Paul (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} fremantlebiz) wrote,@ 2007-11-08 08:24:00 |
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At last, the Coles great decline might be over
Yesterday Coles shareholders approved the takeover of the national supermarket chain by Wesfarmers, which also runs the national Bunnings chain of hardware stores. Wesfarmers are a Western Australian company. As minor Coles shareholders my wife and I have watched these takeover proceedings with interest. Over the past few months we've received in the mail numerous documents which in effect told us we were on a freight train, and there were no first class seats for little people.
Our shareholding originated from the days when by buying 500 of the things for two or three dollars one became entitled to a shareholder's discount card. These were great because they provided a few percent off every purchase and Coles, Myer, Target, Kmart, and any of the other divisions of the old Coles-Myer group.
Then came along a new management team led by a bloke named Fletcher, who had previously been in charge of a freight company. He boasted that he had rarely been in a supermarket, but that shouldn't be a barrier to success. I thought he came across as if he had the mentality of a used-car salesman.
The new management practices turned out to be a disaster. The shareholder's discount card was deemed to be cutting into profits. In their arrogance they whittled away at the discounts on offer until there was nothing, and so they destroyed the enormous base of customer loyalty. Blind Freddy could have seen what was happening - shoppers had no reason to hand about and started taking their custom elsewhere, including to the main national opposition chain, Woolworths.
In an effort to plug the profit leaks, the senior management of Coles decided that a terrific strategy would be to source produce cheaply overseas and have it packaged with their own brand. This too has been a disaster. Despite their assurances that their own brands are high quality, we wouldn't touch them with a barge pole. Even our usually non-fussy pets wouldn't eat their "generic" dog and cat food.
Over time we have witnessed an enormous quantity of familiar Australian brands vanish from the Coles shelves to be replaced by foreign rubbish. In contrast, Woolworths, although they have their own generic brands, still seem to have all the old favourites, and a genuine desire to accommodate Australian food manufacturers. The much greater variety on Woolworths shelves also seems much more imaginative than on Coles shelves.
At our local store in Melville we've been saddened to see it steadily decline. It used to have a great instore bakery, but that succumbed to a management decision. The fruit and veg section tries to maintain a standard, but its expensive, like twice the price we can buy fresher at several shops elsewhere.
The deli section used to be a very busy place, but not any more, especially in the fresh chicken and fish areas. These days there is much less on offer and the customers seem to have abandoned the deli section as a shopping option in droves.
As for the shopping trolleys, those at the Bicton Coles store are now the worst of any retail outlet within several kilometres. Even the small vegie shops and IGA shops are superior, with brand new fleets of the things. Coles management seemed to adopt the view that customers actually like their filthy trolleys with square wheels.
Oh, and the old Coles Myer team stuffed up the Myer department stores too, so much that they had to be hived off. Sadly, that decision didn't bring about any improvement in Coles or Myer.
So with the Wesfarmers/Bunnings takeover now confirmed, hopefully things at our local Coles store can only get better. I've heard on the grapevine that there is to be a major pruning at management level, probably starting from today.
As for how we'll fare as minor shareholders, that remains to be seen. There is a complex formula which the Wesfarmers people devised for their offer which will result in a small cash payout and a parcel of Bunnings shares. The figures are uncertain.
What would make us happy would be for the new management team to reintroduce a shareholders discount scheme to regenerate all that lost customer loyalty. After all, Bunnings do it for their staff.
© MMVII Paul R. Weaver.
About the writer
Check out each month's subject index on the Calendar Page for my "common-man" monologues about survival in 21st century Australia – plus a little history occasionally. An original essay is added most days as part of an undertaking to write a couple of million words.
Yesterday Coles shareholders approved the takeover of the national supermarket chain by Wesfarmers, which also runs the national Bunnings chain of hardware stores. Wesfarmers are a Western Australian company. As minor Coles shareholders my wife and I have watched these takeover proceedings with interest. Over the past few months we've received in the mail numerous documents which in effect told us we were on a freight train, and there were no first class seats for little people.
Our shareholding originated from the days when by buying 500 of the things for two or three dollars one became entitled to a shareholder's discount card. These were great because they provided a few percent off every purchase and Coles, Myer, Target, Kmart, and any of the other divisions of the old Coles-Myer group.
Then came along a new management team led by a bloke named Fletcher, who had previously been in charge of a freight company. He boasted that he had rarely been in a supermarket, but that shouldn't be a barrier to success. I thought he came across as if he had the mentality of a used-car salesman.
The new management practices turned out to be a disaster. The shareholder's discount card was deemed to be cutting into profits. In their arrogance they whittled away at the discounts on offer until there was nothing, and so they destroyed the enormous base of customer loyalty. Blind Freddy could have seen what was happening - shoppers had no reason to hand about and started taking their custom elsewhere, including to the main national opposition chain, Woolworths.
In an effort to plug the profit leaks, the senior management of Coles decided that a terrific strategy would be to source produce cheaply overseas and have it packaged with their own brand. This too has been a disaster. Despite their assurances that their own brands are high quality, we wouldn't touch them with a barge pole. Even our usually non-fussy pets wouldn't eat their "generic" dog and cat food.
Over time we have witnessed an enormous quantity of familiar Australian brands vanish from the Coles shelves to be replaced by foreign rubbish. In contrast, Woolworths, although they have their own generic brands, still seem to have all the old favourites, and a genuine desire to accommodate Australian food manufacturers. The much greater variety on Woolworths shelves also seems much more imaginative than on Coles shelves.
At our local store in Melville we've been saddened to see it steadily decline. It used to have a great instore bakery, but that succumbed to a management decision. The fruit and veg section tries to maintain a standard, but its expensive, like twice the price we can buy fresher at several shops elsewhere.
The deli section used to be a very busy place, but not any more, especially in the fresh chicken and fish areas. These days there is much less on offer and the customers seem to have abandoned the deli section as a shopping option in droves.
As for the shopping trolleys, those at the Bicton Coles store are now the worst of any retail outlet within several kilometres. Even the small vegie shops and IGA shops are superior, with brand new fleets of the things. Coles management seemed to adopt the view that customers actually like their filthy trolleys with square wheels.
Oh, and the old Coles Myer team stuffed up the Myer department stores too, so much that they had to be hived off. Sadly, that decision didn't bring about any improvement in Coles or Myer.
So with the Wesfarmers/Bunnings takeover now confirmed, hopefully things at our local Coles store can only get better. I've heard on the grapevine that there is to be a major pruning at management level, probably starting from today.
As for how we'll fare as minor shareholders, that remains to be seen. There is a complex formula which the Wesfarmers people devised for their offer which will result in a small cash payout and a parcel of Bunnings shares. The figures are uncertain.
What would make us happy would be for the new management team to reintroduce a shareholders discount scheme to regenerate all that lost customer loyalty. After all, Bunnings do it for their staff.
© MMVII Paul R. Weaver.
About the writer
Check out each month's subject index on the Calendar Page for my "common-man" monologues about survival in 21st century Australia – plus a little history occasionally. An original essay is added most days as part of an undertaking to write a couple of million words.
