The current refugee boats debate in Australia:Is Kevin Rudd more concerned about the welfare of the refugees or his own popularity?

I will keep my post on this complex & gut wrenching subject short and simple:

I was never a supporter of Howard Government's harsh stance on refugees & the disasterous detention centres policy. Like many others, I was appalled by Howard's political exploitation of public mood at the time at the expense of desperate refugees. However, Howard was at least upfront with the public about his tough policy on boat refugees.

I am now even more appalled by PM Rudd disingenuous attempt in trying to make the problem disappear, & more importantly it seems, to protect his "teflon popularity" by shifting the refugees to Indonesia & their much harsher camps.

In my opinion, both PMs have brought shame to Australia & its proud history of compassion & fair go. However, Howard was at least upfront about his shameful policy whilst Rudd is trying to hide his in order to portray himself as a humanitarian!

Should Thomas Dux Grocer customers be told that all Thomas Dux stores are fully owned & operated by Woolworths?

In May this year, Woolworths bought Macro Wholefoods, an organic food supermarket chain of 9 stores for a repoted $30m from Brett Blundy's Retail Group, which had previously sunk millions of dollars into the stores and was happy to sell its loss making venture to Woolworths (although this was denied by co owner Pierce Cody)

As reported at the time in the financial media, Woolworths were interested in Macro stores for two primary reasons:

1. Macro had more than 100 organic private label products.



2. The acquisition of the 9 Macro stores would fast track Woolworths' entry to the high margin upmarket gourmet food market as the stores would be rebranded under the newly established "Thomas Dux Grocer" division of Woolworths. Thomas Dux was already operating and would have 11 stores in Sydney & Melbourne after the rebranding of the 9 Macro stores.

Macro wholefoods was the first large scale attempt by any food retailer in Australia to duplicate the likes of the impressive"Whole Foods Market" chain in the USA. These business models attempt to sell high quality organic and/or naturally grown fresh & packaged food products at higher margins.

Macro's business model did not manage to achieve the widespread reputation or get close to the high benchmark standrads of the "Whole Foods Market" and as mentioned earlier was rumoured to have always been a loss making venture for the astude Brett Blundy (in partnership with the founder Pierce Cody).

Woolworths have always been wary of the commercial fragility of a purely organic products based food retailing business model in Australia. Generally speaking, there is an immediate & direct negative effect on retail sales of organic food products when there is pressure on discretionary income.

Therefore the "Thomas Dux Grocer" employs a different business strategy altogether. On the official website, thomasdux.com the stores are promoted as being all about rediscovering all that is good & exciting about food, with fresh fruits, vegetables & deli products as well as speciality foods from around the globe.

The Thomas Dux format has the potential to introduce an innovative, exciting & much needed retailing format to the deprived consumers in Australia (compared to the USA), and it will most probably thrive considering that the business model has been designed & implemented by Woolworths, the most capable food retailer in Australia.

Nevertheless, there are certain aspects of the way the brand is being promoted which are rather disturbing.

Thomas Dux Grocer is being promoted to consumers as (quoted from the official website & full page ads in local papers):

"We're the local store: it's the place for people who love good food to shop every day. It's a meeting place that reflects the communities we serve. .....................Thomas Dux is about being 'just around the corner'."

The wording of the description of the business on the website, and design & wording of the advertisement in the local papers the emphasis on the "Local" aspect of the business are cunningly structured to promote the business and give the impression that Thomas Dux Grocer is like a "Small local family owned start up that is now expanding!". Not surprisingly, there is no mention of "Woolworths" in any of the promotions, on the website or (I suspect, although I am yet to inspect the stores closely) at any of the stores.

I acknowledge that not promoting or revealing the parent company is not an unusal business practice, is not necessarily a deceptive or misleading practice and in fact occurs in many industries to various degrees.

In case of the Thomas Dux stores, it is the "local, small, family feel" aspect of the promotional strategy that I take exception to.

