5 reasons Coles and Woolworths took over the Aussie supermarket sector
Supermarket giants Coles, Woolworths are both among Australia’s largest employers with more than a combined 400,000 workers, and both companies operate about 1000 supermarkets and other retail outlets.
But with Aussies spending about $100 a week at these stores, how were the two industry giants able to take over the nation’s retail sector?
Here are five reasons Coles and Woolworths have taken over the Australian grocery store market and have become a large part of Aussies’ daily lives.
RELATED TOPIC: How Woolworths is fighting off rivals Coles and Aldi
1. Both started out as small businesses
Both Coles and Woolworths were founded as small, family-owned general merchandise stores.
The Coles family started out as general storekeepers who sold supplies to gold prospectors during the Victorian gold rushes. After researching the idea of ‘one-stop shopping’, the first Coles stores were opened in 1914 on Smith Street in the Melbourne suburb of Collingwood. Within a decade, there were nine Coles stores in Melbourne.
Woolworths was born in Sydney as Woolworths Stupendous Bargain Basement, which was located in an arcade between Pitt and George streets in the CBD. The Woolworths name came from the US retailer F.W. Woolworths.
2. The two have grown into increasingly similar businesses
When one of the chains does something, the other isn’t far behind.
This was the case when Coles and Woolworths first began selling food — Woolworths was first in 1955, followed closely by Coles in 1956 — and more recently, the two companies have pursued similar marketing strategies revolving around low prices.
RELATED TOPIC: Woolworths, Coles feeling heat from new competition
3. Both will stop at nothing to pursue their interests
Woolworths and Coles have gone to great lengths to achieve their goals.
This is evident in just about every facet of business: with competitors, suppliers, employees and customers.
While some might think they’re supermarkets, they’re also the petrol stations, the convenience stores, the bottle shops and the hardware stores. Meanwhile, everybody else is going out of business.
4. Coles and Woolworths have followed the lead of their UK and U.S. counterparts
Several practices adopted by Coles and Woolworths in recent years — including some that have landed the companies in trouble — are the same things done by the leading U.S. and UK supermarkets.
Asking grocery suppliers for rebates in exchange for access to shelf space was pioneered in the UK and the US grocery sectors, as was the cost strategy that underpinned the heavy discounting of the milk price wars that saw Coles and Woolworths both sell cartons of milk for just $1.
5. Both intend to win over future customers by using data
The most recent part of Coles and Woolworths’ history was about extracting as much value from suppliers as possible to generate growth.
But the supermarket giants are beginning to recognise they can only crunch the suppliers so far before they begin to damage themselves.
Source: Smart Company
Business Chief Legend: Ho Ching, CEO of Temasek
Ask Singaporeans who Ho Ching is, and the majority will answer the ‘wife of Prime Minister Lee Hsien Loong’. And that’s certainly true. However, she’s also the CEO of Temasek Holdings, Singapore’s sovereign wealth fund, and one of the world’s largest investment companies.
Well, she is until October 1, 2021, as she recently announced she would be retiring following 16 years as CEO of the investment giant.
Since taking the reins in 2004, two years after joining Temasek as Executive Director, Ho has gradually transformed what was an investment firm wholly owned by Singapore’s Government into an active investor worldwide, splashing out on sectors like life sciences and tech, expanding its physical footprint with 11 offices worldwide (from London to Mumbai to San Francisco) and delivering growth of US$120 billion between 2010-2020.
Described by Temasek chairman Lim Boon Heng as having taken “bold steps to open new pathways in finding the character of the organisations”, Ho is credited with building Temasek’s international portfolio, with China recently surpassing Singapore for the first time.
As global a footprint as Ho may have however, she has her feet firmly planted on Singapore soil and is committed to this tiny city-state where she was not only educated (excluding a year at Stanford) but has remained throughout her long and illustrious career – first as an engineer at the Ministry of Defence in 1976, where she met her husband, and most notably as CEO of Singapore Technologies, where she spent a decade, and where she is credited with repositioning and growing the group into the largest listed defence engineering company in Asia.
It’s little wonder Ho has featured on Forbes’ annual World’s Most Powerful Women list for the past 16 years, in 2007 as the third most powerful woman in business outside the US, and in 2020 at #30 worldwide.
But it’s not all business. Ho has a strong track record in Singapore public service, serving as chairman of the Singapore Institute of Standards and Industrial Research and as deputy chairman of the Economic Development Board; and is a committed philanthropist with a focus on learning difficulties and healthcare.
As the pandemic kicked off, she not only led active investments in technology and life sciences, with German COVID-19 vaccine developer BioNTech among the most recent additions to Temasek’s portfolio, but through the Temasek Foundation – the firm’s philanthropic arm which supports vulnerable groups close to Ho’s heart, handed out hand sanitiser and face masks.
So, you would be forgiven for thinking that at age 68, Ho might simply relax. But in March 2021, just as she announced her retirement from Temasek, Ho joined the Board of Directors of Wellcome Leap, a US-based non-profit organisation that’s dedicated to accelerating innovations in global health. Not ready to put her firmly grounded feet up yet it seems.