Why shoppers turned on Woolies

18 Jun, 2015 05:59 AM
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Croydon Park resident Lidia Bonanno says she avoids Woolworths and shops at Coles and Aldi. Photo: Edwina Pickles.
I don't like mega companies, I like to spread my shopping around. I don't like any of them
Croydon Park resident Lidia Bonanno says she avoids Woolworths and shops at Coles and Aldi. Photo: Edwina Pickles.

CROYDON Park resident Lidia Bonanno was always a Woolworths shopper but has turned her back on the supermarket giant.

The mother-of-two now shops at Aldi for essentials and Coles for extras in a routine that she believes saves her family $100 each week.

"It's definitely about the price. What I can't get from Aldi I get from Coles," Ms Bonanno, 38, says toting a small trolley through Ashfield Mall where she could choose from all three of the big supermarket chains.

Like many shoppers to whom Fairfax Media spoke, Ms Bonanno was sharply guided by the prices on offer.

"I think its much cheaper than just buying it all at Woolies."

Woolworths has unsuccessfully battled poor food and grocery sales and on Wednesday chief executive Grant O'Brien paid the price, announcing his resignation after less than four years in the job.

Consumer advocates and retail experts say a string of public relations disasters, refreshed competition and unease about the supermarket's dominance have all contributed to shoppers turning their back on Woolworths.

Tough year

Retail expert Gary Mortimer, a senior marketing lecturer at the Queensland University of Technology, said Woolworths had experienced a tough year.

The failed Anzac fresh food campaign, embarrassing breach of customer data and poorly received new website had put the supermarket in "bad books" with shoppers, Mr Mortimer said.

He also said Woolworths' key competitor Coles had won customers through store refurbishments that added a "bit more theatre" to shopping.

"I suspect what's happened is strategic inertia. The Woolworths business has become so big, so large that its very difficult to remain agile, to be able to move and shift your brand and range and price," he said.

"They have now played for the last few years a catch-up game waiting for Coles to make a move and then replicating it. That's not a very good long-term strategy."

Other Ashfield Mall shoppers seemed most concerned about price.

Several shoppers, like Ms Bonanno, said they would buy goods from more than one supermarket doing a single visit to the mall.

"I shop at all of them and get different things from each. I think Aldi is the cheapest, second best is Coles for value and then last is Woolworths," Strathfield resident Ethel Cossutta said on her way into Coles.

"I don't like mega companies, I like to spread my shopping around. I don't like any of them," said Greg Hattona musician from Summer Hill.

Voting with their wallets

Woolworths sales have been deteriorating with German discount supermarket Aldi and a refreshed Coles nabbing market share.

Choice spokesman Tom Godfrey said consumers were clearly voting with their wallet but Woolworths would be able to win customers back with better prices.

Choice's Consumer Pulse Survey in March showed that 75 per cent of Australians were concerned about grocery expenses and value for money was a top priority. A market price survey released this month showed that shoppers could save about 50 per cent on their weekly bill by foregoing leading brands at Coles and Woolworths.

Consumer advocate Christopher Zinn said Woolworths needed to be more proactive in providing benefits for consumers, such as having better instore layout and food labelling. He said consumers wanted value for money not just 'cheap cheap'.

"The thing is that Woolworths is so big, so dominant, so entrenched and so "in our face" that it gave the challengers a chance to say they offered something different," Mr Zinn said.

"It just shows that it actually is the consumer who rules and really (Grant O'Brien) was not able to convince enough consumers they had a great offer."

A Woolworths market update on Wednesday said the Woolworths Group was going through significant strategic change to win back customers.

"Australian Food is on a three-year journey to get customers to put us first consistently and our sales results will be volatile in the short term," Mr O'Brien said in the update. "It will take time for the improvements we have made to convert into sales momentum."

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READER COMMENTS

dogsbody
18/06/2015 7:03:39 AM

Ripping off everyone from farm gate to plate and along with Coles keeping fuel prices high with their "discount" dockets.
gary from gawler
18/06/2015 7:10:13 AM

Hardly been in a Woolies for years. They are more expensive than Coles and Foodland. I try to use Foodland stores where I can - they are locally owned and do a better job of stocking local produce.
ex farmer
18/06/2015 7:49:57 AM

No surprises there and probably more pain for Woolies yet to come with Masters continually going backwards, a handy break for Wesfarmers. I haven't seen an Aldi store in WA yet but I am sure they are lurking just over the border. In the metro area I shop at farmers markets for fruit and veg then my local IGA, they are the best. There is always 6 plus friendly (local) staff on the checkouts not a line of self serve machines that bid you farewell with thank you for shopping at ...................
Makka
18/06/2015 8:46:39 AM

I abhor the business practices of large corporations and do all I can to avoid supporting ANY.
CQ
18/06/2015 11:57:07 AM

Woolworths are their own worst enemy. Their quasi specials are dearer than quality alternatives and this is best illustrated in the meat department. Beef in particular is always a very pale pink (meaning it's young or yearling meat) and 40-50 days grain fed guarantees it tastes like cardboard. I can buy high quality MSA certified meat from places like Super Butcher once a month, have it sliced to my liking and cryovac'd far cheaper than lesser quality Woolworths meat. Even Woollies budget meat is expensive. BBQ Sausages at Super Butcher are $4.99 every day & $3.99 on special.
Percy
18/06/2015 12:05:28 PM

IGA is Independent Groceries Association so support the privately owned businesses. Besides they give a great discount to seniors and will give as much as fuel stations as a discount on fuel dockets produces at the checkout Add to that a rewards card!
Kanzi
18/06/2015 12:17:41 PM

Sounds like consumers will learn the hard way. If they rush to Aldi, Woolies will close stores and slowly control of their shopping will be in the hands of one of the richest German families on earth. Their super fund, which likely has shares in Woolies, will pay the price and Aldi globally is known for being a ruthless player, which makes our two look like kid's stuff. So learn the hard way, Australia will lose, as we commonly do. I'll stick to locally owned companies, thank you.
GPM
18/06/2015 1:04:48 PM

Come on in Lidl, costco, IGA and any other company that will look after there suppliers, customers and Staff I read in discuss that the boss of wollies is leaving with $50 odd million pay out But his last job is to sack 1200 worker for his errors We now reward poor performance He said that he had lost direction that what woolies customers want I like many others are embarrassed at what they (Wollie & Coles as a company)are doing to Australians all for the mighty dollar
Bushfire Blonde
18/06/2015 5:36:35 PM

Haven't Woolworths been having this come for a long while.
stockman
18/06/2015 5:57:21 PM

We ceased shopping at Woolworths when they decided to pre-pack deli products.Fortunately we have Aldi,Coles and IGA. We can buy most of our needs at Aldi and save money.
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