CHAPTER
SEVEN
a discount revolution
1970–1984
I
n the early seventies, Coles introduced a range of discounting
strategies, reinforcing the value it had been providing
customers for sixty years.
sold a large range of clothing and was well known for its colourful
cotton ‘frocks’ (as dresses were called back then), as well as its
great value children’s night-wear and underwear.
It was a time when convenience was becoming more important
to Australians, and fast food chains and a wider range of take
away food were become more prevalent. Yet at the same time,
more experimentation was taking place in home cooking as the
influence of migrants began to spread.
Coles also delivered two other Australian firsts in 1970 – a
quality control system, and care labels for all their garments. Of
course, these features are standard practice today, but in 1970
they were just another example of Coles putting quality and the
needs of customers first and giving them something no other
store was offering. Coles had focused on quality since the day
it opened its first shop; from the 1970s, with these innovations,
customers could always trust that the clothes they bought in
Coles would fit, would last and most importantly, offered the
best value.
The social and political environment was tense during this
period. The culmination of the Vietnam War, the dissolution of
parliament that included the dismissal of Prime Minister Gough
Whitlam, high inflation and unemployment all contributed to
making it an unsettling time for many people. Still, wide flares,
floral print ties and oversized trousers in all shades of brown
were probably some of the more disturbing aspects of the time.
Fitting innovations
Coles launched itself into the decade with a simple initiative
that made things so much easier for customers. Until this point,
clothing had been labelled with tags saying ‘SSW’ (slim, small
woman) ‘SW’ (small woman) and ‘W’ (woman), but in 1970
Coles developed the personal sizing system, using the standard
sizes 10, 12, 14 and so on instead. It was the first time that such
a sizing system had been available in Australia and customers
were delighted – finally, they could buy clothes off the rack
without necessarily having to try them on first. Back then, Coles
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Coles was as keen to develop its ‘own-brand’ food as it had for
its variety lines. To that end, the Farmland brand offered the
best quality food products at the lowest prices and included a
large range of food other than frozen goods. It became one of
Coles’ most successful lines and made the life of the ‘modern
housewife’ so much easier and affordable.
It was much simpler for retailers to sell frozen chickens than
fresh, and Coles’ employee magazine, Colesanco reported
that ‘No one had previously made a success of selling a
highly perishable fresh chicken on a national basis – frozen
chicken was far easier for packers, retailers, and customers
alike, to handle’.
Even so, Coles worked with its suppliers to develop a chicken
that was allowed to drain so that juices and blood disappeared,
eliminating the less appealing elements of fresh chicken. It was
then packed neatly on a tray and covered in film. Customers
loved it and Farmland fresh chicken became a popular addition
to the Farmland range.
Coles continued to introduce new Farmland products and
food technology began to play a very important role in the
brand’s development. Coles began to employ highly qualified
food technologists to ensure the best possible products were
available to satisfy increased customer demand.
In February 1973, Farmland released a four-pack of premium
quality beef pies that soon matched the market leaders in
popularity. Another new product introduced that month was a
first for the Australian grocery industry, when Coles began to
offer hermetically sealed coffee. Recognising the changes in
Australian society brought on by increased multiculturalism,
Coles was the first store to sell fresh coffee, rather than just the
powdered stuff in jars. Today, Coles is well known for its fair trade
tea and coffee introduced at no extra cost to customers.
‘Discount Day’ and a brave
new world
As the early seventies unfolded, Coles became more concerned
about the rising cost of living for the general population and began
looking at ways to combat it. By the end of the year, company
Coles launched its first fashion range in the late 1960s.
The photo next to this caption is of a model displaying
part of the 1971 range in Wollongong, NSW. The
liberated woman could get the latest and greatest
from all Coles stores and in the late 1970s, even men
could take their fashion up a notch. Fast forward to
September, 2011, when Coles launched its Mix range
of clothing and accessories, which offered customers a
fresh range of affordable clothing for the entire family,
with an emphasis on colour, fashion and quality.
directors had come to the conclusion that they needed to do
something drastic to counteract the increased competition from
a wide range of new food retailers, and offer their customers
even more. They began planning something that would affect
grocery marketing for years to come; the battle for the grocery
dollar was becoming more and more about value for money, a
concept that had been a foundation principle for Coles.
