WOW - Woolworths Group

[Ann]

I am going to chuck in a rant as well. I never found Woolies/Safeway ever had good quality fresh vegetables as they advertised. Added to that they used to inflict that ghastly jingle on me when I was trying to shop. "we are the fresh food people....blah blah blah" This I found particularly galling as I picked through their moldy tired old beans trying to find a few worth salvaging. The majority of their stores look run down and tired. No wonder the staff are disgruntled. After all management don't seem to care, why should they? I have slowly over the years moved away from Woolies to Coles. Woolies used to have better meat, but not so anymore, Coles have really lifted their game with their meat, fish and chicken, their vegetable were always excellent. Plus I prefer the programming for Coles self serve checkout, it is a better program and quicker and you can turn off the computer's voice! BIG PLUS!


Masters! Depressing! Dark, dark dark inside, couldn't wait to leave. Can't speak about the product, I just didn't want to browse. Maybe change of colour, a nice terra cotta instead of blue outside and put bulk skylights into the roofs and put in solar panels to show the world you are green!
Bunnings, plenty of skylights plenty of brightness, need a crow bar to get me out of there.
The Masters' blue is harsh, Bunnings' green is restful.

Well I enjoyed that rant!

Now the reason I am here is to put up a chart. It is a five year monthly chart and it is showing WOW at a long term double bottom. This is generally quite a positive pattern for a chart as the stock tends to bounce up and begin a recovery phase. Let's see!

 

[sptrawler]

I am going to chuck in a rant as well. I never found Woolies/Safeway ever had good quality fresh vegetables as they advertised. Added to that they used to inflict that ghastly jingle on me when I was trying to shop. "we are the fresh food people....blah blah blah" This I found particularly galling as I picked through their moldy tired old beans trying to find a few worth salvaging. The majority of their stores look run down and tired. No wonder the staff are disgruntled. After all management don't seem to care, why should they? I have slowly over the years moved away from Woolies to Coles. Woolies used to have better meat, but not so anymore, Coles have really lifted their game with their meat, fish and chicken, their vegetable were always excellent. Plus I prefer the programming for Coles self serve checkout, it is a better program and quicker and you can turn off the computer's voice! BIG PLUS!


Masters! Depressing! Dark, dark dark inside, couldn't wait to leave. Can't speak about the product, I just didn't want to browse. Maybe change of colour, a nice terra cotta instead of blue outside and put bulk skylights into the roofs and put in solar panels to show the world you are green!
Bunnings, plenty of skylights plenty of brightness, need a crow bar to get me out of there.
The Masters' blue is harsh, Bunnings' green is restful.

Well I enjoyed that rant!

Now the reason I am here is to put up a chart. It is a five year monthly chart and it is showing WOW at a long term double bottom. This is generally quite a positive pattern for a chart as the stock tends to bounce up and begin a recovery phase. Let's see!

That's interesting, I'm in W.A Perth and find the exact opposite, Masters are light and airey, where'as Bunnings aisles are tall and narrow creating dark spaces.

Maybe because the Bunnings stores in W.A are getting old.

However I do think they are focussing on different customers, if I'm looking to replace something, new for old I'd probably go to Masters.

If I want to fix or replace something, same for same, I'd probably go to Bunnings.
It is going to take some time for Masters to gain traction, and it isn't my cup of tea, but it will probably work with the throw it out generation.IMO

It obviously is catering to the throw it out and replace it generation, whereas Bunnings is aimed at the fix it generation.

Maybe it isn't so stupid an idea, car ownership has certainly changed, no one diy's their cars anymore, except me.

 

[Ann]

That's interesting, I'm in W.A Perth and find the exact opposite, Masters are light and airey, where'as Bunnings aisles are tall and narrow creating dark spaces.

Maybe because the Bunnings stores in W.A are getting old.

That's a very interesting comment sptrawler, I wonder how the Bunnings and Masters businesses compare in WA alone?

 

[sptrawler]

That's a very interesting comment sptrawler, I wonder how the Bunnings and Masters businesses compare in WA alone?

I really don't know how they compare, good point.

I do have WES and WOW shares, so it is a a balancing act, but I am trying to stay objective.

