QUERYING WOOLIES’ STRATEGY
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.