Coles had seen supermarket discounting in action in the USA,
and decided that Coles New World had to replicate the USA and
‘go discount’ as quickly as possible. Woolworths was planning a
similar move and Coles was determined to introduce its discount
program on January 11, 1971 – a week ahead of its archrival.
You have to remember that in the seventies, the only discounts
available to food shoppers came in the form of the ‘weekly
specials’. Overnight, Coles eliminated its weekly specials
program and replaced it with permanent reductions in grocery
prices; some 7000 grocery items were marked down and
gross profits were instantly reduced by two per cent. It was an
enormous risk for the food department of Coles to take but it did
so wholeheartedly.
The concept of broad, across-the-board discounting was
absolutely revolutionary in Australia, and when Coles introduced
it, they wanted it to have an impact. For the first time, Coles
hired an external advertising agency to run the military-style
advertising campaign co-ordinating Coles New World stores
Australia-wide to launch the program on ‘D-Day’ (Discount
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1.
Coles New World introduced its discount policy into all its supermarkets on ‘D-Day’ – January 11, 1971.
2.
Another Coles slogan that stuck!
3.
An early 1970s cartoon featuring the space imagery that was an essential part of the Coles New World branding.
4.
Coles New World in Moubray, Tas., opened on March 25, 1976 – one of the first Coles stores to be fitted with air-conditioning.
5.
Coles team members in 1971; check out those side burns!
6.
Quality control during the manufacture of Farmland biscuits in 1971.
7.
Coles New World in Epping, NSW, was one of the twenty-two new supermarkets opened by Coles in 1975.
8.
The coffee grinding department, Caringbah, NSW, 1973. Note the employee in the white coat, there to provide expert advice.
9.
On July 1, 1973, a new corporate identity was adopted. The red and orange logo was used in stores and offices and became the clear
symbol for Coles quality, service and value.
Day). The campaign popularised the slogan ‘It’s the total of the
tape [docket] that counts!’ and had the effect that Coles had
hoped for.
that customers wanted it. It made sense that customers could
buy everything they needed in the one shop. Most people liked
a glass of wine or beer with dinner and Coles made it possible.
Customers were delighted. The company started receiving
letters from housewives thanking Coles for its genuine attempt
to ‘attack the cost of living’, so while the program did cost Coles
profit, it also cemented the company in customers’ minds as
the best value supermarket. Coles continued its fight against
inflation throughout the early seventies; in December 1974, it
reduced the prices of twenty-three of the most commonly used
grocery items, and housewives rushed into supermarkets to
reap the benefits of Coles’ price-slashing bonanza.
In April 1971, Coles was granted its first Victorian liquor licence
and alcohol was made available for purchase for the first time
in Coles New World Warrnambool. Once the Board had decided
to sell liquor, Coles purchased the required licences at every
opportunity and even launched its own liquor label, Farmland
Cellars. After all, if you’re going to do something, you may as
well do it right!
Cheers!
Still, the last thing Coles was going to do as momentum increased
was relax and enjoy the ride. Instead, they began looking at new
ways to provide customers with the items they wanted and one
of the ways they did this was with liquor licences. When Coles
had taken over Dickens in 1958 and Matthews Thompson in
1960, they’d actually inherited a number of liquor licences as
well, but the Coles brothers had been brought up in a strict
Presbyterian household, and considered it inappropriate to sell
liquor in their stores.
But times had changed and the Board began easing the
company’s policy in this area. They recognised that other
retailers sold liquor, that it was profitable, and most importantly,
More please! What we were
eating in the early 1970s
With the influx of European migrants during
the 1950s and 1960s, Australians became
more adventurous in their food choices.
Garlic and other herbs and spices were
being used more and more, and women were
increasingly looking to labour saving devices
to prepare meals. Fruit and vegetables were
being combined in salads, BBQs were more
popular than ever, foil was used to bake
potatoes and real men began to eat quiche.
Sandwich-makers, fondue sets, crock-pots
and food processors could be found in many
modern 1970s kitchens.
Prawn cocktails were all the rage as the
perfect ‘starter’; this could be followed by
main courses of beef Wellington, chicken
Kiev, chicken Maryland or ham steak and
pineapple. Pavlova was a popular dessert
along with lemon meringue pie, chocolate
mousse, zabaglione and trifle.
1.
2.
3.
