chapter

CHAPTER
Nine
NINE
Challenges and opportunities
2000–2008
1.
2.
3.
DID YOU KNOW?
On July 1, 2000, the government
introduced a Goods and Services
Tax (GST), greatly impacting the
administrative workload for all
Australian businesses, especially those
dealing in fast moving consumer
goods. In fact, Coles was required to
re-price some 100 million items – no
mean administrative feat!
4.
1.
Fifty-six thousand people worked in the supermarket division in 2001. Coles has
always understood the importance of its team members.
2.
‘Serving you better’.
3.
In 2006, Coles Express contributed a record profit growth of 83 per cent, making it
one of the most successful ventures ever conceived by the company.
4.
These days, Coles works with its transport providers to reduce vehicle movements,
kilometres driven and carbon emissions.
T
he nation – and the world – heralded the new millennium
with firework displays that blasted the twentieth century
into history, but despite the buoyant mood in society,
the economic realities for business were a little starker. Low
interest rates encouraged house prices to skyrocket in the early
part of the decade, yet the Australian dollar fell to around 50
cents against the American and GDP growth fell to 1.4 per cent.
Unemployment rose, but Coles Myer remained one of Australia’s
largest employers.
In a bid to entice customers back into stores, Coles launched a
new advertising campaign in the year 2000. ‘Serving you better’
became the company’s new catch-cry as it sought to fine-tune
its service offering against an increasing range of overseas
competitors threatening its market share. Service had always
been synonymous with the Coles brand and ‘the noughties’ was
a decade when service mattered more than ever.
Turning to the future
Ex-Brambles CEO John Fletcher became the boss of Coles Myer
in 2001, and he immediately set to work creating a turnaround
program for the company. While the Coles supermarket division
was performing well, Coles Myer’s other, non-food businesses
had been struggling for some time and steps needed to be taken
if the company was to come out the other side intact.
In 2002, a five-year growth strategy for the company was
outlined, promising better value for customers and maximised
shareholder growth. A themed approach directed the strategy
for each of the five years, starting year one with the slogan
‘Success begins’. Pivotal to this was creating a unified culture,
which had been a challenge for Coles ever since the 1985
acquisition of Myer.
The second year of the growth plan for Coles Myer was all
about ‘Moving forward’. At the same time, Coles introduced
another new marketing campaign of its own – ‘Save everyday’ –
enhancing the company’s reputation for value.
Coles continued to be a leader in house brands, increasing
its range to 2000 items including an expanded ‘Organic’
label. Customers continued to show strong support for the
house-brand range, which increased to over 2400 items, and
the company’s traditional focus on store expansion continued.
In 2004, it was all about ‘Delighting our customers’. Chairman
Rick Allert outlined the company’s absolute focus on three
goals, none of which were anything new to a company with a
rich heritage of customer service. ‘Being the best team’ so that
Coles could ‘delight customers’ and ‘grow shareholder value’
became phrases to live by.
‘Maintaining momentum’ was the catch cry in the fourth year of
Coles Myer’s revitalisation program. Sales and profits went up in
this year and shareholders were delighted when dividends went
the same way.
Year five was branded ‘A new era begins’, but although by many
measures it appeared the company had been re-energised, the
one-team culture across Coles and Myer businesses had not
improved. And without that, the future could never be rosy.
Coles Express – a new kind of
convenience
Back in August 1997, Coles had launched Coles Express. The
idea was sound: to provide customers with greater access to
food through petrol stations on street corners, therefore facing
the competitive challenge of convenience stores head on.
Remembering that in the nineties, late night and weekend retail
trading were permitted unless with a special licence, this was
another way for Coles to avail themselves to more customers,
more often.
Conveniently located close to public transport, the stores offered
speedy payment checkouts and a limited range of fresh produce
and take-away lunch and dinner options. In January 1998, the
first trials of a discount fuel arrangement began with Mobil in
Tasmania. Customers who spent at least $30 in any Tasmanian
Coles supermarket were then able to save two cents per litre on
fuel at Mobil service stations.
