Why Woolies is a basket case

THERE’S a simple reason why Woolworths is having such a hard time at the moment. It involves baskets.

OPINION

MUCH has been written about the problems at Woolies, and the reasons why Coles is using its rival to wipe the spill in aisle three.

Last week, the company posted one of its worst results in 22 years. Woolworths’ net profit slumped to $2.15 billion for the year to June 30, down from $2.46 billion in 2013/14.

Two-and-a-bit sounds like a lot of billions, but it wasn’t enough billions, and certainly not enough to keep up with the rate of increase in the billions which Coles is making.

Incoming chairman Gordon Cairns, who described the role as a “dream job” to The Weekend Australian, presumably has a lot of those dreams which cause you to jolt upright in terror at 3am.

Mr Cairns is expected to lay much blame for the retailer’s current woes with Samantha Jade, and whoever signed off on those birds. (They’re gone now, along with outgoing chairman Ralph Waters.)

But there’s another, more fundamental reason. To paraphrase Bill Clinton’s famous 1992 election campaign mantra: “It’s the baskets, stupid.”

At my local Woolies, there are two doors: one for people coming in, and one for people going out. To the right, just inside the entrance, there’s a container for ‘fresh’ shopping baskets.

Far off to the left, before the exit and just outside the unassisted check-outs, is another container for ‘used’ baskets.

Bear in mind that this is one of those mini-Woolies that doesn’t have trolleys, so if you intend on buying more than two items, one for each hand, without a basket you’re going to end up looking like:

This guy.

Here’s the thing: no one ever bothers to move the baskets from one side to the other.

It seems like such a basic thing to do, and yet the staff there just can’t seem to summon up the energy to do it more than once a fortnight.

When they do, it’s as if Mum has asked them to tidy up their room.

One by one, customers walk in, see there aren’t any baskets, cast around, sigh, walk all the way over to the exit, dodge exiting customers to fish one from the used pile, then walk all the way back to the entrance.

This is made even worse by the fact that there’s usually a guy standing right there next to the full basket container, gazing blankly as all this unfolds in front of him, looking like he just ate mashed potato too quickly and is concentrating really hard to get it down his throat.

OK, it’s not all the time.

But it happens often enough that it sticks in your mind, which is all that matters when it comes to customer service — an area Woolworths ranks lowest out of the major supermarkets, according to consumer research companies Canstar Blue and Roy Morgan.

Yes, it’s a first world problem, but problems for Woolworths shareholders are by definition first world problems. And since we all have superannuation, that’s basically everyone.

Yesterday, investment bank UBS described Woolworths as a “good business” that has “lost its way” by focusing on the short term, taking margin at the expense of sales and customer focus.

It’s true. When you’re expected to pay $4.80 for a punnet of blueberries, but the supermarket staff don’t care if you actually have the capacity to carry them, something has gone seriously wrong.