Bunnings, prior to Wesfarmers taking them over, were hopeless, store of last resort.

Coles prior to Wesfarmers taking over were a basket case, wasn't a lot of the supply chain owned by the directors? Now look at Coles.

Maybe the problem with WOW, is there may be too many sweetheart deals going on, who knows? That is what usually happens.
I know our local Big W may as well shut down, it is useless, unless you want to buy books.

The problem is with the technological era, they usually get get exposed, ala VW.

I guess what I'm saying is, WOW can be sorted out quickly, if management wants to.

 

[Ann]

I know our local Big W may as well shut down, it is useless, unless you want to buy books.

Don't get me started on Big W!
If I want to buy cheap crap I go to Kmart, why pay twice the price for the same crap at Big W!

 

[Valued]

Woolworths knew years ago that they would be competing with Aldi on price and cutting staff to lower their prices while still maintaining growth targets. The reason that they thought they could do this was because Aldi only had like 2000 skus and Woolworths had 40,000, so they figured they only had to reduce the cost of the 2000 skus that match Aldi. The problem, I suppose, is that say Aldi has 5 skus of coffee and Woolworths has 50, if they drop the price on 5 skus to match Aldi many people will just buy those 5 skus and not the other 45, so they were basically trying to be Aldi but with far more expenses.

I always thought they should focus on customer service and the customer experience, and just charge more. Be the premium supermarket and focus on making people feel like the experience is worth it because they never have to wait and they always have the products they want, but instead they opted to compete on their weaknesses rather than maximize their strengths. I also thought they should run random rewards on their rewards card e.g. you scan it and you could win $100 off your groceries or whatever, obviously it would be a very very small chance for that to happen but it's the fact that it can happen and it introduces the same emotional response people get when entering competitions or gambling, it gives them hope and may influence their decision to shop there. People don't want to enter draws, they want instant gratification.

 

[notting]

I also thought they should run random rewards on their rewards card e.g. you scan it and you could win $100 off your groceries or whatever, obviously it would be a very very small chance for that to happen but it's the fact that it can happen and it introduces the same emotional response people get when entering competitions or gambling, it gives them hope and may influence their decision to shop there. People don't want to enter draws, they want instant gratification.

Oh Really.

Well let me tell you what they shouldn't do.

Hold you up at the till and ask you to swipe your fukcing rewards card so after spending $40,000 over 10 years you get enough points to buy a peanut. Who the fukc does not see through that loyalty rig, hook the idiot BS and be held up by it every fricken time you go there and are leaving wanting to take the till and smash it over the general managers head. That's not a smart way to treat your customers. Coles asks you something about fly byes and the deal is better, at the start, whilst you're doing something else and it feels seamless effortless. Who ever came up with WOWs rewards BS has killed a huge amount of good will for WOW.
Piss on your customer as he walks out ~ Brilliant.

Sorry but I am a little passionate about retail at times.

 

[sptrawler]

Oh Really.

Well let me tell you what they shouldn't do.

Hold you up at the till and ask you to swipe your fukcing rewards card so after spending $40,000 over 10 years you get enough points to buy a peanut. Who the fukc does not see through that loyalty rig, hook the idiot BS and be held up by it every fricken time you go there and are leaving wanting to take the till and smash it over the general managers head. That's not a smart way to treat your customers. Coles asks you something about fly byes and the deal is better, at the start, whilst you're doing something else and it feels seamless effortless. Who ever came up with WOWs rewards BS has killed a huge amount of good will for WOW.
Piss on your customer as he walks out ~ Brilliant.

Sorry but I am a little passionate about retail at times.

I'm with you, all these reward schemes are stupid, but then again I see people lining up for 4 cents off fuel.

Most normal city cars, have approx 60 litre tanks, they're not empty when the customer is buying fuel.

So lets say the person puts in 50 litres, WOW that is a $2 saving, or one and a half litres of fuel free.
It's easy to see how scammers do so well in Australia.IMO

 

[Bill M]

I'm with you, all these reward schemes are stupid, but then again I see people lining up for 4 cents off fuel.

And in many cases if those people take a small drive further they can get there fuel for 10c + per litre cheaper without a docket. Certainly can see where it's a bit of a con.