The next month, in another joint venture with Mobil Oil Australia,
a new food initiative was launched, this time in Wantirna,
Melbourne. Called ‘fast & fresh’ it was twice as big as traditional
convenience stores, combining a wide range of grocery, heatand-eat and fresh products, and traded twenty-four hours a day,
seven days a week.
Those first stores, however, never gained any momentum and
soon after their launch, management began to reconsider
the strategies.
The idea was shelved until early in 2003, when in July that year, a
revised discount fuel offer was launched, this time in partnership
with Shell, and rolled out on a much grander scale. Over 150
Coles Express locations were opened in Victoria and this time
around it was a resounding, sustainable success. When, by mid2004, the rollout was complete, a nationwide network of 584
service stations had been established, generating more than $3
billion in sales through Coles’ new petrol and convenience store
division. By 2014, that figure would rise to over $7 billion.
Peter Short runs Coles Express, overseeing the operation that
now has 635 stores across Australia, from the centres of our
largest cities to out-of-the-way Broome and the remote Fitzroy
Crossing. He started out responsible for a team of four people
(including himself), but these days is ultimately responsible for
around 4000 team members. Clearly, Coles’ decision to expand
into petrol retailing is paying off.
‘I was employed by Shell from 1980 until 2003, when I became
a Coles employee. In the late nineties, Shell made a global
decision to extract itself from retail sales of petrol and focus
more effort on exploration. They figured exploration was the
key as opposed to retail – especially in established markets
where they couldn’t get much growth. At that time, Australia
was over-regulated in the fuel industry and had low margins and
few opportunities for expansion. But Australia was still key for
Shell’s global liquid natural gas strategy, and Shell still wanted to
maintain some visibility in the country.’
Negotiations with Shell were complicated by the fact that their
600-odd stores were owned by five franchisees. But once
103
the ‘500 feet of contract’ was finalised, everything suddenly
happened at hyper-speed. ‘Coles acquired the rights to operate
Shell’s retail operations for twenty years. We effectively lease the
petrol and Shell branding, then do what we want in the shop.
Overnight, every one of those hundreds of outlets were branded
Coles Express.
‘Coles picked three people and I was the Shell person. We all met
up in the grey, dark head office just a few months before the big
launch, and stood around a big wooden desk that still had stuff
on it belonging to the previous guy who’d worked there. None of
us knew what we were supposed to do, so we got a computer and
a phone and started to fill up that desk with our own stuff. Within
a week we had a plan, with roll-out dates to work backwards
from, and I was amazed by how helpful everyone was to us.
Shell didn’t leave us any of their documentation or manuals for
legal reasons, so we literally had to start from scratch. We had
to get people on the payroll, organise to change all those signs,
sort out licences and computers and ordering processes, but so
many people weighed in and helped; it was just brilliant. The
concept was exciting, and coming from slow-moving Shell, it
was as if everything had been put on fast-forward.
‘I remember we tried to keep the old Coles orb in our Coles
Express logo design, but we couldn’t get it stitched correctly
onto our uniforms, so we just removed it. Thankfully, when Ian
McLeod started the turnaround, he said, “Don’t like the orb in
the logo”, and it was removed from the whole company. Lucky
for us!’
104
But orb or no orb, Peter and his team achieved immediate and
lasting success. ‘Sales in each outlet rose 40 per cent overnight
and went from strength to strength from there, achieving 15 per
cent growth year-on-year ever since. It was a stellar deal that
over-delivered for both parties.’
Not too much in the world is as it was ten years ago, but
Coles Express has stuck to something tried and true over that
time: 4-cent discounts on petrol. ‘Besides the odd special
offer, we’ve maintained 4 cents off a litre with a Coles receipt.
It’s still on paper just like it was from day one because we’ve
found that customers like having the tangible discount rather
than something “invisible” on a card. There is something very
satisfying about handing over your docket to get your discount.’
Coles Express became a significant contributor to Coles Myer’s
food and liquor operations, but performance in the overall
organisation had begun dipping and some members of the
Board and in the public began to seriously question Coles
Myer’s structure, and the part that supermarkets were playing
in it. Could such a corporate retail giant be flexible and nimble
enough to be responsive to market needs? Could the group
be profitable enough to have a future? The genie was out of
the bottle.
