Woolworths: the 1924 Sydney upstart that swallowed Australian grocery

There is a photograph I keep coming back to. It shows the original Woolworths Stupendous Bargain Basement — yes, that was the actual trading name — on Pitt Street, Sydney, circa 1924. The shopfront is modest, the signage is hand-painted, and the whole operation occupies a space that a modern Woolworths Express would dwarf. And yet from that one basement, a company grew that would eventually account for roughly a third of all grocery spending in Australia. It is, by any measure, one of the more remarkable trajectories in the country's commercial history.

Worth saying up front: the Australian Woolworths has no ownership connection to the old F.W. Woolworth variety-store chains that operated in the United States and the United Kingdom. The name was borrowed — reportedly after a principal in the founding group admired the American chain's brand recognition — but the companies were legally and operationally separate from the start. It is a distinction that has confused people for a century and will probably continue to do so.

The Pitt Street basement, 1924

The company was founded in late 1924 by a small syndicate that included Percy Christmas, Stanley Chatterton, George Creed, Ernest Williams, and Reuben Orkin. They were not household names then and are barely remembered now, which is a shame — they were genuinely canny operators. The first store opened on the ground and basement levels of what had been the Imperial Arcade on Pitt Street, Sydney, in the area that is now near the corner of Market Street. It sold general merchandise: haberdashery, hosiery, smallwares. The "stupendous bargain" pitch was unashamedly populist, aimed squarely at working Sydney.

Within a few years the company had floated on the Sydney Stock Exchange and was expanding into other states. The model at this stage had nothing to do with groceries. It was a variety retailer — closer in spirit to a Kmart or a Woolworths of the non-food kind than to the supermarket chain most Australians know today. Food would come later, and the pivot, when it arrived, would change everything.

The shift to food and the supermarket era

The transition toward grocery retail happened gradually through the mid-twentieth century as self-service supermarkets replaced the old counter-service model. Woolworths began converting its stores and acquiring food operations from roughly the 1950s and 1960s onward. It was not the only player — Coles had been building its own retail empire since its founding in Collingwood in 1914, and a number of regional chains competed vigorously in their home markets.

What Woolworths understood, probably earlier than most, was that the supermarket format required scale to drive the kind of buying power that made the economics work. Bigger volumes meant better supplier terms meant lower shelf prices meant more customers meant bigger volumes. The flywheel logic of grocery retail is simple to describe and brutally hard to sustain without capital and logistics. Woolworths invested in both.

By the 1980s, the company was one of the two dominant forces in Australian grocery alongside Coles, and the duopoly was beginning to look structural rather than merely circumstantial. The smaller regional chains — Franklins, Action, Bi-Lo, and others — competed hard in their patches, but they were fighting from progressively weaker ground. Franklins, which at its peak was a genuine third force in the market, was ultimately broken up and absorbed in the early 2000s, with Woolworths picking up a significant portion of the stores.

The Woolworths-Coles duopoly: how it hardened

There is a word that Australian food and grocery suppliers have used for years to describe the market structure: "duopoly". By the 2000s and into the 2010s, Woolworths and Coles together controlled somewhere in the range of 70 to 80 per cent of packaged grocery sales, depending on which category you measured. That kind of concentration is unusual even by international standards.

The Australian Competition and Consumer Commission (ACCC) conducted multiple inquiries into the sector across this period. The ACCC's 2008 grocery inquiry found that the major chains exercised substantial bargaining power over suppliers, though it stopped short of recommending structural remedies at that time. A subsequent Senate inquiry in the mid-2010s heard extensive evidence from suppliers about trading terms, payment delays, and what several witnesses described as pressure to fund promotional activity. The ACCC returned to the sector again and again, including a significant market study completed in 2025 that examined pricing practices and the relationship between retail prices and the input costs paid to suppliers and farmers. That study found instances where retail grocery prices had not fallen in line with declining wholesale costs.

Woolworths consistently contested the stronger characterisations of supplier mistreatment. But the political heat around supermarket pricing — which ran hot particularly through the cost-of-living pressures of the early 2020s — produced something the company's founders in that Pitt Street basement could scarcely have imagined: a genuine, sustained national debate about whether the duopoly structure itself was the problem.

