Is the Woolworths Limited share price set to rise?
Woolworth invested in pricing ahead of their peers: Woolworths Limited (ASX: WOW) have well positioned itself to leverage the recovering retail sentiment in Australia as compared to its peers. As per the Australian Bureau of Statistics, the Retail sales in Australia have risen for a second straight month in May 2017, showing hopes of a recovery in consumer sentiment. Retail spending enhanced by a seasonally adjusted 0.6 per cent during the month to $26.08 billion, which is better than the market expectations of a modest 0.2 per cent rise. In April the retail spending increased 1.0 per cent, which was the biggest jump in monthly spending in two-and-a-half years. The group is well positioned to leverage from this recovering retail spending as they have already invested more than $1.5 billion to decrease prices as well as deliver superior in-store experience to consumers. This give an edge to Woolworths whose turnaround is faster than expected against their major competitor Coles, as per the recent survey conducted by UBS. Even though Coles is also investing in lower prices and on in-store experience, Woolworths had a better march, while Coles need to wait till Christmas to get those benefits. UBS survey showed that the group reported improvements across all 26 subcategories which enhanced their overall score by 0.5 points to 6.7 (out of 10). This performance was better than Coles for the first time since August 2012. Meanwhile, Wesfarmers is also trying to revamp their growth and reported that they tripled their investment to over $200 million, net of cost savings, for decreasing prices and enhance in-store experience in the second half.
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