But meanwhile, Peter and his team surged forward regardless,
proud of what they were achieving. ‘Launching Coles Express
was invigorating. Everyone was just so committed and engaged
and I don’t know if any other company could have accomplished
what we did in such a short space of time. I’m proud of the
launch period but I’m actually proudest of our sustained results
and performance since. The energy is still there, we still get
things done on full throttle, and it still feels good.
‘I can’t see a future where Coles Express isn’t beneficial to
customers and shareholders. I can see us being positioned more
as a “fresh food on the go” outlet rather than a “fast food” one,
but underlining it all, we’ll keep concentrating on doing what
we’ve been doing well for the last ten years, increasing service
levels and performance with new systems and technology as we
go. I’m really excited about where our tribe is heading.’
The Coles Group; a future with food
Ever since the 1960s, Coles had been a market leader in
Australia’s food retailing industry. Then, in 1985 it became a
part – a key part – of a wider retailing group under the banner of
‘Coles Myer’. In 2006, it returned to the success of its heritage,
selling the ailing Myer department store and becoming instead
Coles Group.
Expressions of interest for potential buyers of Coles Myer’s
department store arm had begun in August 2005. Both
Australian and overseas investors showed significant interest,
including the Myer family themselves, who had aspirations of
returning the business to the family fold. But on March 13,
2006, Coles Myer announced it would sell Myer to a consortium
largely controlled by US private equity group Newbridge Capital,
with the Myer family retaining a 5 per cent stake. The sale was
completed for $1.4 billion in June 2006, a decent financial
return on the $1 billion Coles had spent to buy Myer in 1985.
In November 2006, the business was rebranded to reflect the
new, simple approach and a new ‘Coles Group Limited’ logo
was launched.
By June 2007, the Coles Group owned 3000 stores. In the food
and liquor division, Coles, Bi-Lo, Liquorland, Vintage Cellars and
First Choice Liquor made up the lion’s share. In addition, the
group owned 180 Kmart stores in Australia and New Zealand,
260 Target Stores and one hundred Officeworks stores.
The strategy for Coles supermarkets from 2006 involved
enhanced focus on customers, fresh produce, innovative house
brands and on-shelf availability. Extra team members were
employed in stores, extra trolleys were provided in supermarkets
and tired stores were given a facelift, making them cleaner,
brighter and easier places in which to shop.
Along with all the front-of-store changes, a new innovation in
2006 was the introduction of ‘farmer to you’ returnable plastic
crates, which reduced packaging waste and handling of fruit and
vegetables, improving quality for customers. Coles supported
this roll out with a ‘less handling means better quality’ campaign.
But nothing is certain in big business, and despite the
supermarket division holding Coles Myer together for the best
part of a decade and the initial enthusiasm surrounding the
creation of the Coles Group, the new Group now faced financial
difficulties of its own.
In July 2006, the Group embarked on a plan to take simplification
a step further in order to chase profitability and return to
growth. At the centre of this new strategy was the creation of
one integrated Coles business that met the everyday shopping
needs of all Australians through the development of massive
new retail supercentres – a trend that had taken root in the USA.
The strategy meant that every business in the Group – with the
exceptions of Officeworks and Target – would be rebranded by
the end of 2007. It was an enormous administrative undertaking
that many key shareholders believed was too high-risk and not
worth the distraction. The plan was not well received by investors
and Coles began to look vulnerable.
In August 2006, Coles announced that a private equity firm had
tabled an offer to buy the company, but that it had been rejected
on the grounds that it was too low – not that the company would
not be sold. A second offer followed, but it too was dismissed.
Then on February 23, 2007, Coles announced a significant
downgrade to its profit forecasts, and by May 2007, growth
figures were at their lowest level in seven years, due in part
to disappointing sales results in its supermarkets, as well as
the traditionally well-performing Kmart stores. The strategy to
rebrand Bi-Lo as Coles stores had been poorly executed and
the company had been unable to deliver the levels of customer
service required. How quickly the fortunes of Australia’s biggest
retailer were turning.
