As a past executive of Coles and an active industry watcher it becomes more evident every day that any turnaround of Coles will be at a huge expense.
A recent visit to Westfield’s new centre in Doncaster Victoria has a 5000m2 Coles and Woolworths in the same location one level above/below each other.
This presents an ideal situation to compare progress in each retailer compared to previous stores in similar situations.
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Coles has historically out-traded Woolworths in this location but it seems that the tables have turned. Woolworths have intensified the look and feel of their new store with many new features such as self scanning, new colour treatments. The store entrance is designed to showcase all the fresh foods and when you stand outside looking into the store you see lots of colours, large price tickets and lots of customers which create an instant perception of freshness, range and value. It is also evident that WOW has moved up another level in their store presentation and design.
Coles has two entrances but at the main entrance you notice the sterility of the white floors and the cigarette kiosk with a large sign warning all customers who enter that low tar cigarette can kill you! The store seems to have been designed in pieces compared to WOW where it all comes together as one.
Is this a sign of where Coles is heading or if not how much will it cost to retrofit stores like Doncaster that have been opening every month?
Beauty is in the eye of the beholder but my retail eye says that far from arresting any decline Coles has moved backwards and WOW has moved forward thus widening the gap between the two retailers.
Wesfarmers has claimed that they have arrested the trend in sales decline but when you consider the mess that Coles were in while rebranding BI-LO last year one would think that the poor comparative sales they announced are worse than they appear.
Nearly 30 years ago WOW was in a much worse position and lost money before they were privatised. They had Paul Simons and the benefit of a sleepy competitor in Coles who was too busy worrying about how to operate their new acquisition in Myer.
WOW today does not have any such distraction and Coles does not have Paul Simons.