Will Woolworths rise from the ashes? Don’t bet on it
Is Woolworths about to roar back on to the high street? Tony Page, a former managing director of the chain, says he has approached the brand’s owner, Shop Direct, about taking it on, nearly a decade after its ignominious collapse at the cost of 27,000 jobs. Best known for its “pick ’n’ mix” sweets, there was quite the public outpouring of sorrow when the debt laden chain – in a £400m hole at the end – finally closed its doors.
Dodgy finances, and equally dodgy management, played their part in its demise, but the biggest problem faced by Woolies was that too few of those who mourned its departure ever shopped there. A decade on,
can Mr Page change that by reviving the name and format, focussing it on “neighbourhood stores” at the heart of communities rather than big out of town malls?
Let’s assume he can pull off a deal to get hold of it, and then put together a suitable financing package. You can just about see where he's coming from. Excepting the internet, the biggest growth in grocery over the past decade has been in the “convenience” sector, smaller format stores close to where people live.
These have driven the revival of another previously struggling retailer (the Co-op), and done great business for the likes of Tesco and Sainsbury's, while causing a late-to-the-party Morrisons to waste tens of millions of pounds trying to play catch up until new boss David Potts pulled the plug. If it can work for food retail, why not general retail? If you’re smart with your locations, targeting areas of high footfall, places where people might be persuaded to stop off on the way home to pick up bits and bobs, as they do now with food from their local Co-op? Who knows?
Stock things people want, at prices they’re happy to pay, and make it convenient for them and they will come! But that's the trick, isn't it. If only it were so simple. Have you spotted the flaw in Mr Page's logic yet? If the sort of retailer he's proposing were a viable proposition, then surely someone would have taken the plunge with something like it by now. Or at least quietly trialled it in a few likely locations.
But perhaps the entire retail market has simply failed to pick up on some untapped demand? If so, why does Mr Page need the Woolworths name to show 'em what they're missing? Woolworths carries with it some brand recognition, at least among shoppers of a certain age, and of course, there's the PR value. But you could easily say you're reviving the format while calling it something else and still get some coverage for your efforts.
Mr Page has come up with a nice distraction from a depressing general election campaign and perhaps we should thank him for that, if nothing else. But we don't really need to do even that, because the publicity he has generated for himself should be its own reward. After all, he’s between jobs at the moment.