Added to the difficulties was the huge amount of change that
the business had experienced over the previous five years; team
members and management were tired. Investment back into
the business in recent times had stalled due to the distractions,
and all the corporate machinations meant that Coles was now
drifting from the pylons it had been built against – quality, service
and value for the customer.
A fresh start
As the Coles Group struggled through 2007, it continued to field
acquisition proposals, each of them a symbol of the uncertain
times that the company and its team members were enduring.
But one interested company, however, stuck it out. Its name
was Wesfarmers and they wanted Coles back on top of the pile.
On July 2, 2007, Wesfarmers announced that it had secured
the purchase of Coles for $19.7 billion, in what was the largest
takeover in Australian corporate history – dwarfing the record
previously held by Coles when it purchased Myer in 1985.
Wesfarmers paid $17 a share for the company, easily outstripping
the previous highest offer of $15.25. Many thought they had
over-paid, but Wesfarmers had built a reputation for having a
long-term, conservative view of the world, and they knew Coles
could be revived, in no small part because its team members
wanted it to be.
Wesfarmers officially took control of Coles on November 23,
2007 and the new conglomerate became Australia’s biggest
private-sector employer, paying wages to almost 200,000
team members and generating annual sales of $38 billion.
105
Importantly, the acquisition meant that Coles would remain in
Australian hands.
Wesfarmers’ Managing Director Richard Goyder remembers the
circumstances surrounding the acquisition very clearly. ‘It was
clear that Coles Myer were facing some challenges even early
in the 2000s, and in 2003 we had a good look at the possibility
of buying Coles with some equity partners. Coles was under
pressure and the real benchmark was Woolworths, which was
outperforming Coles in every area. We had a feeling back then
that we might be able to help, and even though it didn’t work
out at the time, we kept Coles on the radar. In 2006 some equity
groups began testing the water, then in 2007 Coles appointed
advisors and in the interests of their shareholders, basically put
the business up for sale. We thought we should have a really
good look at it, but knew we had to have some private equity
supporting any bid we made – the transaction would require a
significant amount of money.’
The plan was for Wesfarmers to take 100 per cent ownership
of Target and Officeworks and for the equity partners and
Wesfarmers to go 50-50 in Coles, Kmart and Liquorland.
Wesfarmers is a conservative organisation and Richard’s
personal default position is to avoid risk, but both the company
and the man were about to be tested. ‘Well, you can’t control
everything, and in late June 2007 – just before bids were to be
submitted – the first ripples of the GFC appeared. Global equity
markets tightened up immediately and our equity partners asked
for a couple of extra weeks to get their funding organised. There
was a lot of borrowed money behind the strategy, and we started
to believe that the partners couldn’t get their funding together.
We weren’t to know the storm the GFC was to become, but we
took a calculated risk and decided to go for the whole lot alone.
We were talking about a multi-billion dollar deal, but in actual
fact, we’d done a lot of homework and we were very confident
we could make it work. The Board made a quick decision to go
ahead, and we tabled our offer.’
In hindsight, the decision was the right one, but the year
following the purchase was an intense one for Richard and his
team. ‘The transaction was valued at around $22 billion, and
when that amount of money is involved, you can’t expect it to
be easy. I never doubted the acquisition for a second, but after
the initial euphoria, plenty of people did. I spent a lot of time
travelling to shareholder meetings to reassure the market of our
plans and encourage them to give us the time we needed to
affect the turnaround we knew was possible.’
Richard and his team could see what needed to be done,
but this was no theoretical case study and any change of this
magnitude must always come down to the people charged with
making it happen. ‘Look, most business is pretty simple: the art
is in turning those simple ideas into reality. It was pretty clear to
us that five things needed attention straight away: customers
deserved price trust, fresh food and a better look and feel in the
stores, team members deserved more attention, and the supply
chain needed to work better.
107
Wesfarmers, an
Australian institution
Wesfarmers was established in Western
Australia in 1914 – the same year that Coles
opened its first store in the inner-city suburb
of Collingwood, Vic.