The own-brand expansion

One of the more significant strategic moves of the modern era was the aggressive expansion of private-label or own-brand products. Woolworths' "Homebrand" range, introduced in the late 1970s, was an early iteration — basic packaging, lower price points, clear positioning as a budget alternative to national brands. Over the following decades the own-brand strategy became considerably more sophisticated. The "Select" range and later the "Macro" health-foods range positioned private label not just as cheaper but as aspirational.

Suppliers noticed. When a supermarket chain's own-brand product competes directly with a national brand on the same shelf, the negotiating dynamic shifts. The chain is simultaneously a customer and a competitor. I'd argue this tension — which is common to major retailers globally — has never been satisfactorily resolved in the Australian context, and the ACCC inquiries reflect that ongoing discomfort.

The Woolworths of everything: diversification and the bits that didn't stick

Woolworths has not limited itself to grocery. Over the decades it has moved in and out of hardware (the Dick Smith electronics acquisition and eventual sale, the ill-fated Masters Home Improvement joint venture with Lowe's, which was wound up in 2016 after absorbing losses widely reported to be in the hundreds of millions), petrol retailing, financial services, and liquor. The liquor portfolio — BWS and Dan Murphy's, operating under the Endeavour Group banner — became a major business in its own right and was eventually separated as a separately listed entity in 2021.

The Masters hardware adventure is worth a moment's attention, if only because it illustrates the limits of retail scale as a transferable advantage. The theory was sensible enough: Bunnings, which is owned by Wesfarmers (the same company that owns Coles), had dominated hardware in a way that mirrored the grocery duopoly. Woolworths figured its logistics capability and capital could fund a challenger. Masters opened its first store in Braybrook, Victoria, in 2011 and eventually grew to around 60 stores. It never cracked the Bunnings stranglehold. The stores were wound up in 2016 and the properties sold or leased out. It was, fairly bluntly, a very expensive lesson in the difference between grocery duopoly power and actual competitive advantage in a new category.

The logo, the name, and a brief identity crisis

Brand historians — and I will admit a professional bias here — tend to enjoy Woolworths' visual identity journey more than most people do. The "W" mark that the company has used in various forms is one of the most widely recognised logos in Australian retail. The green colour palette that became standard through the 1980s and 1990s was a deliberate warmth signal, softening what might otherwise read as pure corporate scale. The 2008 rebrand, which introduced a stylised "W" formed from what the designers described as a fresh leaf, was intended to emphasise the fresh-food positioning. It attracted the usual online mockery — some observers saw something other than a leaf — but the mark has proven durable.

More consequential than the logo was the 2017 decision to formally retire the "Woolworths the Fresh Food People" slogan that had run since 1987. That tagline had done genuine work over three decades. Its retirement marked a shift in how the company wanted to be perceived: less narrowly about fresh food, more about everyday value. Whether that repositioning has landed is an open question, honestly, given how much of the recent public conversation has focused on price rather than freshness.

For more on how Australian brands have managed — or mismanaged — their visual identities over long periods, the Iconic Brand Histories section is worth your time. And if the Woolworths story prompts you to think about other Australian institutions built on humble origins, the story of Vegemite: the full story of Australia's most unlikely national icon covers similar ground from a different angle — a product that became woven into national identity almost by accident.

Where Woolworths sits now

Today Woolworths Group operates several hundred supermarkets across Australia and New Zealand, employs tens of thousands of people, and generates annual revenues that place it among the largest companies listed on the ASX. It is, by most measures, a success story of genuinely impressive proportions.

But the political and regulatory environment it operates in has changed markedly. The ACCC's appetite for scrutiny has grown. Federal parliament has shown, across multiple inquiries, that it regards the supermarket duopoly as a public-interest matter rather than a purely commercial one. And Australian consumers, squeezed by inflation through the early 2020s, formed views about supermarket pricing that are not easily shifted by advertising.

A company that started in a bargain basement on Pitt Street, selling hosiery to working Sydney, now finds itself at the centre of a national debate about market power, food security, and the cost of living. Percy Christmas and his co-founders could not have anticipated any of that. But then, neither could they have anticipated that the name they borrowed from an American five-and-dime chain would become one of the most recognised words in the Australian language. The history of Woolworths is, in that sense, a very Australian story: practical, a bit cheeky, and considerably larger than it originally appeared.

— Doug Kirby, Brands & Business Heritage