Cheap Cheap and you’re gone. Woolworths separated from its chief marketing officer yesterday, Tony Phillips — and his replacement will be the fifth in the last four years, leading some analysts to wonder if there is something terminal at the retailer when it comes to selling itself to customers. Phillips helped bring back the old “Fresh Food People” branding for Woolies (which still doesn’t go far enough in convincing clients that its food is indeed fresh, let alone well-priced), and the “Cheap Cheap” price campaign (using the Rockin’ Robin tune) to counter Coles’ Down Down campaign (using Status Quo).
Mumbrella last week pointed the finger at a clash between Phillips and the new head of supermarkets at Woolies, Brad Banducci: “Banducci is keen to put a greater emphasis on the customer experience, leaving the two senior executives at odds as to the future direction of the company.” So what about the price-cuts campaign that CEO Grant O’Brien keeps talking about and is in the processing of sacking 800 people to pay for? Perhaps Woolies might pause and consider news coming from giant US retailer, Target (which reports its first quarter earnings this week, along with Walmart).
According to US media reports, Target has told foods giant such as Kraft, Campbell Soup, General Mills, Kellogg’s and others that the retailer plans to cut spending on advertising products such as canned soup, packaged cereals, boxed pasta and cheese and packaged and processed foods generally in favour of pushing fresher foods — such as oils, sauces, and cereals such as muesli and granola. The message for Woolies is that even though it has brought back the Fresh Food People branding, it could go down the Target route of actively de-emphasising the marketing of packaged food as a whole, and earn more cred with shoppers, as well as cutting prices to take on Coles’ image as being cheaper than Woolies. — Glenn Dyer
Tony Abbott’s Chinese soulmates. The Abbott government has made a big song and dance about cutting red tape and claiming over a billion dollars in savings — much of that sum being unverifiable, except by the government. Last week’s budget also featured hundreds of millions of dollars in cost-cuts and other claimed reductions in spending in the public service. It’s a form of creative accounting of the highest quality. In China, it emerged late last week there’s a similar view. The State Council, China’s cabinet, cancelled all non-administrative reviews to cut red tape and inject market vitality. The news was released in a statement in the name of Premier Li Keqiang. The State Council announcement aid it would remove 48 non-administrative review items and move another 84 items into an internal review category.
“As of today, the category of non-administrative review and approval no longer exists,” read the statement urging further streamlining. “Fighting red tape has taken on extra urgency as growth slows and the economy is steered away from an unsustainable model powered by state investment toward one driven by private consumption and services.” Tony Abbott or Joe Hockey (or his assistant, Josh Frydenberg) couldn’t have put it any better. Cutting red tape in a country that used to be known pejoratively as “Red China” seems to be one of those coals-to-Newcastle stories, doesn’t it? — Glenn Dyer
Making Tony Abbott look wimpish. UK Chancellor of the Exchequer and would-be PM George Osborne is aiming to cut up to 100,000 jobs from the UK civil service in the next five years of the Cameron government, after cutting 90,000 in the last five years. The Financial Times reports that these plans will be unveiled in the budget on July 8 in a speech by the Chancellor. The FT said numbers are: 10 billion pounds of civil service cuts by 2017-18 — a third of the 30 billion pounds in spending cuts needed to bring the deficit back into balance. Much of the rest involves cracking down on tax avoidance (by Google, etc) — in other words, a magic pudding approach so beloved by the Abbott government in last week’s budget. The Cameron government has committed itself to cutting spending, but also increasing it in “protected” areas such as pensions, health and cutting taxes. The areas for the chop include courts, police, culture, local government and transport. And this is a government struggling to build a new runaway at a major airport near London, and with grandiose plans to spend up to 50 billion pounds on a high-speed rail (and trains) project linking London and Birmingham. — Glenn Dyer
Greek heroics. Left-wing members of the ruling Syriza government in Greece have posted a defiant stand against any compromise with the country’s creditors, urging a crazy mixture of defiance on any reforms, default and leaving the euro, according to reports in European media this morning. It is said to be the first time that the hardline left-wing core of Syriza have publicly voiced their opposition to any deal. Of course, they ignore the downside from default and leaving the euro, and they also ignore that the left-wing and centrist parties, such as the Socialists, are as responsible for Greece’s current problems as anyone. The emergence of the left-wing into the public spotlight at the weekend came as it has become clear Greece is running out of time to keep its head above water, financially speaking. A government spokesman said public service wages and pensions will be paid this month, but beyond that a bailout deal is needed, tonight, if possible. — Glenn Dyer