Whilst I am sure Graham "Woolworths(!) Practices Act" & ACCC would not see any contravention of the relevant sections of the Trade Practices Act with the issue in my point, I am still of the opinion that the public must be informed when a local "Small Business" they shop at and perceive as an independent operator is in fact owned by a giant corporation with a massive market share and influence. I have also made this point about the many bottle shops and pubs that are owned by Woolworths & Coles (Westfarmers) in the past.

But none of the cases have seemed to be as belatently veiled as the Thomas Dux.

In many instances, consumers continue to support small local (& family owned) businesses even though they (at times incorrectly) perceive theses businesses as being more expensive to shop at compared to larger operators.

The Thomas Dux model & image fits both of the above. It looks like a local small business start up that is expanding, and it is more expensive than many other outlets with a similar or competing offer.

Should consumers be explicity told that in case of Thomas Dux Stores, they are dealing with Woolworths as the parent company and the full owner of the business? Your comments are welcome & encouraged.

Myer Share Offer: What is the big fuss about a bunch of tired looking stores with no staff and dismal range of stock?

(An edited version of this post was published as the "Letter of the Week" in BRW Wed 8th Oct 2009)

Can Department Stores survive without customer service? Can they be attractive to investors even though all over the world Department Stores have been consistently losing retail market share to Speciality Stores over the past 20 or odd years? And more to the point, can Myer sell its story successfully to investors by improving financial performance & bottom line by reducing staff levels in most stores? Also, how about Customer Service? Does it count for anything at all in Myer's retail strategy into the future? I guess speciality retailers must be rejoicing the opportunity that Myer is creating by not offering any service or advice in most of the departments in Myer stores.

Don't get me wrong! Myer share offer has been a great marketing exercise! Jennifer Hawkins can make any campaign interesting, whether it is about Myer or Rent A Loo! Investors will take notice and listen. Bernie Brookes and his team are doing a great job to get the attention of the investors they are after!

On a closer look (at Myer's share offer, not Jennifer Hawkins!), will Myer be a good investment in a retailing era that has seen department store business models progressively lose a substantial portion of their market share to speciality stores in most developed countries over the past 20 or odd years? And is eliminating customer service a clever medium to long term strategy for a department store business model?

Myer's CEO, Bernie Brookes and his team have been working very hard to get to the current stage of the process and get the business to at last after many years start to show some healthy profit.

But what has been the cost of achieving this? Most experienced and loyal Myer employees have either been made redundant or sacked (admittedly some were not the most productive). This of course is the classic razor gang corporate cost cutting strategy and once concluded will make the bottom line look healthier by simple accounting default, and a great way of making it look as though the business is performing much better financially due to productivity gains! Great and simple idea if the intention is to sell the business!
Go to any Myer department store and the level of service is non existent or at best as good as discount variety stores' such as Big W & K Mart' level of service.

in my unsuccessful attempt to purchase a new model iPod touch from a Myer store the other day, after having taken an eternity walking around the store to find someone to help me with my enquiry, the staff admitted to me that:
1. The entire Electronics Department (TVs, DVDs, iPods, Cameras & Computers) no longer had a single specifically allocated specialist staff member
2. Myer had not offered to train one of the other staff to at least enable them to provide basic advice on e.g. the differences between different models!
3. And then they informed me that the store did not have the new iPod and the next order would take up to 4 weeks to arrive!
4. On top of this, it was suggested to me that minimum staffing levels are making Myer stores prime shoplifting targets. I am sure shrinkage catches up with accounting results sooner than later!

I look at my most recent shopping experience in Myer and don't like what I see. Poor range of products & tired looking stores in most suburban locations, next to zero customer service and in many cases demoralised staff! I am not sure these non tangible factors are indicative of a Rosy retailing future for Myer!

But as worrying as the above is, the greedy way the financial media is hyping up the Myer share offer is even more astonishing & sickening. The media are acting as irresponsibly as they did in the few years prior to the beginning of the current financial mess. Not many commentators have made much reference to the above intangible factors I and I am sure many others, are trying to raise.
Is this the same media that cheered the listing of business models such as ABC Childcare & Babcock & Brown to no end?