Tuesday 23 January 2007
I read with interest today a letter from Woolworths that is doing the rounds of the Internet, where they have promised to donate all profits from sales on Tuesday 23 January 2007 to the drought-stricken farmers in Australia. The estimate donation is around $3M Australian.
While I have no problem with this gesture, I am wondering why Woolworths needs to promote the day as one to shop at Woolworths to assist the donation of profits for the day. If you took $3M a day profit as a close figure for 7 days of trading then you would arrive at $3M x 7 x 52 weeks or alternatively, $3M x 365 or 366 days. When you look at the profit figures over a 12 month period, based on that $3M estimate, it’s easy for me to wonder why Woolworths think donating one day’s profits is a big deal, and why they need to motivate people to shop that day in order to reach that goal of $3M is beyond me.
One has only to think about the price of lamb from Woolworths, as an example. How much is the farmer paid for his lambs per kilo in comparison with the price Woolworths charge us per kilo? Sure they prepare the meat so it looks nice in it’s packaging, trim off most of the fat and daggy ends. But how much profit are they making on a lamb? It doesn’t take much grey stuff upstairs to work out the margin is extremely one sided, and the one side isn’t the farmer’s. No matter what food you look at that our farmers provide to Woolworths, you see glaringly before you that Woolworths are one of the big reasons our farmers are in such dire straits. They forced most of the smaller retailers out of the game and have a monopoly. They made sure that the consumer saw how beneficial it was to shop under one roof for all the food they require weekly, and cleverly managed to promote this over and above the extra costs involved in more expensive food. Consumers just accept the extra they pay for the convenience of being able to park close to the store, buy everything in the one store, and only go through one checkout.
If only people would start to think about how lazy they have become and how easily they have made retailers like Woolworths into giants at the cost of the small guy we all loved who was our friend and butcher, baker, greengrocer etc.
Personally, I choose to buy my meat from a butcher who is not in a shopping centre. I pay $8.00 kilo for Porterhouse steak that would cost me upwards of $16.00 kilo in Woolworths. The meat from this butcher is outstanding quality and he has many sizes of packages of meat that you can buy in bulk. He will then cut it how you want it cut. And I repeat this meat is half the price of Woolworths!
I also visit a Fruit Market off a local highway near home. The price of fruit and vegetables there is a fraction of what I pay at Woolworths and other supermarkets, and it’s also a lot fresher as well. This is a huge fruit market that now has a large butcher shop incorporated inside. This isn’t where I buy much meat, but it is still cheaper than Woolworths while being slightly dearer than my first choice butcher. The fruit market sells a lot of other goods as well and in spite of the fact that it’s not air-conditioned and it has a concrete floor, the money saved and the sheer amount of fresh produce available, makes it a must place to shop.
I’m not knocking Woolworths for donating $3M to the farmers but it’s only a token amount compared to what they take from the farmers every day of every year. Let’s face it, Woolworths is a big company with a lot of shareholders and the most important thing to them is their bottom line profit. No doubt they are hoping that by promoting 23 January as the day to shop at Woolworths to assist the farmers, they will pass the $3M profit margin easily. They could double it, give away $3M and still come out even. Or am I just thinking negatively about a positive from a giant retailer?
I leave it to my readers to decide. If I have anything I need to buy on 23 January, I may well make the effort to travel to Woolworths to shop. On the other hand, I might not too!
Vena McGrath
©January 2007
