We never went to Woolies but we’ll miss it
What a shame Woolworth has gone bust. What a shame we never went there. Perhaps the two facts are connected?
We’ll remember this as the ‘Woolies recession’ because the first victim is so high profile. (A high street bank collapse would have been more memorable but there is a conspiracy to conceal just how close we came to a really big name banker going bust – probably taking the others with it.)
But in fact, the recession is hardly to blame for Woolworth’s insolvency. It has been a company without a point for as long as most would-be customers can remember. That’s why they stopped going. Constant changes to the product mix and market position failed to find a winning formula. Electricals and paint went out, DVDs and confectionery came in but someone else always did it better.
Anyone who did make a visit – usually a distress purchase like desperately needing an electrical adaptor or two No 3 screws – found that, while Woolies used to sell it (which is why they went), that line was no longer on sale.
So a stores chain that made only small profits in the boom times - £30m on £3bn of sales – was bound to be hit when trade turned down. Traditionally retailers go bust after Christmas when they have liquidated their stock but cannot afford the rent on the December quarter day. That Woolies ran out of cash before Christmas shows just how bad the situation is, but this is 30-year decline, not a short-term cycle.
Perhaps sometimes it is kind simply to admit that a concept that seemed a good idea 99 years ago is now dead. Woolies did that by diversifying into distribution rather than retail.
However, the point of the insolvency process is that it is possible for a new Woolworth to emerge. It is still an iconic name and, despite the revolving door of new management in past years, there may yet be someone out there who thinks they have the formula to make Woolies work.
But whoever takes it on in January starts at the worst time of year in one of the worst possible years. Most people will wish a new owner well - and most people will continue to shun the shops.
November 27th, 2008 at 11:35 am
You have nailed it with this posting.
Shopping in Woolworths was always a confusing prospect - often I found myself wondering what kind of a store is this? It offered a bit of everything and nothing at the same time. It simply failed to find a niche on the high street.
November 29th, 2008 at 4:10 pm
I think the really interesting contrast is with M&S. Okay, so in recent months Woolworths share has clearly been a basket case, but before that it was a trodden down share with a huge brand recognition, similar to Marks and Spencers a few years ago.
The difference was people could believe M&S could be saved, whether by Rose or Philip Green, whereas the values Woolworths stood for just weren’t, well, valuable, in the modern high street.
It’d take a retail genius and a lot of luck to reinvent Woolworths now.