Woolworths to shut MyDeal to curb online marketplace losses
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The news: Supermarket giant Woolworths said it intends to close its customer website MyDeal by 30 September, as part of efforts to stem losses from its online marketplace business.
The numbers: The cash cost of closure is expected to be $90 million to $100 million, including redundancies.
Non-cash costs will primarily relate to the impairment of MyDeal's assets of around $45 million.
The context: MyDeal, which was acquired by Woolworths in September 2022, is an online retail platform offering a wide range of consumer products from various sellers.
It was added to Woolworths' MarketPlus platform, which brings together the group's various online marketplaces — including Big W Market and Everyday Market — under one umbrella.
Woolworths chief executive Amanda Bardwell said the closure of MyDeal will lead to a "meaningful reduction" in Woolworths MarketPlus operating losses once completed.
What they said: "In February we said that we would assess the shape of the group portfolio to address areas where there was not a clear path to profitability or the prospect of a reasonable return on capital," said Bardwell.
"MyDeal has brought marketplace expertise and leading technology to the group's marketplace platform, Woolworths MarketPlus, enabling rapid [gross merchandise value] growth.
"However, given the intensely competitive environment and the superior economics of marketplaces integrated into retail brands, we have made the decision to close the MyDeal customer website."
The source: ASX