6.
4.
5.
7.
8.
9.
1.
A ‘Coles girl’ with her flashy new cash register, 1979.
2.
Staff recruitment brochure c. 1970.
3.
Making housewives happy was the aim of all Coles team members.
4.
The happiest of happy housewives! Dame Edna Everage in the Colesanco employee
magazine, 1971.
5.
A head office basketball match between the ‘Buying Office Beauties’ and ‘Accounts Adorable’,
1974. Just in case you were wondering, the Buying Office Beauties won.
In fifty-seven years Coles had rarely stood still, and they
weren’t about to start now. ‘Composite stores’, described as
‘the latest dimension in Coles retailing’, were launched at the
end of 1971 and combined supermarkets with a big range
of variety products within stores with selling areas ranging
from 15,000 to 25,000 square feet. The stores later became
known as ‘X’ stores, where the X stood for ‘extended variety
range’. Most of the new supermarkets opened in this era also
featured liquor departments. ‘Night filling’ was also introduced
into supermarkets for the first time, which meant that when
customers came to shop in the morning all the shelves had been
fully stocked overnight; they could get everything quickly and
easily, then get on with their day.
twelve months to September 1975. The managing director at
the time told the media that it was further proof that Australia
appreciated Coles’ policy of keeping prices as low as possible;
some of the supermarket specials Coles offered that month
included rump steak for $1.09 a pound, lettuces for 25 cents
each, onions at 48 cents for three pounds and legs of lamb for
72 cents a pound.
More produce, more jobs,
more automation
In the late 1970s and into the early 1980s, technology began
to influence business and household decision-making. Personal
computers were in their infancy by the early 1980s, and the
miracle of mobile phone technology was being realised, with incar ‘bricks’ now a reality.
Despite falling profits due to wage hikes being experienced right
across the country, Coles became Australia’s first ‘billionaire’
retailer by achieving sales of more than $1000 million in the
Did you know?
Housing design changed in the late 1970s and
into the 1980s to better suit an increasingly
informal Australian lifestyle. No longer were
separate, formal dining rooms all the rage,
and in many homes, the kitchen began to
be divided from the living / dining area by a
kitchen bench. And on many of those benches
could be seen the latest technological gadget
created to save time: the microwave oven had
arrived! This led to increased popularity of preprepared meals ready for microwaving, as well
as the reheating of last night’s left-overs.
In the five years from 1970, Coles had moved rapidly into the
modern age of data processing with more sophisticated stock
control systems, and it had developed a discounting program
that saw it celebrate great success. Meanwhile, the company
continued to promise quality goods at low prices, and continued
to base its operations on excellent customer service.
But not all was rosy within the variety division. During the midto late 1970s, Kmart was registering substantial profits, but
its administration was becoming more complicated. Coles’
relationship with the Kresge Company had become strained,
and although millions had been invested by both parties in the
joint venture, neither was entirely happy with the arrangement.
Kmart was rapidly usurping the position of the Coles
variety division, which continued to languish. There was no
sentimentality when it came to addressing the variety division’s
lack of profitability, and many underperforming stores were
closed in the late 1970s, making some long-term Coles
employees uncomfortable.
But just as it always had, Coles pushed on.
Way back in 1923, Coles had opened its first variety goods
distribution centre – or warehouse as it was then called – and
the company’s first grocery warehouse was operational in
Melbourne from 1958. But things had come a long way by the
1970s. Stocking the shelves of Coles’ ever-expanding stores was
made easier by its modern, large-scaled distribution centres
(DCs), symbolised by Coles’ new Sydney DC in West Guildford,
which opened in January 1972. Located 21 kilometres west of
Sydney, it provided employment for 260 people and was the
largest building project ever undertaken by the company. The
16-acre centre was designed to provide warehouse facilities for
all the NSW and ACT variety stores, supermarkets and Kmarts.
Before it opened, warehousing in NSW had been somewhat
fragmented, with seven locations around the Sydney area. This
investment in the future was a significant one as the company
strived to improve the speed, efficiency and cost effectiveness
with which it got products into store.
It was also in this era that Coles also began looking into EDP
(Electronic Data Processing), as once the decision had been
made to embrace technology, Coles was determined to make it
happen, quickly. Only two people worked in EDP in 1973; by the
early 1980s there were more than one hundred.
