Woolworths, the renowned Australian supermarket chain, has announced its decision to shutter its online retail marketplace, MyDeal, resulting in an estimated financial hit of $100 million. This strategic move aims to consolidate its online offerings under its more prominent brands, namely Big W and Everyday Market. The decision comes in light of the intense competition in the online retail space, particularly from global giants such as Amazon and Temu, which have posed significant challenges for MyDeal since Woolworths acquired an 80 percent stake in the company.

Founded in 2011 by entrepreneur Sean Senvirtne, MyDeal was known for its variety of home and lifestyle products. In September 2022, Woolworths purchased the majority stake in the company for $218 million, retaining Senvirtne as CEO and allowing him to keep nearly 20 percent of the business, which reportedly earned him approximately $77 million from the deal. However, despite having over a million active customers at the time of acquisition, MyDeal struggled to maintain its competitive edge as international competitors gained traction.

Woolworths Group's Chief Executive Amanda Bardwell elaborated on the company’s rationale behind the closure. She emphasized that the decision stems from recognizing the benefits of having a unified online retail strategy under well-established brands, stating, “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.” This indicates a shift in focus towards enhancing the profitability of its existing platforms.

The closure of MyDeal will lead to some redundancies among its staff, though Woolworths has assured that many employees will be retained as the company looks to expand its other online offerings. The closure is anticipated to be completed by September 30, a timeline that aligns with the broader strategic objectives of the Woolworths Group. This move follows a similar decision earlier this year by Wesfarmers, which also dissolved its MyDeal rival, Catch, as the landscape of online retail continues to evolve rapidly.

As Woolworths forges ahead, the company aims to leverage its existing platforms to streamline operations and enhance profitability while navigating the complexities of a challenging retail environment.