The company isn’t driven by industries, but
rather, by opportunities that bring value to
its shareholders. Beginning life as a farmers’
cooperative, it has since diversified into
supermarkets; department stores; home
improvement supplies; office supplies; coal
production and export; insurance; chemicals,
energy and fertilisers; and industrial and
safety products.
Wesfarmers is one of Australia’s largest
employers and has a shareholder base of
approximately 500,000.
‘Coles had 100,000 team members ready to go, but without
leadership to guide and motivate them, none of these changes
would be possible, so even before the transaction was finalised
in November 2007, we started a global search for the best retail
leaders. At the time, food retailing in the UK was as good as
anywhere, so we spent a lot of time there, and of course, that’s
where we met with Ian McLeod.
But high-level company issues continued to dominate. By June
2008, Wesfarmers had restructured the previously centralised
Coles functions to create autonomous retail divisions, and
sought to introduce efficiencies in all areas. Coles’ above-store
employee numbers were cut, resulting in a flatter structure,
better able to service the store network. None of the changes
came easily or quickly, but Ian McLeod was up for the challenge.
‘Ian is an engaging character with a lot of skills. I remember that
he went to the top of the pile in my mind when he came to an
early meeting with a list of names of people he wanted in his
team. He was bringing solutions before he’d even started! After
a few meetings, he wanted to come out to Australia to have a
look around, and I remember meeting up one sunny Sunday
in Perth at my son’s cricket game. We had a chat, then Ian was
keen to see some stores. Unfortunately supermarkets weren’t
allowed to open on a Sunday back then, but he was insistent, so
I took him to a local grocer/deli in Cottesloe instead. It was the
only real option. Within seconds he had his camera out taking
photos… and within minutes his snooping around had the both
of us kicked out! It was alright for him – he was going back to the
UK the next day. I had to keep living there!’
Ian’s first day at Coles was midway through 2008, but it actually
wasn’t the first time the company had tried to lure him Down
Under. ‘I was approached to run the supermarkets division
around 2003 by John Fletcher, who was Coles’ managing director
at the time. It was an interesting time because Woolworths were
much stronger than Coles and John was trying to implement
changes to catch up. He’d noticed the turnaround at ASDA
in the UK [during the nineties when John worked there] and
wanted to replicate them, but there was resistance to change
at Board level and he lacked support. It’s my view that Coles’
heritage was a burden back then because there was too much
living on past glories and a misguided view that “this is the way
we do it”. The withdrawal of the Coles family and change of
management after the 1985 Myer takeover meant a link to the
quality aspects of the past had been lost – we needed to get
back to the basics of food retailing and service provision that the
Coles brothers built their business on.
Meanwhile, Richard publically promised to improve Coles’
product range, prices, availability of goods and level of customer
service. And when Ian agreed to join the team, the excitement
became palpable. ‘Ian is very strong commercially, but he
also has the ability to galvanise the troops. By late 2007, I felt
really confident that we were going to achieve what we all wanted
for Coles.’
‘Then in 2007, Wesfarmers made its successful bid, and one
old, respected Australian company took ownership of another
old, respected Australian company. Wesfarmers publically
declared its intention to return Coles to its former glory and I
was approached again, this time by Archie Norman on behalf
of Richard Goyder. At the time I was CEO at Halfords [leading
UK automotive parts retailer UK] and was looking for a new
challenge, so I agreed to meet Richard in London. The idea
of being given full scope and autonomy to lead a turnaround
was very appealing – and of course there was also the lure of
Australia’s natural beauty. I was immediately interested.
‘I decided to fly to Australia for a weekend to have a look at some
stores. I visited twenty-three stores in a day on the east coast and
examined the wider retail scene at the same time. Then I went
to Perth to meet some Wesfarmers people, and by the time I got
on the plane to fly back to England, exhausted, I’d learnt that
Coles stores weren’t clean enough, the dress code was shabby,
product quality was low, in-store signage was confronting and
service was lacklustre at best. But these weren’t just problems at
Coles. The thing that I couldn’t get out of my head was that the
Australian public deserved a better shopping experience from
the entire food retailing industry. It was at that point I was sold
on the challenge.’