1.
2.
Cyclone Tracy
3.
4.
5.
Coles’ whirlwind price cuts and excitement
surrounding the opening of the Darwin store
were temporarily forgotten when Cyclone
Tracy hit Darwin on Christmas Day 1974.
Australians were shocked by the havoc caused
by the wind gusts of over 300 kilometres
per hour. Sixty-six people died in the horror,
thousands more were left homeless and most
of the city’s buildings were destroyed. Coles’
Stores No. 8 and 404, both in Casuarina,
were wrecked and immediately closed; they
were unable to re-open for nine months.
On January 3, 1975, Coles Managing Director
Norman Coles flew to Darwin on the first
non-government flight available. The navy
had been called in to clear rotting food from
the supermarkets as their cool rooms became
temporary morgues. Fixtures and fittings
and all Coles employees’ houses except one,
had been totally destroyed; fortunately no
employees were injured.
Norman Coles was known for his compassion
and was moved by the carnage he saw on his
arrival. He had initiated a tax-free relief fund
for Coles’ Darwin employees from December
31, 1974, and was determined no expense
would be spared to help Tracy’s victims. A
trust fund was established and $28,240.42
was raised from donations from all around
Australia. Thousands of people were
evacuated from the stricken city, with some
never to return. Darwin was eventually rebuilt
and became a young, vibrant city once more,
with Coles providing food to its people out of
temporary facilities within a few months.
GROWTH HIGHLIGHTS, 1981 1982
1981
JUNE: Acquisition of over 90 per cent of the issued share
capital of the business Fays, which trades in seventy-one
stores, principally in NSW.
On the same day that the Fays deal is finalised, Coles also
announces its acquisition of liquor chain Claude Fay Cellars,
also based in NSW. The purchase consists of fifty-four liquor
stores and their respective spirit licences.
But in order to keep the ever-expanding chain of Coles
supermarkets and outlets stocked, efficiently run and managed
so that customers could get what they wanted, when they
wanted, a greater emphasis needed to be placed on logistics.
Supermarkets were carrying more and more items, so the
management of stock had become more complex. The DCs and
stores had begun to incorporate computer technology into their
workings in the late 1970s but until then, products had to have
individual price tags applied – mostly at the store level. It wasn’t
until bar codes began to appear on products in the early eighties
that DCs could expand the product ranges they carried. By the
mid-1980s, DCs operated around the clock and often seven
days per week.
Supplying Tasmanian stores with adequate stock caused some
difficulties and Coles was forced to adopt a new means of
transport – airfreighting. By the late 1970s, some items were
being airfreighted from Melbourne to the Apple Isle. However,
due to frequent shipping delays, to make sure Tasmanians had
access to the range and quality they deserved, all products were
airfreighted from 1982.
80
Fays
Edward Fay and his wife opened their first shoe
store in 1896 in Pitt Street Sydney. Edward Fay
had frequently stated that ‘a business could only
be built on integrity’. Like Coles, the business
had operated with a money-back guarantee, so
their culture fitted perfectly.
Coles also faced freighting problems to the Northern Territory
and a solution was found in road trains – transport vehicles
that had two or three semitrailer vans hitched together, which
proved to be the most economical method of transport to
Coles’ Darwin stores. By 1981, Coles and Kmart road trains
had become familiar sights on roads and highways between
Alice Springs and Darwin. During Easter 1983, the company
sent one full load to Darwin filled with nothing but chocolate
Easter eggs! The following year when road and rail links were
cut due to severe flooding, Coles airfreighted ten tonnes of fresh
food and groceries to the Alice Springs supermarkets so that
customers could continue to shop with the range they’d become
accustomed to.
The new fruit and vegetable DC that opened in Canningvale
in WA in early 1984 featured cool rooms, which maximised
perishables storage. Produce suppliers provided stock to Coles’
specifications, crops were harvested late in the afternoon,
delivered to the DC the same evening and to the supermarkets
the next morning. The system ensured customers received the
best quality and freshest produce available.
Coles acquires Liquorland and its fourteen licensed stores in
NSW. By this time, the company has no qualms about selling
liquor, in contrast to the early decades when it had decided
against liquor retailing due to the Coles’ brothers long-held
religious beliefs.
