the
product for the future generation.
Re-cycle process
It has been seen that the company sells tissues and paper product which is not good
for the environment. Paper product is announced as non-environmental product thus, the
company has to focus on this challenge. The company has to adopt the re-cycle process to
resolve the issues. Recycle bin product helps the company to re-use the product in further
work after re-cycling them. The company gains the advantage of this process by re-cycling

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the wastage product such as plastic bags, paper products, and many others. Re-cycled paper
reduces the greenhouse gas emission that can contribute to climate change by avoiding
emission. Recycling paper also reduces energy and water consumption. It saves water that
would be a most beneficial for the society to save the water for future use or for many other
purposes. The recycling process saves almost 7000 gallons of water and 3.3 cubic yards of
landfill space (Bao, Zhang, Lin, Zhang, Zhang, & He, 2018).
Shift to natural gas
There are appliances from which the company spend the huge amount on electricity.
The company’s gross profit is reduced due to a large number of expenses (Kaytez,
Taplamacioglu, Cam, & Hardalac, 2015). The company has to use the natural gas appliances
to save the energy for the future generation. If the company uses natural gas appliances for
manufacturing the product; it can save enough energy from which the American home can
easily consume gas for 6 months. Thus, the company has to use natural gas instead of using
the electrical appliances; it can help the company to save the power for the future. It is
observed that the natural gas is not harmful to the society but more energy consumption is not
sustainable for the society (Carroll, 2014). The company has the responsibility to spread the
awareness for less consumption, for this the company has to sell natural gas product instead
of an electrical product. It can also save the electricity by implementing the solar system in
the company which reduces the consumption as well as the expenses of the company. By
saving the money from these expenses; it can use this money during inflation, deflation
period (Steinhorst, Klöckner, & Matthies, 2015). It can also provide the high wages to
employees from which they get satisfied and give their best towards the organization
activities.
CSR activities

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As per the government rule, it is the responsibility of the company to maintain the
reserve of 2% of profit for the social activity. To maintain the social relationship with the
consumers, the company has to spend more on the social services (Motiwal, Yadav, Chawla,
& Mehendale, 2018). The company has to be aware about the market prices so that it can sell
the product at the competitive selling prices. The company has to maintain good relation with
suppliers which will help it by providing a discount and raw material at lower prices. It has to
deal in bulk products so that the cost of a single product is less and its selling price is high.
From this, the company can earn high profit but the company maintains the selling prices
according to the market prices. The company sells the product at the lower prices as
compared to the other companies to attract the customer or discounted prices to the poor
people so that they can easily afford (Orel, & Kara, 2014). These are the ways the company
can maintain the relationship with the consumers and reduce the challenge of consumer
behaviour.
Conclusion
From the above analysis, it has been concluded that Woolworths is a supermarket that
sells many products. To achieve the objective and goal the company faced the sustainability
challenges such as economic, social and environmental. The company takes many steps to
reduce these challenges. It has developed the inclusive culture which helps the company to
maintain the strong relationship with the employees and the other stakeholders. The company
opens green stores with sustainable design. Although the company takes the right steps to
resolve economic, social and environmental issues it has to take more steps towards the social
responsibility or the expenses of the company. By implementing the recommendation; it can
be said that the company will achieve the high growth in the market and it can be the world
largest supermarket with the higher goodwill.

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References
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Motiwal, A., Yadav, B., Chawla, C., & Mehendale, S. (2018). Impact of CSR on Company
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https://www.woolworthsgroup.com.au/page/about-us
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