Farewell to Woolies and a retail fallacy

Sonoo%20SinghIt is never easy saying goodbye and certainly not to something that has been a part of our lives and almost a part of tradition. But everything must come to an end, and therefore with a heavy heart it is time to say farewell.

Time to say goodbye to a high street institution that was once Woolworths. Once the store of choice, the 99-year-old blast from our childhood days, went into administration last week. So understandably the obituaries that have poured in for Woolies have been more than nostalgic and quite regretful.

Once a viable business, the existence of Woolies, however, has always defied logic and reason— with its ill-sorted miscellaneous collection of pick ’n’ mix sweets; pots and pans; CDs and toys. But more so in recent times, when it simply lumbered along almost oblivious to the intense competition from the likes of Tesco, which not only did not have the ginormous rent bills to pay (unlike Woolies, which has sold off the majority of its property portfolio) but was also able to feed the rot by buying CDs and DVDs from Woolworths’ entertainment business, Entertainment UK, and then undercutting Woolies on price.

Woolies, on its part, failed to evolve with the fast changing needs of consumers. It failed to represent price – Poundland offers cheaper alternatives; or convenience – it disappoints every time with its grubby and unsightly pile ’em high aisles; and quality was never a word invented for the once-iconic retailer.

But the Christmas spirit will not only be lost on Woolies. With more retail failures, including MFI which also went into administration last week, expected on the high street in this so called festive season, Tesco sales figures this week are also distinctly lacking cheer.

The mighty retailer has reported its slowest sales growth in almost 15 years, rising just 2% in the three months to November 22,with the slowdown attributed to increased demand for its discounted lines. Though a significant slowdown for Tesco, it was not only doom and gloom. Total sales grew 11.7%, helped by a strong sales growth of 28.1% for its overseas stores. But what does stand out is the decline in the retailer’s non-food like-for-like sales for the quarter, which includes clothing, electrical and entertainment products.

As Mintel retail analyst Richard Perks points out: “It points to the fallacy that consumers will trade down on non-food items, as they don’t need to shop for those items from a food retailer.” Or even buy non-food items from the same store where they get their groceries from. For bargain hunters the likes of fashion-conscious Primark, the value-driven Aldi or the convenience of buying online from the likes of Amazon, is obviously the answer. But it might just be worth popping into Woolies to rummage for that one last bargain and to bid adieu to happy memories.

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