Specialty chains
By 1977 it had become obvious that the administrative
arrangements between Coles and Kmart Corporation USA
weren’t working, so Coles took matters into its own hands. On
October 19, 1978, the reorganisation of Kmart (Australia) to
make it a wholly owned subsidiary of Coles was finally ratified:
the company’s massive investment in Kmart was paying off and
its destiny now finally lay in Coles’ own hands. The reorganisation
was regarded as one of the company’s greatest achievements
and positioned Coles as the leading retailer in Australia.
Fuelled by cheap bank loans and high spending in the Australian
economy, the Australian business community initiated a period
of expansion and diversification through the mid-1980s. Coles
got in on the act from the early 1980s, but didn’t stretch itself
beyond its core capabilities as many other overly-optimistic
Australian businesses did.
Instead, the company embarked on a quest to acquire smaller,
specialty chains on the edge of Coles’ retail experience, starting
1982
OCTOBER: Acquisition of eighty-two Ezywalkin’ footwear
outlets across four states.
Ezywalkin’
OCTOBER: Acquisition of fourteen Target supermarkets in
Western Australia and Victoria from Myer. The stores are
quickly rebranded as Coles outlets and achieve immediate
success.
Ezywalkin’ was a chain established in Fremantle
in the 1890s by WD Cookes and brothers TO
and FO Gaze. Its early history had many parallels
with Coles. Both firms were among the earliest
to establish employee share schemes, both were
family companies, both were cash businesses and
both offered quality at the lowest possible prices.
with the shoe retailer, Edward Fay (Fays), then following
up with a number of others to strengthen Coles’ position in
the marketplace.
With the various acquisitions bedded down, Coles integrated all
its liquor interests under the one name, Liquorland, in 1982.
The new business operated two distinct brands of stores – the
core brand of Liquorland and a more sophisticated one called
Vintage Cellars – and marketed a range of private label products
including Pleasant Valley, St Andrews Estate, Heather Mist,
Suter Home and Lachlan Ridge labels.
It may appear that everything that Coles touched turned to gold
during their one hundred–year history, but the company has
always been willing to take calculated risks, and sometimes, they
didn’t work out. In November 1982, Coles established a chain
of hypermarkets, Super Kmart. They were a hybrid of Kmarts
and supermarkets, but the concept wasn’t a success because
economies of scale were simply not big enough to support such
large stores with such diverse ranges.
In September 1983, Coles embarked on another new concept
for the company – creating a specialty fashion chain called
Look Alive. The chain sold a range of men’s, women’s and
children’s wear together with selected manchester items. The
stores were aimed at a market segment somewhere between
discount houses and traditional department stores, but with
limited buying power and knowledge in the industry, the concept
only survived for two years and there were only ever two
Victorian stores.
At the same time, Coles began a 50-50 joint venture with Norgen
Vaaz to open ice cream outlets in selected stores. Coles’ flagship
variety Bourke Street store was considered the ideal venue for
selling the popular ice cream, promoted as the ‘world’s best’.
The concept proved to be inappropriate for Coles and was sold
to Rowntree just three years later.
But suffering disappointments is a risk of trying new things and
Coles continued to get more things right than wrong during this
period in its history.
Healthy communities
Since its foundation, Coles had regularly supported many
charities, but had preferred to do so with no fuss or fanfare.
This began to change in the 1980s, when the company was
keen to dispel some of the myths surrounding ‘big business’ and
show that Coles was a caring and responsible corporate citizen.
On November 27, 1981, the Coles Fountain in Melbourne was
officially opened by Victorian Premier Lindsay Thompson. The
stainless steel fountain located in Parliament Gardens was a
$500,000 gift from Coles to the people of Victoria in recognition
and appreciation of the support the company had received from
the Victorian public since the firm was founded.
In 1981, the ‘Year of the Disabled’, Neil McKay, Assistant
Manager at Coles Colac supermarket, designed a special
trolley to accommodate either disabled people or twin
children. His prototype was later modified and introduced into
selected supermarkets. Car parking for disabled people was
also made available that year, eight years before it became a
legal requirement.
81
1.
3.
2.2.
1.
Exterior of the Sydney warehouse, 1972.
2.
The Coles Fountain. A gift from Coles to the people of Victoria, the fountain in Parliament
Reserve Gardens was opened in 1981. It is unusual because you can walk inside the curtains of
cascading water – a pleasant experience on a hot Melbourne day.