Ian was given the rare opportunity to pick his own team and the
autonomy to do it his way. ‘Wesfarmers have a proven record
of buying businesses that have potential, appointing the people
they think are best to realise that potential, then letting them
get on with it. Australia is fortunate to have a company like
Wesfarmers, and so is Coles. If we had gone into the hands of
private equity there is a large likelihood that the impact of the
GFC would’ve led to short-term decision-making, but that was
never the case with Wesfarmers.
‘It was vital to make connections and to not make sweeping
assumptions. People wanted to believe and were only ever going
to reject spin, and that was absolutely fine with me – I really
believed in what could be achieved, so in actual fact it was very
easy to communicate openly and clearly. Everything we said and
did was anchored around our Proud to be Coles matrix, where
four values support what it means to be Coles. One: customers
come first, always. Two: support each other to get things done
– we had to get away from the blame culture and encourage
people to make decisions. Three: have pride in the service we
provide. Four: always strive to be better. That matrix is as useful
today as it was five years ago.’
A supplier’s perspective
Meanwhile, a renewed focus on supplier relationships began.
For too long, customers had been sold what suppliers had to
sell them, rather than suppliers being asked to supply what
customers wanted. The new blood brought in to revive Coles
would go on to pay significant attention to this area, and one
supplier that had a bigger interest than most in the turnaround
was Trevor Lee of Australian Country Choice (ACC).
Trevor’s company has a unique business model. For over forty
years, Australian Country Choice has had one customer: Coles.
‘Forty-odd years ago, Coles was actively looking to establish a
predictable and secure meat supply and I went to them with
a plan. I was about twenty and only had small family cattle
properties in Roma and Toowoomba behind me, but I wanted
Coles to get on board with my idea of creating a vertically
integrated supply chain. It was a new idea for Australian
agriculture, but they heard me out and decided to give it a go.
We started with five or six cattle a week, but it quickly grew to fifty
and that allowed me to grow our back-end livestock production.
‘When we got to seventy a week we took on contract killing
and preparation and delivery to some stores. We then started
feedlotting, which gave us even better consistency in quality.
After ten years, we got to 2000 cattle a week and because of the
predictability of sales through such a big network as Coles’, we
could then invest further into the supply chain and spend money
on a dedicated meatworks. As long as we could recover our
investment and production costs through a contract with Coles,
we were happy. Way back in 1972 when we started, I thought
we might get to 500 cattle a week; I never even imagined 2000
would be possible!’
Soon after the Wesfarmers takeover, Trevor and his team were
made well aware of the new management team’s customer
focus. Along the way, they were given the confidence and
impetus to continue to invest over $120 million into the beef
processing plant as well as upping their investment further down
the chain. ‘We now have 1.6 million acres and over forty farms
either owned or under management, as well as three feedlots
in southern Queensland to ensure the consistent quality Coles
109
needs for its customers. We now also value-add with sausages
and rissoles, and can do it all under one roof. We employ over
a thousand Queenslanders, own 150,000 head of cattle and
supply around 5400 head of cattle to Coles each week. Most of
that growth has come in the last five years and we still only have
the one customer!
‘Through the late eighties and early nineties, we knew there
were difficulties with the Myer acquisition, and various Coles
managers had a variety of ideas about how to run the supply
chain, but we had a long term contract and that saw us through.
Under all the changes at corporate level over the years, Coles
has always been tough with suppliers with the aim of getting the
best out of them, but are they unreasonable? No.’
Coles helping ACC grow has resulted in great returns in terms
of quality and consistency of product for Coles customers.
Around 70 per cent of beef produced in Australia is sold for
export, but because of its relationship with Coles, instead of ACC
shopping around to sell its best meat to various customers, or
rather than Coles having to negotiate with various suppliers only
after overseas sales are finalised, Coles gets the best each time
and every time. ‘Our relationship is like a marriage. There are
ups and downs but in the end, by working together, everyone
benefits. The retail environment is ever-changing but our
relationship is strong enough to change with it. Food safety has
become a priority and people want to know that quality is high
all the time. In the past, we’d deliver a carcass to Coles, and
their butchery team members would cut up the meat, prepare
110
1.
