Woolworths, one of the UK’s best-loved brands has gone into administration, putting more than 25,000 jobs and 815 branches at risk.  Yet there may still be a sparkle of hope for the high street legend that remains open for business today.

Woolies has an exceptional place in consumers’ hearts.  It was just one year away from its centenary.  Such an endearing name offers the official administrators Deloitte, the chance to market the concern to a shrewd buyer who appreciates the potential that such an evocative brand could still hold – especially in difficult times.

Harnessing that potential requires an understanding of what went wrong and then doing something about it. From a financial point of view the company has struggled under the weight of £385m of debt.  Over the past couple of months credit insurers forced the company to pay cash when buying goods from suppliers.

Pick and slightly mixed up

The Woolworths brand has always taken advantage of one of the most powerful psychological pulls that any company could ever wish for – nostalgia.  This was clearly demonstrated when the news of the company going into administration encouraged consumers throughout the country to reflect on their childhood memories of ‘good old Woolies’ being a place to buy all the essential knick-knacks of life.  

It was the people’s store.  Unfortunately for the brand, it didn’t keep up with the people’s changing tastes and buying patterns.  A puzzling product portfolio left consumers scratching their heads. The result was a confused brand message that led people to wonder what Woolies actually stood for.

Competition from other more brand-focused high street retailers selling similar products meant that core items like toys and DVDs could be purchased elsewhere at stores with a clearer idea of what their brand represented.   The other branding issue was staff.  Going to Woolworths was no longer a great brand experience. It was more like choosing products off a muddled stockroom shelf manned by people who didn’t really want or care to serve anyone.

However, with the right kind of brand refocus, the stores could still be turned around to once again represent a beacon of good old fashion value and service that puts the people first.

The bitter paradox of the brand’s demise is that it has happened at the one time of year when Woolworths always shines: Christmas (during which over 90% of it revenues are made).  Over the next few weeks consumers could either take the news as an indication that if brand like Woolworths and MFI could go down, anyone could go down. That leads to greater belt tightening.  This places more high street names like Currys at risk.  It is a wake-up call to businesses that being big is no longer enough – it’s about responding to a fast changing, difficult market that demands great attention to its needs in tough times.

Alternatively it might be a signal for consumers to band together in a defiant show of traditional ‘people power’ that gives their nostalgic brand emporium a gift of hope and support during this supposed season of good will to all men and fondly remembered brands. 

Share on Facebook

Bookmark to: