Monster stalks our streets

A RAPACIOUS monster stalks the wilderness of Australian retailing; a bloated and greedy hydra which has already seriously damaged two industry sectors for its own pleasure and profit.

If this predator is not brought to its knees now the independent retail sector is as good as doomed.

The monster is Woolworths. In yet another predatory grab to fill its bloated maw the giant of reduced competition is attempting to engulf the hardware industry.

This must not happen. Woolworths' entry into any area of retail is as destructive as that of Wal-Mart, and its behaviour equally suspect.

Allow Woolworths to purchase listed hardware chain Danks Holdings, bringing American Lowe's Co into the market, and the days of the independent hardware store are numbered.

If you doubt this, review for yourselves the history of Woolworths' takeovers and market intrusions.

The purchase of petrol stations by the big two reduced competition, destroyed many independent retailers, forced name brand stations to close where they were in competition with the chosen site, and reduced petrol to a side game in the sale of grocery items.

It has not demonstrably reduced petrol prices over the board or improved the availability of petrol to the public.

Rather, it has reduced a substantial portion of the industry to a loyalty reward.

For buying excessive amounts groceries at non-competitive prices you get to buy petrol in limited amounts at a price that should be the market price in any event, if the intrusion of non-petroleum based retailers had not skewed the market.

The destruction of the Dick Smith Stockist stores is one of the bleaker and more evil chapters in retailing history.

After the Woolworths' takeover of what was a semi-franchised system, it became clear that any stockist who had worked hard to build a customer base was going to be squeezed out by the opening of a Woolworths' owned store in competition.

Most of the stockists saw the writing on the wall and jumped before they were pushed in an attempt to save independent retailing in their industry.

The balance has now been told their stockist agreements will not be renewed.

The stores and franchise founded by Dick Smith, a man who believed in the little blokes acting together to retain the ability to meet the market in their area, are now the epitome of everything he was not.

Stores once owned by enthusiastic, qualified people with many years of practical experience have been replaced by marketing outlets often staffed by pimple faced kids whose product knowledge extends to mobile phones and game consoles.

If this is what you want for your independent Home Hardware stockist, the blokes at the end of the street already struggling to compete with Bunning's, then support this acquisition.

Should you want a fair playing field and jobs in the future for your kids, then kick the door of the regulators until it buckles in the attempt to stop it.

One large player, in the form of Wesfarmers, is destructive enough. Danks supplies 205 Home Timber and Hardware stores, 312 Thrifty-Link Hardware stores, 66 Plants Plus Garden Centre stores and 939 independent hardware stores.

Danks distributes to more than 1500 independent retailers, of whom 583 are Home Timber and Hardware, Thrifty Link or Plants Plus Garden Centres.

If this disappears into the maw of Woolworths, then the competition will go with it.

Why do I say this? Do the sums. A stockist is not necessarily restricted to the one supplier. They bring in other products that meets the need of their particular market. This leads to competition at the product level.

Owned stores sell whatever the owner wants to push.

Bunnings has much that is high quality, but frankly much of its product is also cheap crap. Once the industry becomes an effective duopoly, particularly if Lowe's American concept of best retail practice dominates, then it is welcome to craporama.

The quality of product will head into the nameless brands' pit as the players attempt to sell more for less.

A hammer is not a bargain if the head comes off it the first time it is swung in earnest.

We will end up spending more on poor quality hardware in a vain attempt to find something that lasts.

Why do I say this with such vehemence? In the 70s I watched from the managerial seat as Walton's Stores were destroyed in the Coles Myer versus Woolworths' battle for supremacy.

I struggled to sell Canadian lumber jackets in Queensland because we had imported Sears Roebucks best practices and our Melbourne-based centralised buying group saw lumber jackets as “in”.

I watched the massive implosion of the retail industry as By Low, Safeway, Jack the Slasher, Franklins, Pennies, Piggott's, McWhirters and numerous small and now forgotten supermarket and independent clothing chains vanished from our shopping choices.

Only the big boys benefited. The shopper suffered choice reduction, price rises and descending quality.

Thirty year careers in retail vanished with their employers, as did the concepts of service, customer care and product knowledge.

I was trained to sell a suit that fitted based on a cloth sample and knots in a piece of string; and did so more than once.

That sort of product knowledge will die in Woolworths' quest for profit.

We cannot live in the past, but a future should have more than two choices.

Gympie Times


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