In August 2016, The Age published an article outlining yet another twist in Coles’ strategy. The intention, this time, is to reduce the supermarket’s product range by 15%, to “drive the efficiency of the business to fund grocery price cuts and safeguard its market share.”
The notion of reducing the merchandise offer to protect market share sounds strange. But, the strategy problem at Coles runs deeper than that. Let me take you on a short trip down memory lane.
Many years ago I decided to undertake a small Artificial Intelligence project – a program to predict TattsLotto numbers.
I began by loading my ‘big data’ (a few years of historical lotto results) and then developed quite a smart algorithm based on visual draw patterns. Once up and running, I was pleased to see that my trials showed that the program was able to predict lotto results with high accuracy.
Have you noticed that struggling retail businesses tend to change their senior executives frequently?
Undoubtedly, every new appointment is made with the hope of finding a leader capable of turning the ship around. If such a person is found and takes the helm, the business is gradually transformed, and its results begin to improve.
Despite the retail industry’s significant contribution to the Australian economy and its dire need for relief from misguided policy, it is constantly ignored by all sides of politics.
Read the full column on Inside Retail, Australia’s leading retail trade publication.
Pressure can make people, and retailers, do strange things.
Take for example Walmart in the US. This immensely successful retail giant was feeling some heat from competitors in the online side of the retail market last year. Obviously, retail is a sector of the economy that Walmart is accustomed to dominating, so the business couldn’t sit idle and let revenue slide.
On 31 May 2016, The Australian Financial Review wrote about Aldi’s rapid expansion in Australia. Aldi is now the most profitable supermarket retailer in Australia, with EBIT at 6% against 4.6% reported by Coles, and 5.4 reported by Woolworths.
Most of us have an interest in interest rates, one way or the other.
For example, the current record low rates, negative in some countries, mean that those with mortgages and other loans rejoice while those who live off their investments don’t fare as well.
Consequently, one question looms: when will interest rates rise, and by how much?
Many years ago an article was published in the UK lamenting the dismal state of primary education in Great Britain. The key premise of the article: half of the students had below average reading skills.
Apparently the article was promoted as highlighting a serious problem, conveniently ignoring an important fact in favour of selling more newspapers – in any typical statistical sample, the number of values below and above average will be similar.