QUERY­ING WOOLIES’ STRAT­EGY

Finweek English Edition - - FEEDBACK -

Hi Garth I have in­deed of­ten won­dered why the white bread shelves at my lo­cal Woolies are empty any­time from 16:00. And I can hon­estly say that I ex­pe­ri­ence many neg­a­tive emo­tions when I’m faced with an empty shelf.

I have read Ian Moir’s state­ment from Fin­week 28 Fe­bru­ary ( Ever won­der why the shelves in Woolies are empty?) many times try­ing to f ig­ure out what he means! Would you be able to ex­plain “It’s clear to the cus­tomer, it’s clear to us and it’s what drives avail­abil­ity.” I only need an ex­pla­na­tion from “it’s clear to us” be­cause as a cus­tomer it is clear to me that Woolies is in­ept at al­lo­cat­ing the cor­rect amount of stock to its stores. It drives me to get my pur­chases from a store that I can rely on for a daily ba­sic food such as bread at any trad­ing time. How does it “drive avail­abil­ity”?

Since Ian Moir is able to put a pos­i­tive spin on empty shelves, I too am go­ing to open my mind and try a pos­i­tive ap­proach by re­peat­ing the words “It’s ac­tu­ally sound re­tail pol­icy” as I stare at Ac­cord­ing to the trad­ing up­date, the head­line earn­ings per share will come in at be­tween 20c and 25c. This puts the share on an earn­ings mul­ti­ple of be­tween 8 and 10 times, which looks at­trac­tive. The Diesel Power con­tract in the Congo ap­pears to be a nice chunky piece of rev­enue and sug­gests a good re­la­tion­ship be­tween Build­max and Exxaro, which is en­cour­ag­ing for fu­ture busi­ness. The busi­ness has re­struc­tured, it is look­ing leaner, win­ning size­able con­tracts, and I am pre­pared to keep money down on this com­pany for a turn­around.

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