The End of Pick and Mix as we know it

November 27, 2008 at 3:18 pm · Filed under Uncategorized

Please don’t say you are surprised that Woollies has finally bitten the dust, as least in its present form. For years it has lacked a distinct image or brand identity. In that respect and in these complex retail times it was inevitable.

Its downfall has been a long time in the making. It has been in the leaves for many years.  What I struggle to understand is the logic of reinventing the wheel so many times without realising the game is up. The Big W, Woolworth’s Local and the Big Red Book were resource heavy ideas that generated little to revenue and nothing to the brand. Woolies never had the resource to compete with the likes of Tesco / Littlewoods. Hence why it was squeezed until all life was extinguished.

There was a time when Woolworths was indeed a “national institution” (the words of Yvette Cooper last night, long after the instituiton had died). There was a time when it had a super size format known as Woolco, a real department store in the true sense of the word. There was a time when going to Woolies was an enjoyable retail event. Even buying a CD in Woolies these days feels a little grubby, a desperate act, not an enjoyable event. Don`t we just go to the Woolies Local when everything else is shut or we remeber at the last minute that it is someones birthday? Better retail experiences exist. It is not enough to sell reaminder DVDs, selection boxes and some stationery. Othere stores are there that sell these things better.

A while ago Woolies was struggling because of stock outs  –  missing stock lines. Any retailer knows that if the shopper arrives expecting to find a kettle on the shelf and that kettle is not there then the shopper will go elsewhere AND will most likely not come back again – ever. Woolies forgot this rule.

Goodwill; difficult to measure, incredibly difficult if not impossible to recover.

Aldi and Lidl sell cheap and prosper – how come? Because the stores have distinct strategies that they stick too. They do not have a problem in selling a wide range of goods in a warehouse style format cheaply. Pile them high flog them low – it works. It does so because we as buyers know what we are buying into. In the downturn those European grocers are actully picking up business as wealthier buyers smell the value for money. Hard cash is better than reward points or bogofs. Sainsburys may well feel the impact of this.

Aldi/Lidl may well be interested in hoovering up some of the Woolies stores. Most are in good high street locations where A and L do not necessarily have a presence. The business is available for £1 + £350m in debt. That debt will need servicing - a cash rich entity with growth plans may well see the advantage of stepping into the breach.

Do not be surprised if the retail bloodbath really begins in the new year. Carpet sellers / kitchen sellers / bathroom sellers  - – look out for the inevitable adverts on boxing day if not before – - will struggle and may fall on the recession sword quicker than most. It will happen.

You know things are really bad if John Lewis bring forward their “Clearance” to before Christmas.

Never heard of before.

It`s a downturn but not as we know it.

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