3.
The Perth Distribution Centre in Canning Vale, consisted of 46,000 square metres under
one roof and was the largest warehouse in Western Australia. By 1982 Coles had more than
350,000 square metres of DC floor space nationally.
4.
The new Sydney warehouse in West Guildford, 1972. It is the largest building project ever
undertaken by Coles to that date.
5.
Coles’ No Added Salt and Low Sodium range, January 1984.
6.
Store ordering systems were managed electronically from 1979. The company’s investment
in technology increased during the early 1980s, both in the purchase of equipment and the
training of employees to operate it. By then, 102 people worked in Coles’ data processing area
compared with just two in 1973.
7.
Katies had been established in 1954 in Adelaide, and by 1984 had stores in all states. It was
run by partners and friends Joseph Brender and Stan Moss. Brender had been supplying Coles
through one of his manufacturing businesses and was considered an astute merchant. Coles’
buyout resulted in the company taking control of 117 Katies stores and 1000 employees.
8.
When he died, Coles’ formidable founder Sir George left behind a significant legacy with a
company that was not only a commercially successful enterprise, but also one with high values
and an entrenched philosophy of community service.
4.
Sir George Coles
1885–1977
5.
7.
6.
8.
Coles’ founder Sir George Coles died on
December 4, 1977, at the age of ninetytwo. He had been in the business for over
sixty-two years and had served on the Board
for forty-two of those years. In fact, he had
only retired from the Board one year prior to
his death. A memorial service was held on
December 14, 1977 at St Paul’s Cathedral
in Melbourne, the site of his grandfather’s
marriage in 1854. He had been awarded the
CBE in 1942 and was knighted in 1957 for
services to commerce and the community.
For many years he was vice chairman of the
National Bank of Australia Ltd and during the
late thirties and early forties he was president
of Melbourne’s Alfred Hospital. He was also
actively involved in the work of St John’s
Church of England, Toorak and was a member
of the Corps of Commissionaires. His passing
was an emotional time for Coles and the
wider Australian business community.
His legacy, however, lives on.
Product and packaging innovations continued in November
1981, when the Plain Wrap label was launched. Plain Wrap
offered an extensive range of generic grocery items designed
to provide considerable savings to consumers while still
maintaining acceptable quality standards. Within a year of Plain
Wrap’s launch, Coles retailed 240 items under the label and
sales exceeded $1 million per week, representing 5 per cent of
total grocery sales. In October 1982, the Sydney Morning Herald
reported that ‘generics are revolutionising shopping in Australia’.
Almost a decade later, on February 4, 1990, Plain Wrap was
relaunched as Coles’ Savings brand with the slogan, ‘Really
good products. Really low prices’.
In response to demands for ever-healthier eating options,
in 1983 Farmland launched an innovative ‘No Added Salt’
range. The range was packaged with predominantly white
labels to emphasize the purity of the line, and response from
trade, professional and public media was excellent. The
Heart Foundation and medical professions were particularly
impressed. Following from the success of the range, Farmland
developed a ‘No Added Sugar’ product range as well. In a
continuing quest to provide better service to its many customers,
Coles also pioneered the detailing of nutritional information on
the labels of these products – many years ahead of any other
retailer. Other manufacturers eventually followed Farmland’s
lead and introduced similar products.
Throughout the eighties, the company continued to look at
ways of improving its goods and services, including opening
its first experimental hot bread kitchens in some New Worlds.
In February 1983, Liquorland launched an additional range of
wines under its award-winning Pleasant Valley label, including
riesling, claret and spumante. In March, plastic bags for
supermarkets were introduced, replacing paper bags. Of course,
in these more environmentally conscious times, most customers
use reusable polypropylene ‘green bags’ that are able to be used
over and over again and, like plastic bags, can now be recycled
at Coles.
By the close of 1982, Coles held 21 per cent of the nations’ total
food market, and it was time to upgrade technology to better
serve all those customers. To do that, Coles introduced the
first pilot electronic scanning system in its Doncaster, Victoria,
supermarket on September 27, 1982. Wary Coles customers,
unused to seeing goods with bar codes rather than price
stickers, were told that scanning registers offered them faster
and more accurate checkout operation and would, for the first
time, provide customers with a detailed docket itemising all
purchases. Retailers benefited from improved stock control and
increased ability to measure the effect of advertising campaigns.
