Woolworths defies Credit Crunch by Investing in Process

It's nice to see (in these dark days) a company willing to put their money where their mouth is and splash the cash to make things better. Woolworths are doing this.

Now I'm not a huge fan of the money being wasted in their new logo and branding (but good work to whoever cashed in on that one), but I am a fan when I see improvements to stores.

As you may know I'm a bit tragic when it comes to the weekly supermarket shop. I have a supermarket template which helps me to do the shopping more efficiently. I estimate it saves me up to 50% of the time it would normally take me. So when I see process improvements happening at my local store (West Ryde) I'm a happy man. So not only have Woolies replaced floors, roofs and tiles to re-brand I was excited to see that they've given time, thought and money to how efficiently the store operates. This is what they did:

• Introduced 6 Self service checkouts
• Removed unecessary aisles.
• Removed an awkward section of the store and moved more checkouts into this area
• Moved the customer service & cigarettes kiosk to the centre of the storefront

Now I'm sure all of this cost a lot of money, but let's look at what this will result in:

• Self service checkouts will reduce the need for 2-3 staff on the express checkouts and provides an additional speedy service for customers that would usually use express checkouts
• Removal of aisles has allowed better flowthrough of traffic and actually makes it easier to see what you're looking for - particularly at the entry point to the store.
• The customer service section is now easier to find (good for the customer) and the positioning at the centre of the entrance will lead to increased cigarette sales (good for the customer's disgusting cancer inducing habits!)

So all up Woolies have improved customer service, saved staff costs and have re-arranged the store which will result in improved sales. OK, they had to spend a bit of money to do so, but it's clear that this will be a good investment. In these times of doom and gloom it's refreshing to see a company willing to spend money to improve processes rather than the narrow-minded short-term belt tightening we're so used to. They've made at least one process tragic customer very happy!

Comments

[Craig Westbury]

Hi Craig, apologise if you have mentioned this before (I could not find a search on your blog), but what is a Supermarket Template? - I am intrigued.

Cheers
Craig

[Daniel Lock]

It is also worth noting, while on the topic of supermarkets, that Tesco's who has invested in process improvement and lean thinking via Professor Peter Hines for the last 15 years, has grown 4% year to date, while the UK economy as whole has done -1.5% last quarter.

That is the power of improving productivity with these tools and strategies and then re-directing that effort to innovation and marketing.

www.DanielLockConsulting.com
http://daniellock.wordpress.com/