In 2008, refreshed attention was given to logistics and distribution in a quest to transform the company’s
supply chain. The renewed supply chain improved the way goods were sent to stores, meaning fresher
products and the right goods on the shelves when and where customers wanted them.
2.
Ian McLeod was appointed as Coles’ managing director in May 2008 and immediately set to work
initiating a turnaround program, hoping to restore Coles to its former glory and repay Wesfarmers’ faith
in the business. Photo: Jesse Marlow, Fairfax Syndication.
3.
Wesfarmers’ Managing Director Richard Goyder was determined for Coles to return to its previous
standing within the Australian community.
4.
The operations of Australian Country Choice, Brisbane – beef supplier to Coles since the 1970s.
it and pack it themselves, which led to inconsistency and high
costs across 740 stores. Now we do all that for them, controlling
specification, freshness and hygiene, and we do it because we
all see it’s best for the end customer.’
Trevor and his crew have seen management changes come
and go, but after the Wesfarmers takeover, he could really see a
perceptible difference. ‘The change started almost immediately
in 2008. We have been around Coles people for four decades
now, and the tremendous pride evident in their team members
these days as opposed to what it was like ten years ago is
wonderful to see.’
2000–200
8*
Sales:
$22.5 billi
on – $17 b
illion*
Profit:
$483 milli
on – $475
million*
Stores:
1260 – 22
31
*Includes
the per
2007 to Ju iod Nov 23,
n 30, 2008
.
1.
Remember when...
2000 – Sydney hosts the Games of the XXVII
Olympiad, widely acknowledged as the best ever.
2001– The face of Australia is changing, with
about one fifth of the population born overseas.
2.
3.
2001 – Sir Donald Bradman, Australia’s most
famous cricketer, dies at the age of ninety-two.
2002 – Eighty-eight Australians are killed by
terrorist bombs in Bali.
2003 – Australia joins the USA in the war in Iraq.
2004 – Qantas launches its discount domestic
airline Jetstar in Melbourne and offers 100,000
discount seats at $29 one-way.
2006 – Melbourne hosts the Commonwealth
Games.
2006 – Amid the worst drought in a century, the
government slashes economic growth forecasts,
reflecting a slump in farm output. In January
PM John Howard declares water security to be
Australia’s biggest challenge.
2007 – Australia’s population reaches 21 million.
4.
2007 – Prime Minister Kevin Rudd signs
documents ratifying the Kyoto protocol on
climate change, reversing the previous
government’s policy.
2008 – Prime Minister Kevin Rudd formally
apologies to indigenous Australians and the
stolen generation in his famous ‘sorry’ speech.
2008 – Quentin Bryce is appointed as Australia’s
first female governor general.
2008 – Australia ends its combat operations
in Iraq.
2008 – The Apple iPhone arrives in Australia.
GRAEMEBESWICK
StoremanandFreshFoodJuggler
Since Graeme Beswick first began working at
Coles as a teenager, he has hand-unloaded
thousands of trucks, assessed the quality of
countless pieces of fruit and prepared millions of
bags of vegetables for the shop floor. His longevity
with Coles is not something he spends much
time contemplating, but after nearly fifty years of
service, it is an occasional source of amazement.
‘I started out at the Coles New World at Chadstone
Shopping Centre [Victoria] in October 1965 when I
was fourteen and a half years old. I went straight into
the fruit room, and my first job was to remove the
papers covering each of the apples that had been
delivered in those old wooden crates. Every apple was
wrapped in its own bit of paper so it took a while!
‘Back then, the fruit was all delivered loose, so
you’d have to juggle the pieces to bag it by weight,
prepare a ticket for it, click it off to seal the bag
then get it into the store. All the trucks had to be
hand-unloaded and the manager had the task of
setting prices, judging the quality of the produce,
sending it back if it wasn’t right and dealing with the
suppliers; centralised management didn’t really exist
back then. It was a really busy store and because
of all the manual labour, one day I counted thirty
people working in the produce section alone. You’d
never see that today because now there’s prebagging, help yourself serving and self-checkouts.’
