Coles and Kmart leaders start turnaround

There is little doubt that the cultural transition within both Coles and Kmart under Wesfarmers leadership was going to take time to translate to shopper experience, however this week’s results are pointing to a faster than expected change.

Let’s be clear. The culture of the leadership teams within Wesfarmers and Woolworths Group today is very similar.

They both genuinely believe in a high performance meritocracy and a legacy of leadership, promoting good people from within. They are both passionate about providing their shoppers and customers with best-quality experience at best-possible prices. They are both linked into global best-practice adoption and, in cases, global best-practice leadership. Both teams are lead by a mix of talented retailers and manufacturers.

Two years ago this wasn’t the case – the Coles Group was a very different animal and Woolworths Group was streets ahead.

In the Wesfarmers retail stable, the past six months have been a bumpy and challenging road for Coles and Kmart stakeholders. And necessarily so, as they have come to terms with Ian McLeod and Guy Russo’s shaping of a new culture to deliver a much improved shopper experience.

This has all happened against a retail backdrop of strong financial performances from Target, led by Launa Inman, and Bunnings, under the office of John Gillam. The success of these retailers had been delivered, quite simply, by great shopper experience.

This week’s Wesfarmers results show that McLeod’s Coles has started to turn the corner far more quickly than many anticipated. Russo’s blunt and honest assessment of where Kmart is – or more importantly wasn’t – in shoppers minds is indicator of the strength we can expect in the future.

It was always evident from the culture of Wesfarmers and the calibre and track record of the leaders already within it that when the hand-picked group of successful “newbies” joined, the cocktail was going to deliver some serious results.

Michael Luscombe’s core team at Woolworths, like the core of Richard Goyder’s Wesfarmers’ team, is seriously good, and has been together for some time. Luscombe’s are proven, culturally aligned and successful; Goyder’s new enlarged team needed to, and is, forming under fire very fast.

But what does this all mean to the Australian and New Zealand shopper?

Most people view the two strong players in one market as a cause for concern. I disagree. The genuine competition we are now seeing between these two more equally matched retail groups will only translate to the shopper as even more innovative store formats, a real increase in service and, ultimately, a world class shopper experience… at the best price.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.

Click here for more Retail Trends blogs.