 

[Valued]

I think people want the 4c off for the principle of the thing, they feel that fuel is too expensive and so they want to get back at the big corporations. Obviously, they arn't, they are playing into the hands of these big corporations, but they don't know that. They also think on the lines of "Mr Woolworths makes too much money".

 

[Value Collector]

And in many cases if those people take a small drive further they can get there fuel for 10c + per litre cheaper without a docket. Certainly can see where it's a bit of a con.

Fuel is slightly different prices depending on the location of the station, sometimes the cheapest one will be a Woolies station other times not.

eg, the first few petrol stations near the end of the F3 motor as you enter Sydney are always more expensive than the ones a few kilometres further on, because a lot of people are going to stop at the first station they see, so the ones further on have to get a reputation of being a few cents cheaper.

So far the cheapest station I have seen in the Sydney area is a woolies, in western Sydney, Unfortunately I only go past it about once a month, but it is consistently cheaper than any other I see on my travels about 10cents per litre cheaper on LPG, and the woolies docket just makes it even cheaper, 4 cent discount works out at 7 percent discount on LPG.

 

[Ann]

Oh Really.

Well let me tell you what they shouldn't do.

Hold you up at the till and ask you to swipe your fukcing rewards card so after spending $40,000 over 10 years you get enough points to buy a peanut. Who the fukc does not see through that loyalty rig, hook the idiot BS and be held up by it every fricken time you go there and are leaving wanting to take the till and smash it over the general managers head. That's not a smart way to treat your customers. Coles asks you something about fly byes and the deal is better, at the start, whilst you're doing something else and it feels seamless effortless. Who ever came up with WOWs rewards BS has killed a huge amount of good will for WOW.
Piss on your customer as he walks out ~ Brilliant.

Sorry but I am a little passionate about retail at times.

Thank you notting, you gave me a wonderful laugh!

The old Woolies rewards cards weren't bad value, I never registered my card but just flashed the original temporary card when I found one of their special reward card discount products I needed to buy. They offered some very good savings sometimes and I got instant gratification. I never wanted their fuel offer and thought the points value was all BS so registering was no value to me.
Now as I understand it, the new reward cards have changed to 'buy the product on Rewards Special', then eventually when you accrue enough of these Reward items you are given $10 back on your shop...but you are forced to register or else you will lose your credits after a few months. I won't be signing up!

What really pisses me off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!

No doubt I will be back to bitch about something else before long, it is so much fun! :

 

[skc]

Interesting article on Woolworths...

http://www.morphicasset.com/blog/20...-82650333&mc_cid=4204190b65&mc_eid=4214979868

 

[Gringotts Bank]

What really pisses me off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!

No doubt I will be back to bitch about something else before long, it is so much fun! :

Yeh they're a bunch of c---ts. Coles are the same though.

The other day they had a glut of non-homebrand milk which wasn't selling. So they took all the homebrand milk off the shelves. I stood there for a few minutes and watched as half a dozen people bought milk costing twice the price. I asked the shelf stocker guy and he told me the delivery hadn't arrived yet. Two days running, this was the excuse. As if the different milk brands arrive in different trucks. Horsesh1t.

 

[Valued]

What really pisses me off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!

No doubt I will be back to bitch about something else before long, it is so much fun! :

That would be a genuine mistake. Supermarkets are actually quite pedantic about their planograms and having everything in the correct place. The problem is nightfill staff don't really care since their job sucks. It isn't some big conspiracy to scam customers. If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there.

 

[notting]

It's pretty amazing that Bunnings managed to increase sales by 11% during a period when it is being directly targeted by what seemed to be a genuine competitor pretty much for the first time, for some of its market share.
I was quite happy about Masters from a consumer perspective, a new toy shop and keep em honest etc.

When I first went in to a Masters it felt great and they were bending over backwards to be helpful unlike what had become a kind of a resentful staff member atmosphere at Bunnings. But it just didn't work. Bunnings have picked up the friendly/helpful game now which is about all the good that's come of it and the Masters Staff now seem like a bunch of lost souls and the stores are looking a little more hapless.