With busy stores came busy storerooms, especially
before the advent of centralised distribution. ‘A huge
truck would come in from the Coles warehouse
three times a week, but a smaller truck from Millers
would come every day; the produce in that truck
came straight from the farmers. It was hard work in
the storeroom in those days, but that was OK. We
had good tearooms to have breaks in, especially
after I moved to East Burwood in 1972, where
each division had their own room, and separate
ones for men and women. There was a huge urn
of tea that was always hot, and a tea lady to bring
cups around – that’s definitely a thing of the past!
But my old manager used to tell me that when
the Chadstone Coles New World was Dickens,
he’d deliver orders to people in a horse and cart
and I couldn’t believe it, so I guess there’s always
been change and I guess there always will be.’
Technological innovations such as conveyer belts,
forklifts, automatic pricing and barcodes have made
a huge difference to in-store efficiency, but it’s in the
area of safety that Graeme has noticed the biggest
shift. ‘Well, we didn’t even have safety in the sixties!
Guys would climb up the storage racks and walk
along looking for stuff, and there’d be falls all the
time. I remember you had to climb up a ladder onto
a little platform to access the stock, but there was
no railing and when the platform was full, you’d
have to squeeze by, always scared that you’d end
up meeting the floor unexpectedly; I reckon it took
three years to get that fixed. Even into the seventies
when centralised distribution started happening,
the height of our loading bay at East Burwood didn’t
suit the size of the trucks. They couldn’t fit onto
the ramps, so the driver would get the front wheels
up and we’d try to chock the back wheels with old
pallets. But if they didn’t take – and they often didn’t
– then the pallet would get spat out and we’d have
to try and jump clear. We knew the situation was a
bit stupid, but we just had to unload those trucks. It
was so much easier – and safer – once the ramps
were altered and concreted but it makes me shake
my head when I think of the way it used to be.’
The Coles Myer merger had very little effect on team
members at the store level, but Graeme has one
clear memory of that time. ‘The guy who was running
Coles back then was a bloke called Brian Quinn.
He created that massive deal, and he used to be
my store manager at East Burwood. He started as a
storeman and worked his way to the very top – and he
was the first one outside the Coles family to do so.’
Of course, Graeme knew that the Coles family owned
the business that paid his wages, but knowing that
didn’t affect his job. ‘Maybe being a family business
helped develop the family atmosphere in the place
or maybe it didn’t, but I started at such a young age,
and what I do know is that the people at work were
kind of like my second family. I do remember the
store manager at Chadstone saying that we always
needed to have Salada biscuits and orange juice
at the ready in case the big boss ever dropped in
with his wife, but that was probably the extent of the
Coles’ influence at store level. Everyone knew that
if the boss got Saladas and juice, you’d be right.’
After twenty years at East Burwood, Graeme moved
to the Prahran store and has been there for over
twenty years as well. Over almost fifty years, he
feels that there has always been a good atmosphere
in the company, with the exception of the period
between the late 1990s and early 2000s. ‘Before
the latest changes and the new management
started [post Wesfarmers’ takeover], I did feel a bit
uncertain about my job and the company. Lots of
people left and you could even feel it at store level.
Wesfarmers took a risk on Coles, I guess, but within
maybe six months things started looking up again.
There were meetings with the new management to
explain their plans for the future and I remember
Ian McLeod saying that in the UK, where he’s from,
up to 80 per cent of people shop in supermarkets
and it’s nowhere near that in Australia. He wanted
to make stores more inviting and give great deals
and you could just tell he was a supermarkets guy.’
I arrived early for my appointment with Graeme
at Prahran. He came to see me, easy to spot in his
fluorescent safety shirt and Coles cap. ‘I’ll just be
a few minutes – I just want to finish off unpacking
this load,’ he said. ‘I don’t like not getting
everything done before doing the next thing.’
Lots might have changed since 1965, but the
fundamentals probably haven’t. There are more
exotic types of fruit these days and a series of
technological advancements mean that the fruit
gets to the store without as many pickers and
packers, but the business is still about getting
the best food possible to as many people as
possible, and that suits Graeme just fine.
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