The fact that the system was able to evaluate new products,
identify slow-moving lines and monitor the success of items by
geographical locations was just the icing on the cake.
Bar codes and scanning also achieved a great deal at store level
because it made price marking redundant. Previously Coles had
to send out memos to stores every time there was a price change,
which team members would then have to mark up manually.
Supermarkets could be given five or six hundred price changes
a week, taking up significant amounts of employees’ time.
Seventy years and counting
The year 1984 marked the seventieth anniversary of the
company and Coles continued to look for new expansion
opportunities, particularly in specialty chains. In August 1984,
Coles approached Joseph Brender, Managing Director of the
Katies fashion chain, ultimately paying $46.8 million for goodwill
and net assets. Katies was considered to be a world leader when
it came to computerised merchandising and accounting control
systems and Coles was well aware it would be able to learn from
their success in these areas.
By the end of 1984 Coles was Australia’s number one retailer
in terms of sales and profits and the second largest employer
in Australia. It was led by a strong, young and energetic
management team, open to the increasing range of innovative
technologies that could assist in the company’s success. By
now, Coles had launched a number of private labels and had
invested in a range of specialty retailing chains that saw great
expansion Australia-wide. Warehouses had become massive,
efficiently run distribution centres, as every component of
Coles’ operations was continually examined and adjusted using
advanced technology. Customers were walking through Colesowned retail outlets in their droves, enjoying the vast range and
quality the stores offered.
But that’s far from the end of the story. With confidence at an
all-time high, the company decided to launch an audacious
takeover bid that would fundamentally change and challenge
the organisation for decades to come.
83
Tags to barcodes
Kimball tags were the forerunners of
today’s barcodes. Coles had originally seen
the automated stock control system on one
of its many overseas study trips to the US,
and adapted the system to suit the needs
of Australians.
Kimball tags were placed on each item in
the store; the little holes punched into the
labels provided information about stock
levels, what did and didn’t sell, and what
customers wanted most. All the information
on the tags was punched into the early
computers used by Coles. When customers
bought a product, the tag was removed and
then sent in to head office and fed into a
computer, allowing Coles’ buying team to
make informed decisions about best sellers
and market trends. The system was an
essential part of the centralised inventory
system used in Coles by the mid-1970s.
In 1976 Coles introduced computerised
ordering equipment, which enabled the
first New World to go online in October
1976. Following this, the first electronic
scanners were introduced into stores in
1982, giving customers a printed receipt
itemising all their purchases for the first
time ever. Today of course, self-scanning
means customers can choose to scan and
then pay for their purchases themselves
without queuing at the checkout, but in the
seventies ladies at the checkout needed to
be quick with their mathematics!
1970–198
4
Sales:
$383 milli
on – $5 b
illion
Profit:
$10 millio
n – $104 m
Stores:
559 – 893
illion
Remember when…
1970 – Seatbelts become compulsory in cars.
1971 – Australia’s combat role in Vietnam ends.
1972 – Australia moves from Farenheit to Celsius for
temperature measurement.
1972 – Gough Whitlam leads the Australian Labor
Party to victory, with the slogan ‘It’s time’.
1973 – The White Australia Policy (established in
1901) is officially dismantled.
1973 – Queen Elizabeth II officially opens the
Sydney Opera House.
1978 – China adopts its one-child policy.
1980 – The first Australian IVF baby is born.
1980 – Pac-man, the best selling arcade game of all
time, is released.
1981 – A Country Practice debuts on Channel 7.
1982 – The Commodore 64 PC is released. Sony
launches the first compact disc player and Michael
Jackon releases Thriller, the biggest selling album of
all time.
1983 – The Australian dollar is floated; Australian
banks are deregulated the year after.
1984 – The Apple Macintosh computer is released.
BRENDAPALMER
Forty-fiveShortYearsofService
Brenda Palmer started work at Coles Malvern on
July 19, 1967, and has worked there ever since.
She is one of the longest-serving employees in
the company and the only team member to have
spent her entire career in the same store.