 

[sptrawler]

It's pretty amazing that Bunnings managed to increase sales by 11% during a period when it is being directly targeted by what seemed to be a genuine competitor pretty much for the first time, for some of its market share.
I was quite happy about Masters from a consumer perspective, a new toy shop and keep em honest etc.

When I first went in to a Masters it felt great and they were bending over backwards to be helpful unlike what had become a kind of a resentful staff member atmosphere at Bunnings. But it just didn't work. Bunnings have picked up the friendly/helpful game now which is about all the good that's come of it and the Masters Staff now seem like a bunch of lost souls and the stores are looking a little more hapless.

When I first went to a Masters store, I thought WTF are they trying to do, who are they focusing on?

Now that I've been there a few times, I think I can see what they are aiming at.

If I want to fix something like a tap washer or a toilet cistern, or I want to adapt something like the retic, I'd go to Bunnings every time.

If I wanted to replace something, new for old, or put in a new light fitting or anything else, I'd probably go to Masters.

Masters seems to cater to the throw it out generation, whereas Bunnings targets the fix it generation.

When I see what my middle aged kids do, maybe they aren't as stupid as everyone makes out.

 

[qldfrog]

Masters seems to cater to the throw it out generation, whereas Bunnings targets the fix it generation.

When I see what my middle aged kids do, maybe they aren't as stupid as everyone makes out.

I believe you nailed it perfectly and when you have a look at what people discard at the tip, your last sentence might be right:
for a new cloth dryer, a nice chandelier or colourfull stacking boxes, go to masters, not when you want to reuse your old bits and piece to make a chook pen

 

[Ann]

That would be a genuine mistake. Supermarkets are actually quite pedantic about their planograms and having everything in the correct place. The problem is nightfill staff don't really care since their job sucks. It isn't some big conspiracy to scam customers. If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there.

Hi Valued, I am not suggesting it would be official policy to place higher priced product over lower priced tags and I have no doubt their product planograms would be pristine as this is, as I understand it, what they use to sell product placement to suppliers. However we don't have night fillers in any of the supermarkets where I shop as the shelves are filled during the daytime which is profoundly inconvenient. They appear to have about four different items on their trolleys for shelf replenishment, so the risk of error would be minimal even for the most bored staff member.
Coles are also guilty of misleading customers, on a regular basis they have a sign stating 'mushrooms on special' at reduced price. No particular mushroom such as button mushrooms are mentioned...simply 'mushrooms' on special. Fine get to the checkout with your Portobello mushrooms and no way are they on special even though they are also classed as 'mushrooms'!

You said in your quote... "If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there." You are absolutely correct!

Have a look at the WOW chart, the price has fallen back to the price of January 2007, customers are not happy they are moving away from Woolies in droves. Not saying it is purely because of scamming their customers but every little negative will build into a giant negative and drive customers away. Like watching the guys in the fruit department slamming the bananas down into position.

I describe myself as middle of the road ordinary/average, not a front runner and I am moving away from shopping at supermarkets. I am over them and heading back to small independents with a focus on organic. Even though I am paying more per item, the quality is better and it keeps longer so there is less wastage and because it costs a lot more I am more careful not to waste. I am reducing the items I buy right across the board as the places I shop tend to only stock a limited range. I am not doing this because it is trendy and I won't be the only Mrs Average weaning themselves off supermarkets either!

 

[shouldaindex]

I keep trying to find more information about Supermarket margins, and analyse what is a sustainable level for WOW to rebase expectations at.

They are the only company in the world at 8% and I think Coles and WalMart are about 6% in no.2 position.

So they announced a -30% decline in EBITDA, which would take that 8% back to equal world best at about 6%. Nobody knows whether that is a sustainable level to then start growing revenue at, as Coles / Aldi and whoever else will compete too.

The worry is that companies like Carrefour and Tesco in Europe have been decimated (SP about -60%) from similar competition that is happening here.

So I suspect the WOW 3 year rebuild will be very eventful and a rebase of earnings will hopefully provide an opportunity when mood is at it's lowest. Then it's up to whether the turnaround succeeds to grow off this base, if not WOW could be the next Carrefour or Tesco (who are still figuring out what the answer is).