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Major retailer on brink of collapse according to leaked memo

A MEMO leaked from the head of struggling discount department store Big W has revealed a new plan to entice customers back through the doors. But a retail expert said it will be the retail giant's last chance for survival.

In May Woolworths Group chief executive Brad Banducci admitted it could take years for the company to turn around Big W's fortunes, with figures showing sales dropped by 9 per cent in the third quarter. Mr Banducci said the business was a "work in progress".

In a leaked memo this week, obtained by trade press Channel News, Big W announced it would create "universes" called "About Kids", "About Leisure", "About Homewares", and "About Everyday and Seasonal".

Big W general manager Teresa Rendo announced in the memo there would be a new head of commercial role created to look after each universe. The memo claimed the head would be responsible for product in their category and driving customer strategies.

Retail Oasis' Pippa Kulmar however told news.com.au this strategy would be Big W's last chance for survival, as the discount department store had been claiming it was going to reinvent itself for years. She did not believe the idea of universes was big enough to save the store.

Big W has one last chance to prove itself, an expert says.
Big W has one last chance to prove itself, an expert says.

 

"The market is a bit sick of hearing about their turn around. They've been through so many CEOs and they have to do something demonstratively different. The idea of universes is interesting and customer centric, but there needs to be something fundamentally different," Ms Kulmar said.

"As a shopper it's not a big enough change."

Ms Kulmar said the new plan was too little too late and was not a long-term strategy.

"They need to show the public they're changing. The public is waiting for them to change," Ms Kulmar said.

The retail analyst suggested Big W should be on the look out for revenue changes in the first three months of implementing the new universes strategy, and if it doesn't work, it might need to consider selling the department store.

"They'd have to work out a game plan. Maybe that means selling up or becoming a smaller player," Ms Kulmar said.

"I feel for Big W, I wouldn't want to be them right now.

"Big W is not alone. Lots of businesses are undergoing transformations because the market has changed and international supporters like Amazon are coming. The market can't support as many competitors."

Ms Kulmar said for many customers, they didn't know what Big W stood for or why it existed and believes it's because the store lost focus on who its customers were.

"What we notice is when businesses become obsessed with the supply chain and efficiency, they are just focused on saving a dollar as opposed to understanding who the customer is," she said.

"They want to show they are profitable in the market by using cost-saving measures.

"You can't shrink your way to greatness and in the long-term they can't just continue to cut costs out of the business."

A Big W spokeswoman said the new universes strategy would make the customers the discount department store's priority.

"Big W has developed a strategy focused on putting customers first and part of this is the development of 'customer universes' that reflect how Australian families shop," she said.

"We are working to leverage the combined talent of the Big W and wider Woolworths team in executing this strategy and look forward to sharing the benefits with our customers."

Topics:  big w collapse editors picks

News Corp Australia


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