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November 8, 2007
I see that Coles has finally been taken over by Wesfarmers. Around 99% of Coles shareholders voted in favour of the $20 billion takeover. They hope that Wesfarmers' strategy to entice more people through the door and to buy more goods on each trip will work. They need to lift their game as the appearance of the store I shop at in Adelaide CBD is grubby, there are many out-of-stock items and the service is poor.
Coles has struggled after several years of declining service levels at its supermarkets, the bungling of the restructure of Myer, and the botched conversion of the Bi-Lo stores to the Coles brand. Not that the John Fletcher management team was willing to take responsibility for the fall in market share to Woolworths, and the destruction of shareholder value. He's too busy blaming others for the woes.
The maxim, bad boards equals bad business, doesn't apply to Fletcher apparently. He pointed the finger at the equity raider Kohlberg Kravis Roberts--they were the problem. They caused instability. Coles are being taken over six years after embarking on grand plans to lift the company's performance. They could no longer go it alone.
Woolworths, meanwhile, goes from strength to strength, as it moves to increase market share at the expense of Coles. They will try to persuade us to buy more fresh food from Woolworths. Well I won't be persuaded. Their fresh food is far from fresh, its expensive and its quality is poor.
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Gary,
I agree with you on the Coles Woollies comparison. Service is garbage at both.
Since Australia agreed to import American meat, and fruit and veg from any supermarket is the taste and texture equivalent of warm water, we pay the extra to shop for fresh food at the local small butcher and green grocer.
Somebody told me Bunnings is moving into supermarkets. Is that true?
The whole planet will belong to one great megacorporation in the not too far distant future. Though I was pleased Telstra shareholders voted down a pay rise for management yesterday.