A goodbye to Woolworths

Woolworths was the meeting point. For almost a decade, a bunch of growing kids would congregate outside the polished shiny metal-framed retractable doors of the Kidderminster branch of Woolworths. Our Saturdays were spent flicking though vinyl records, games for the Atari and Spectrum and playing with the new gadgets from regimented rows of stalls on the shop floor.

If we were feeling flush, we’d run up the escalators to the second floor to buy a cup of the worst tasting coffee on the planet. And if a parent happened to stray by, we’d sting them for an insipid strawberry milkshake or a lifeless coca cola in a plastic cup.

So for me, the demise of Woolworths was as much the commemoration of adolescence as it was a reflection of the Made-in-the-USA downturn.

Yet as the respected New York Venture Capitalist, Fred Wilson writes on his blog, whilst the downturn is the main cause of many of the recent business failures, something more fundamental is happening:

“Clearly the economic downturn is the direct cause of most of these failures but I believe it is the straw that broke the camel’s back in most cases. The internet, now closing in on 15 years old in its mainstream incarnation as the world wide web, is in many cases the underlying cause of these business failures. Bits of information flowing over a wire (or through the air) are just more efficient than physical infrastructure”

People stopped buying records and video games in Woolies years ago. Gone went the Kodak instamatic cameras at affordable prices. News is read online. Globalised manufacturing ensured that the household appliances they used to source more efficiently than their competitors, stopped being the cheapest; undermined by the ability for anyone to send an email to a sales representative of a shipping firm in China.

Globalisation in a connected world did for Woolies. When my son is a teenager, his friends will arrange to meet online and share their music tastes before pressing the ‘buy’ button. They’ll discover the world from their shared trust in favourite web sites.

We are entering an era of profound and irreversible change to the way people choose to live their lives and organise the world around them.

And there isn’t a politician on the planet who is going to stop this.

17 comments ↓

#1 Tom Watson’s Christmas Message | DavePress on 12.28.08 at 1:46 pm

[...] Our Minister for Digital Engagement’s blog has a stark message: [...]

#2 SubtleBlade on 12.28.08 at 1:50 pm

Are these the first scrubby little shoots visible in the ‘real world’ of the proto-anarco-syndicalism that is the Internet’s default state?

#3 Mo on 12.28.08 at 2:04 pm

Honestly, my only concern is the amount of taxpayer’s money (as if we’re not spending it like it’s going out of fashion anyway) that Burnham will blow before realising how utterly hilarious his ideas are, even moreso when he talks of co-operation with the incoming Obama administration in the US over his censorship plans, and that’s without getting into the games rating system which, er, already exists and is in widespread use.

Woolworths is gone, and I doubt many people will miss it. The Internet did a lot to kill it, but I suspect Tesco, Asda and Sainsbury’s did a whole lot more—they sold everything Woolworths did, and they sold it in the convenient location that you already went to in order to do your regular shop. This had the secondary advantage of letting them make a loss on children’s clothes, electrical items and whatnot because the bottom line was buoyed by traditional item sales.

Even so, Amazon was probably Woolworths’ biggest single competitor, and I’m not convinced they ever actually realised it.

#4 Elaine Johnston on 12.28.08 at 2:33 pm

The internet as the killer blow? No,what did for Woolies was years of having no unique place in the market. We can bleat on about how much we miss it, and how fond our memories of it were, but the truth is it lost the plot, and shoppers’ cash, years ago. When was the last time you wanted something, and thought “Woolies will have that”? See?

No USP. Poor buying decisions. Shoddy sales space. Falling sales, plus rece things, but it’s not the killer blow.

#5 Drew Buddie on 12.28.08 at 3:07 pm

A beautifully written hmage a Woolies which could’ve been written about MY home town’s Woolies (in Motherwell) except that we didn’t have an upstairs.

One thing I will take issue with is your closing paragraph – some people cannot CHOOSE to purchase over the Internet – a digital divide is with us and the way I see things heading a digital underclass will exist who will have NO ability to make purchases over the Internet because they’ll have no credit card or no Internet. When/if Zavvi & HMV go, where will my elderly parents be able to buy me ‘Fleet Foxes’ top reviewed album from? Not from Tescos.

#6 iain ker on 12.28.08 at 4:26 pm

the Made-in-the-USA downturn.
—————————–

Nice – keep toeing the party line, meanwhile out here (in the real world) no-one believes it.