It all began when Brenda saw an advertisement for
a new Coles store on the corner of Glenferrie Road
and Winter Street in Malvern. Coles was advertising
for part time employees and as Brenda’s children
were growing up, she decided it was time to get
back into the work force. She has vivid memories of
the day the store opened. ‘It all sort of passed in a
dream because we were so busy to the extent that
the shop was absolutely full: they had to close the
doors and only open them to let people out. Only
when enough had squeezed out would we open the
doors again for people to come in. It was incredible.’
The store was one of the many in that era that featured
the Coles Rocket on the store façade. ‘The rocket was
up there and we could see it from inside the tearoom.
It was a ‘new world of shopping’ with everything
under the one roof and it was a huge success. You
could buy a frock here, you could buy knitting wool
– you could buy almost whatever you wanted!’
Brenda started off in the deli and eventually became a
full time checkout operator. ‘It was beautiful, our deli.
We use to cut all our own bacon and made our own
potato salad. We would boil up potatoes and use the
salad each day. And we made all our own coleslaw;
the dressing used to come in these big jars I could
hardly open! We used to bake all own potatoes when
we first got the rotisserie and we also sold fresh fish
as well; on Easter weekend, customers would be four
and five deep. We used to have boxes and boxes
of cod at the back and it was just so busy because
we sold such good fish at such a cheap price.
‘Coles was known to be the cheapest, and the quality
was always good – always, always good; the bosses
insisted on good quality. Service is paramount with
Coles, too. It’s one of the things that has always
been really important, and it was taught to us right
from our first day. And you know, even in the old
days, the quality of Coles’ products was really high
– from saucepans to apples, it didn’t matter.’
Store operations have changed greatly since the
1960s and Brenda can recall the days before
phones, when the checkout employees used bells
to communicate with the managers. ‘There was a
three-bell system. Every register had a bell and you
would ring it once for a price or change, twice for a
packer – in those days we had packers nearly all the
time – and three times if you wanted another register
opened. Those bells were the sound of Coles.’
During the 1970s Brenda took on the role of matron
within the Malvern supermarket, which involved
looking after the staff room and preparing morning
and afternoon teas for the employees, as well as
cleaning the employees’ toilets. ‘I’d make sure
that the big pot of tea was there and that there
was fresh milk – and we didn’t even sell milk in
those days when I first started. We used to get
the milk from the milk bar as Coles didn’t have
a milk licence back then – can you imagine?’
Over the years Brenda has featured in numerous
Coles marketing campaigns and remembers many
of the slogans, such as ‘It’s the total of the tape
that counts’, which was used when Coles New
World went discount in 1971. Her favourite and the
one that means most to her is ‘It’s always cheaper
at Coles’. ‘Some days there’ll be a customer say,
“Oh, is that all we pay?” and I say, “Oh well, you
know, it’s always cheaper at Coles!” I still use it.’
The biggest change Brenda has witnessed has
been the introduction of barcodes and scanning,
which simplified the onerous work of the checkout
operator of days gone by and sped up the purchasing
process for customers. ‘Barcodes made such a vast
difference. Previously, products had to be taken out of
the box and be stamped before putting them on the
shelf. Then when a customer brought an item to the
register, we used to have to read what price it was,
key it in on the register then put in the department
because all the grocery, the meat, the fruit and veg,
apparel and any others all had to come under different
categories; there used to be different register keys for
all the different departments. It was a lot of work
for a cashier. And a lot of people think, “Oh yes,
she’s a checkout chick, it’s quite easy”, but it’s far
from that. And I’d say that EFTPOS was the next
biggest innovation after barcodes. Before then we’d
often have to process cheques, which took ages.’
Brenda believes there will be a role for checkout
operators and personalised service for a while
yet. ‘In years to come, there may be no such
thing as a checkout chick, but I think it’ll be a
long way off, because there are some people
that just don’t like to ring through their own
purchases; they like the service of having it packed.
There are lots of customers that like that kind
of service – Coles provides the service people
want and we always do our best to meet that.’
Brenda remembers when the Coles family shopped
in her store, but she feels that in working for
Coles, the company has become her own family;
she’s never considered leaving. ‘It is a family
here and I know that if I was at home and I came
up here in distress, I would get all the help I
needed. It’s just such a good job and I think so
long as you do the right thing by them, they will
always do the right thing by you. You can’t ask
for anything else really, can you? I don’t need
to work anymore; I come to work because I like
it. It is a good place to work – I’m proof of it!’
87