John Howard, Woolworths and mutual admiration

It was disappointing to see Prime Minister and Woolworths CEO Roger Corbett side by side yesterday and gaining so much media attention. Woolworths is doing more to hurt small business local communities than many other companies. They make price more important than service. Woolworths and their peers, have ripped hundreds of millions of dollars out of newsagents. They have divided communities with their superstores – Maleny QLD, they turn happy people into mechanical drones as they dance through the required customer service steps. They are relentlessly pursuing getting pharmacies into their supermarkets.

The Prime Minister needs to be seen more often in small businesses. His policies need to more often reflect the interests of small businesses. He needs to understand the damage done to communities by giant corporations like Woolworths. When was the last time you heard a local story at a Big W checkout? Probably never. I bet at your local chemist or newsagent you get local stories passed on all the time. This is community building small business style. It’s part of the Australian story. Woolworths is not part of any Australian story.

Is Woolworths a family friendly employer?

In the television advertisements Woolworths want us to believe they are a happy bunch focused on delivering great customer service. I know one Woolworths employee, a single mum with two young children, who works for the Safeway division of Woolworths. her story is not reflected in the TV advertisements. She has asked for single mum friendly hours and has been told that it’s not fair on her co-workers. Her hours are either 5am starts or 9pm finishes. The daytime shift, which allow for school drop off, pick up and evening interaction are, it seems, saved for people other than this single mum. My friend has worked for the company over a couple of stints for more than six years and she continues to be treated appallingly through her roster. My friend suffers as do her children. Her supervisor and management want to know nothing of these things. The only option she has from their perspective is to get a job somewhere else.

Maybe Roger Corbett could find space in his next TV commercial to tell us about their family friendly management policies.

How much do Woolworths and Coles really hurt small business?

Not that much is I read this article by Lindsay Tanner (Labor finance spokesman and federal member for Melbourne), from the Herald Sun last week. Tanner’s position on the big guys getting bigger is not clear. Take this:

For all kinds of reasons, we tend to dislike major retailers like Coles and Safeway. They’re often blamed for killing smaller shops and suburban shopping strips, squeezing suppliers and exploiting workers.

While there’s some truth in such criticisms, they’re often very exaggerated.

Then this:

The big supermarket chains are not charities. They try to get prices low in order to make money. This intense competition benefits the consumer.

Some argue they’ve become too big and powerful. The best test is to look at their profits.

They’re reasonably healthy, but they’re not in the same league as other big companies such as banks.

There’s a huge range of smaller, specialised shops competing with them, often in the same shopping centre.

Be sure to read the whole article for context.

I think Tanner misses a few key points: supermarkets are not transparent – take Coles, their FlyBys loyalty program is not that great, they do not disclose adequately to consumers the value of th spend in terms of points and therefore discount; supermarkets cherry pick against small business – take newsagents, supermarkets choose the top magazines while small business newsagents don’t have the luxury of such a choice; supermarkets pursue profits whereas small businesses connect with the community; supermarkets control economies whereas small businesses support diversity of supply – take vegetables for example, Coles could wipe out a region with one national buying decision. This buying power could turn farmers into the working poor, all in pursuit of profit.

Like Tanner, I shop at Coles. I don’t like that they, through their buying decisions, try and control what I buy. I’d shop elsewhere but it’s not convenient. So I have to live with what they make more profit from or put with the inconvenience of shopping elsewhere.

The High Street Britain 2015 report.released by UK parliamentarians last week was on the right track. It seeks to curb the power of supermarket chains for the good of the economy and for the good of the community.
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The high cost of virus terrorism

People who write and release computer viruses are terrorists. The threat which has been widely reported as likely to hit today has caused extraordinary heartache in small businesses even if it only ever is a threat as opposed to actually damaging. The news about the threat has caused people to jump at shadows all day and I am sure that small business software companies around the country have wasted time like we have rescuing people from the shadows. The economic cost of viruses demands that those responsible are jailed for a long time.

Those most at risk from a computer virus are the most vulnerable – individuals and small business. That they are at the coalface of suffering at the hands of these terrorists is appalling. I’d like to see government action so their suffering is not in vain. Tougher legislation, stronger public statements of virus attacks and assistance for businesses attacked.

Woolworths, market power and consumer choice

Against the backdrop of the Federal Court imposed fine of $8.9 million against Woolworths in a long running price fixing case…

Samsung 1610 has released a new computer printer. It’s available exclusively through Dick Smith (Woolworths owned) stores. What is not made clear to consumers at the point of purchase is that toner for the Samsung printer is not available anywhere except through Dick Smith.

One of my businesses, Inkfast, sells ink and toner online. We have excellent wholesaler relationships. None of our wholesalers has been able to supply the toner for the Samsung 1610 printer. One wholesaler, who deals direct with Samsung, advised us that they understood there to be an exclusive deal involved because they are unable to source toner for this printer.

While Woolworths (aka Dick Smith) is welcome to negotiate special deals on printers, it is unreasonable to restrict access to the fuel, toner, for these devices. Toner is where you make the money long term and a deal providing Woolworths exclusive access to toner for the Samsung 1610 for even a short period of time is bad for consumers as it does not deliver the same price pressure as if the toner is available elsewhere.

On the back of yesterday’s Federal Court loss, Woolworths and Samsung ought to reconsider their position on this. Woolworths makes considerable noise about being consumer friendly and socially responsible yet its actions on matters such as this demonstrate otherwise.