#7 Podnosh Blog » Archive » Why doesn’t government have reservists? on 12.28.08 at 4:50 pm

[...] role of government is going to change.  As individuals find it easier to collaborate and solve problems, traditional government [...]

#8 Ed Hart on 12.28.08 at 5:36 pm

Tom, you have put your finger on a key issue here – the world is changing around us, and so many of us are not keeping up. Whether its the internet, our social values, or what is deemed to be worth measuring in pupil’s abilities at school this year, there is a sense of change with few leaders willing to project a concrete sense of being in control – is it too late? Maybe Pandora’s Box has already been opened, and no-one can do anything about it…

#9 Your Financial Business Support » Blog Archive » Change - it happens on 12.28.08 at 5:43 pm

[...] http://www.tom-watson.co.uk/2008/12/a-goodbye-to-woolworths/ [...]

#10 Paul on 12.28.08 at 9:27 pm

I walked into Woolies for the first time in years recently and it struck me that nearly everything sold in there could be bought far cheaper in other high street shops.

When Theo Paphitis backs out of buying it, you know that something must be up with the business!

Personally, i hope a buyer can still be found to take over the remaining viable stores in the next few weeks, as this may halt further job losses.

At this stage, I expect that any interest will now purely be in the locational value of many of the stores, rather than the actual business itself, though. Hopefully, they won’t all be turned into Sainsbury’s and Tesco Extra stores!

#11 Miller 2.0 on 12.28.08 at 10:06 pm

Very insightful Tom. Hopefully the left can respond by shaping inevitable change rather than trying outright to stop it happening. Calls to nationalise Woolies etc. are silly. Different for the banks etc. If we’re going to do something like it (e.g. Jaguar), reform is a must. These people are producing too many commodities for which there is no demand. Fact.

At the same time though, there’s a need to protect existing services which still receive significant public uptake and are essential to life and the remaining physical infrastructure.

#12 leety on 12.29.08 at 4:16 am

So sad to see woolies go, i felt guilty buying the sale stuff but felt my little bit might help them get some money back.Every time i went in i would shed a little tear and wish the staff good luck. I will realy miss the lady bird clothes as i struggle to get clothes to fit my 4 yr old whos as tall as a 7 yr old

#13 Tom on 12.29.08 at 10:12 am

Thanks all for your comments, as ever. I can remember buying “Can’t stand losing you” by the Police and running all the way home to play it on a thing called a record player like it was yesterday.

Miller 2.0 Good point. The whole issue for believers in a responsive state is to use these new tools to help shape services that citizens need/want. We can start by taking appropriate services to where they meet online, rather than expecting citizens to come to Government. The Victorians didn’t build town halls in the middle of nowhere after all.

Drew – Take your point though I’m a bit more optimistic than you. When Labour were elected in 1997 there was 0% broadband connectivity in the home. Last time I checked it was sixty odd per cent and three out of four people say they’ve used the Net. That still means that government services should have a multi-channel delivery (apologies for jargon). It also means we need to use the levers to encourage take-up to increase at a faster pace. If we get up to 80 or 90 pecent broadband connectivity, things will really take off.

#14 Letters From A Tory on 12.29.08 at 10:23 am

Companies like Woolworths have been on their knees for years, waiting for someone to put them out of their misery.

The problem is that a lot of companies only survived in the good times because they were good times. Many of the impending casualties were doomed to fail years ago.

http://www.lettersfromatory.com

#15 Good Lord! on 12.29.08 at 12:26 pm

[...] Now this is a bit of a surprise. [...]

#16 tim f on 12.29.08 at 6:11 pm

I’m sorry that workers at Woollies have lost their jobs, but I won’t miss it as a shop.

I can only once or twice remember being taken there when the cheaper Argos or Index had run out of whatever it was my mum was looking for. I was never allowed to get sweets from the pic’n’mix because we could get the same sweets cheaper at corner shops. And as an adult I’ve never shopped there.

Perhaps we could nationalise them and turn them into state-of-the-art youth clubs/polyclinics/GP Health Centres/libraries/community centres/communal recording studio facilities? :p

#17 bupendra bhakta on 12.29.08 at 7:35 pm

I don’t really get Fred Wilson’s piece – it would not have been particularly prescient if it had been written a decade ago.

In the UK when we had a credit-supercharged consumer spraying money around a retailer didn’t have to be particularly good to survive. Now that the UK credit-bubble has bust, I’m afraid it will take a lot of retailers with it.

Theo Paphitis said it right the other day – no-one owes retailers a living.

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