Coles origins dates back to 1914, when George Coles opened the first Coles supermarket. April 9 1914 on Smith St, Collingwood was the first establishment of the supermarket giant. Mr Coles’ aim was to lower the cost of living for Australian families.
Currently Supermarkets, Liquor and Financial Services fall under the Coles Group, which is owned by Wesfarmers, after the acquisition of the group in 2007. |
Challenges facing Coles in its aim to be Australia's no.1 retailer.
Aldi's emergence in AustraliaAldi, a German supermarket chain, opened its first supermarket in Australia in 2001. It's private which generates around $11 billion in revenue (as of 2015-2016 financial year) is the best performing private label in Australia. This is a huge concern for Coles brand, which generated around $7 billion revenue during the same period. The emergence of Aldi is hurdle for Coles in its aim to make Coles brand the best private label brand in Australia. In order to combat this issue, the Coles brand team investigates and found the packaging played a big role in customer choice. The smart buy packaging (image on right) looks unappealing. The team changed the packaging to depict product in the left image below. The results were astonishing, sales rose by about 40% and growing. In an attempt to improve Coles brand product standing, more attractive packaging combined with low prices to match Aldi's products is being implemented.
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Rise of Salmonella caused by Lettuce and Salad LeavesSalmonella Outbreak has affected Coles both financially and caused a dent in its reputation. The recall of 4 leaf salad mix, spinach & rocket were the products affected by this recall. This recall in February 2016 happened after 100 reported cases of food poisoning in Victoria alone and over 128 cases around Australia (Butt, 2016). Some of the key reasons that caused this event and my role in relation to this event are as follows:
- As the salad mixes are delivered to supermarkets in a sealed package, the supplier’s packaging processes were the likely sources of salmonella coming into contact with the salad leave. Salmonella which is usually present in some microorganisms and insects would cross contaminated in the salad leaves and in this case when the leaves are not properly treated with chlorinated water, the salmonella from one leaf is likely to spread inside in the packaging and when customers consumed the product, it resulted in the food poisoning. It was estimated by the Merchandise planning and insights team that this recall was causing Coles an estimated deficit of $250,000 a day in lost sales all over Australia. When a product in not a good quality either due to freshness or recall of a product, the stores raise a claim, which means that product will be recalled and cyclic automatic payments to supplier, which have already been paid, will be claimed back. My position as an intern working in Accounts Payable section of Financial Control is to process the claim and claim back the payments through a notice to supplier raised by the SAP payment system. During the resolution process of this event I learnt the method in which a supermarket giant like Coles responds not only from a corporate affairs point of view but also from a financial point of view. |
The implementation of more attractive packaging (left image) and eliminating the smart buy packaging, saw sales of COles Brand products increase by 40%