That was the wonder of Woolies
Wednesday, November 26, 2008
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Is this the day that the chill winds of recession really start to hit what is left of the traditional high street?
That
the wonder of Woolworths. At 6pm tonight the
Board of Woolworths met to confirm what had long been on the cards – which the cash-strapped business, laden with over £150m of net debt was bowing to the inevitable and
heading into administration.
Deloitte, the appointed administrator must now try to find a buyer for some or all of the Woolworths chain. But the sad fact is that hundreds of stores will close and thousands of staff must face losing their jobs. The Times reports that up to 30,000 jobs are at risk if the 800 plus stores close for good. And the Telegraph suggests that a firesale of unsold stock by the administrators could prompt an aggressive price war on the high street in the run up to Christmas.
For many years Woolworths was the default choice for those of us dashing around to find confectionery for stocking fillers or perhaps pick up a cheap video, CD or DVD? But the reality is that the brand has been in a long, painful decline for a long time.
Did Woolworths ever have a sustainable competitive advantage? Probably not!
They have been squeezed by the rise of online retailers such as Play.com and Amazon, by the expansion of discount stores offering cheap sweets and toys and by the relentless march of the major supermarkets into low-priced paperbacks, pick and mix sweets and low priced household goods.
Nostalgia for the Woolworths of your teens (I admit - I used to spend many hours in Woolworths sheltering from the Yorkshire rain) is not a recipe for business survival. Especially when trade credit insurers refused to give Woolworths the finance needed to buy essential stock – they were forced to use a dwindling pile of cash. And when confidence in the retail sector has slumped to levels not seen since the early 1990s the prospects are not good.
So it is farewell to Woolworths. Goodbye to your rather tacky stores, poor lay-out and grotty selection of 3rd rate movies.
And why did you always charge for those heavy paper bags when I went in for some pick and mix …. You won’t be doing that again in a hurry.
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