mydeal

Woolworths Pulls the Plug on MyDeal: What it Means for Aussie Shoppers

Woolworths, one of Australia's largest supermarket chains, is set to close its online marketplace, MyDeal, by the end of September. This decision, announced recently, marks a significant shift in Woolworths' e-commerce strategy and raises questions about the future of online retail in Australia. The closure is expected to cost Woolworths up to $100 million, reflecting the challenges of competing in the crowded online marketplace sector.

Recent Updates: The Timeline of MyDeal's Demise

The news of MyDeal's closure has unfolded rapidly. Here's a breakdown of recent key events:

• June 27, 2025: Woolworths officially announces the closure of MyDeal, citing a need to reduce operating costs and focus on its core businesses, including Woolworths and Big W.
• Prior to June 27, 2025: Woolworths conducts an internal assessment of unprofitable and low-return areas of its operations, ultimately leading to the decision to shutter MyDeal.
• September 30, 2025: The official closure date for the MyDeal marketplace.

This decision comes just three years after Woolworths acquired a majority stake in MyDeal for $243 million, highlighting the volatile nature of the online retail landscape. The Australian Financial Review (AFR) also reported on the broader market context, noting Suncorp chair Christine McLoughlin's retirement alongside Woolworths' MyDeal announcement. The Motley Fool Australia further noted a slight dip in Woolworths shares following the announcement of the $100 million cost closure.

MyDeal's History and the Rise of Online Marketplaces in Australia

MyDeal was founded with the aim of providing Australians with a wide selection of products for the home, from furniture and homewares to appliances and technology. It positioned itself as a competitor to established online marketplaces like eBay and Amazon, offering "the best deals online."

The rise of online marketplaces in Australia has been driven by several factors:

• Convenience: Online shopping offers unparalleled convenience, allowing consumers to browse and purchase products from the comfort of their homes.
• Wider Selection: Marketplaces aggregate products from multiple sellers, providing consumers with a vast selection that is often unavailable in traditional brick-and-mortar stores.
• Competitive Pricing: The competition among sellers on marketplaces can drive down prices, benefiting consumers.

However, the online marketplace sector is also highly competitive, with established players and new entrants vying for market share. This intense competition can put pressure on margins and make it difficult for individual marketplaces to achieve sustainable profitability. Wesfarmers, a rival of Woolworths, has also shut down an online marketplace amid mounting losses, highlighting the challenges in this space.

Why Did Woolworths Decide to Close MyDeal?

Woolworths' decision to close MyDeal appears to be driven by a combination of factors:

• Cost Reduction: The closure is expected to save Woolworths up to $100 million, which can be reinvested in other parts of the business.
• Focus on Core Businesses: Woolworths wants to focus on its core businesses, including its supermarket chain and Big W, which are more profitable and have stronger growth potential.
• Intense Competition: The online marketplace sector is highly competitive, and MyDeal has struggled to gain significant market share.
• Integration Challenges: Integrating MyDeal into Woolworths' existing e-commerce operations may have proven more challenging than initially anticipated.

Woolworths intends to shift its focus to its existing online platforms, Woolworths.com.au and BigW.com.au, and to integrate the "best deals" previously found on MyDeal into the Big W Market and Everyday Market offerings. This suggests a strategy of consolidating its online presence and leveraging its existing customer base.

Immediate Effects: What Does This Mean for Customers and Sellers?

The closure of MyDeal will have several immediate effects:

• Customers: Customers will no longer be able to purchase products on the MyDeal website after September 30, 2025. Woolworths has indicated that it will honour existing orders and provide customer support during the transition. Customers who collected Everyday Rewards points on MyDeal will likely see those benefits transferred to other Woolworths platforms.
• Sellers: Sellers who currently list their products on MyDeal will need to find alternative marketplaces or e-commerce platforms to sell their goods. Woolworths will likely work with sellers to facilitate a smooth transition.
• Woolworths Shares: As noted by The Motley Fool, Woolworths shares experienced a slight slip following the announcement, reflecting investor concerns about the cost of the closure.

Future Outlook: The Future of Online Retail in Australia

The closure of MyDeal raises questions about the future of online retail in Australia. While the sector is expected to continue to grow, it is also likely to become more concentrated, with a few large players dominating the market.

Here are some potential trends to watch:

• Continued Consolidation: More consolidation in the online marketplace sector is likely, as smaller players struggle to compete with larger, more established companies.
• Focus on Niche Markets: Some online retailers may find success by focusing on niche markets or catering to specific customer segments.
• Integration of Online and Offline Channels: Retailers will increasingly need to integrate their online and offline channels to provide a seamless customer experience. This could involve offering in-store pickup for online orders, or providing personalized recommendations based on customers' online and in-store shopping history.
• Increased Use of Technology: Technology will play an increasingly important role in online retail, with retailers using artificial intelligence, machine learning, and other technologies to personalize the customer experience, optimize pricing, and improve logistics.

Woolworths' decision to close MyDeal reflects the challenges of operating in the highly competitive online marketplace sector. While the closure will result in a one-time cost of up to $100 million, Woolworths believes that it will ultimately benefit the company by allowing it to focus on its core businesses and invest in more profitable growth opportunities. The supermarket giant will now focus on expanding its Big W Market and Everyday Market platforms, aiming to capture the "best deals" aspect previously offered by MyDeal.

The closure also serves as a reminder of the importance of adapting to changing market conditions and focusing on sustainable profitability in the fast-evolving world of e-commerce. For Australian shoppers, it signals a potential shift in the online landscape, with fewer independent marketplaces and a greater emphasis on established retail brands expanding their online presence.