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The Cornerstone Strategy 1983/4

 

The Six Cornerstones of the short-lived original Paternoster strategy to recover Woolworths

Paternoster hired management consultants to take a long, hard look at their new acquisition and propose a new strategy for Woolworth UK. The result was the 'Cornerstone Strategy', a plan to re-shape the business for the 1980s. The Board made a particular point of sharing their plans widely with store personnel. The communication package included a video explanation from the Directors and a slideshow and speaker notes to be delivered by District Managers. The hard-hitting presentations were followed by discussion groups and a Q&A session.

The Chairman and Chief Executive, John Beckett, introduced the video. He explained that the High Street had modernised during the 1960s and 1970s, leaving Woolworth behind. Disposable incomes had risen. Two-thirds of shoppers had access to a car and had started to vote with their feet, travelling further afield to obtain the best value.

 

The large basement salesfloor of a City Centre Woolworth store in the 1980s includes, among other things a fully assembled greenhouse, offered for sale on interest-free credit. The picture was taken in 1983The Marketing Director, Colin Brown, explained that during a throrough review two options had been evaluated, either a 'single core' or a 'multi-core' strategy. The former, under which Woolworth would become a specialist and would offer just one product category, had been rejected as too risky. The Board felt it would not fit all the different sizes of store.

Instead a multi-core strategy had been chosen. Woolworth would thin its range and specialise in six 'cornerstones' or product categories. The offer would target "C1/C2" middle income shoppers, offering basic, good quality products at highly competitive prices. The company would drop its more 'aspirational', design-led lines. Prices would be lower, with more of the range costing £5 or less.

The strategy would suit stores of up to 20,000 square feet (1,858 m2). There would be extra categories for the fifty stores which were larger. As a first step, Brown announced an exercise to reduce clutter and clear old stock.

 

An entire large salesfloor of fashion in a Woolworth store in 1983 - apparel was intended to play a key part in the  cornerstone strategy
The Marketing Director went on to explain that four of the six cornerstones built on established strengths. The chain would develop its offer of DIY, Leisure and Play, Homewares and General Convenience. The remaining two elements would require more of a stretch, as Woolworth attempted to build improved ranges of Clothing and Daily Provisions.

 

Cabinet Makers' and Builders Hardware was the official name of Woolworths' substantial DIY range, which included a big range from Harrison Beacon

 

DIY built on an existing strength. At the time the chain enjoyed market leadership on hardware and tools, electrical accessories (principally from Astralec Industries and HH Electrical), paint (branded Cover Plus from Donald Macpherson and Company) and curtain track (from Harrison Drape).

Although out-of-town DIY stores were becoming popular (including Woolworth's own B&Q Supercentres), the majority of purchases were still made in the High Street. The cornerstone strategy would extend the range of tools and hardware and give it more space.

 

 

 

Signs for Ladies Blouses from "the '83 collection" - fashions for adults were intended to play a key part in Woolworths' revival under the chain's short-lived Cornerstone Strategy


A much bigger challenge would be to establish the company as a major fashion retailer. Attempts to break into 'Apparel' during the 1970s had not been very successful, with the company targeting designer-style fashion in the High Street and falling some way short of the offerings of Marks and Spencer and C&A.

The new goal was to concentrate on the basics, offering decent fashion at highly competitive prices. Woolworth would offer clothes for all the family. It was believed that the most difficult part would be to attract shoppers to a new range of babywear. Because of the risks, initially clothes for the the under fives would only be sold in the largest stores.

 

Entertainment, Toys and Sports were all part of the Leisure and Play offer in the cornerstone strategy

The Leisure and Play offer would build on an established strength. Woolworth, Woolco and the 50-strong Shoppers World catalogue shops, led the toy market and dominated fishing and darts. They also enjoyed a growing share of chart music. Each range would be expanded and given more space in-store.

The Record Department was considered a major growth area. The stores would give more space to tape cassettes, and would also introduce a computers and gaming section. Arrangements had been made to stock the top three home computers, the Sinclair Spectrum 48k, the Vic 20 and the Commodore 64. A selection of software and games would also be offered, which would also include applications to run on more specialist Acorn Electron and BBC Model B machines.

New, purpose-made fixtures would differentiate the Record Department.

 

The General Convenience section in Woolworths Bedford, which became a prototype for the chain's short-lived Cornerstone Strategy. The picture is from 1984.

 

The General Convenience offer aimed to build on the chain's strengths:

- pic'n'mix sweets and confectionery, as Europe's largest sweetshop
- toiletries where Woolworth had the second largest share after Boots
- stationery and cards, where Woolworth was second to W.H. Smith & Son
- photo frames and albums, a traditional strength
- Christmas Cards, Wrap and Decorations, as the established market-leader

Colin Brown explained that the Board saw General Convenience as a key springboard. He believed that the stores would excel once the clutter was removed. Customers would then appreciate the quality and value of the range.

He reiterated that the goal was to offer good value on things that shoppers bought regularly. The space that had previously been used for aspirational, luxury products would be given over to faster sellers. This would allow the Woolworth value to shine through and would help to restore the mass-market appeal of the Woolworth brand.

 

The 1984 offer of Daily Provisions at Woolworths included both groceries and delicatessen (photograph of displays at Rushey Green, Catford store courtesy of Mr Andy Hayzelden)

 

The Daily Provisions cornerstone was recognised to be a big challenge. It comprised not only a convenience store range of grocery but also weigh-out delicatessen in the larger stores, and even cigarettes and tobacco. Despite the company's poor showing in this market in the 1970s, the cornerstone strategy considered such ranges essential to build daily shopper numbers. It set out a major investment programme which was intended to modernise the facilities both on the salesfloors and behind the scenes. A group of twenty stores was identified to pioneer the new approach. Each got a full refurbishment and re-opened with a new delicatessen counter, a grocery section and an up-scale offer of bread, cakes and take-away food. With this investment the offer looked credible and started to build sales, in marked contrast to run-down suburban stores like Catford in South East London, which is illustrated above.

 

Some of the range of housewares that graced the shelves of Woolworth stores in the run-up to Christmas 1983

 

 

 

The final cornerstone was Homewares and Household Goods. This had been a longstanding strength for Woolworths. While the Board's strategic review had noted that the overall market was in decline, it remained huge. The existing Woolworth range look drab and tired. It was believed that a makeover could soon restore the chain's fortunes in this area, offering up-to-date basic designs at rock bottom prices.  An early example of this policy in action was the decision to switch from dark brown buckets and bowls to fashionable red and buttermilk shades.

 

The cornerstone Woolworths in High Street, Maidenhead, Berkshire, pictured in 1985. This was one of the first wave of stores after the company changed its name to include an 'S'The audience consisted of time-served Store Managers and Head Office personnel. They were encouraged that so much of what they had built over the years would be retained. Most saw the sense in eliminating the more expensive lines and focusing on value for money, and also understood the rationale for reducing the amount of dead money tied up in excess stock.

Employees flocked to see the new-look stores, badged 'Woolworths' for the first time. Most left uplifted and hopeful. But the new Strategy was dead in the water. As it took shape Dixons launched a hostile bid which contrasted the rapid growth and limited investment required by B&Q with the slower and more capital-intensive proposal for the High Street. This forced the Board to develop a more radical solution in order to survive. As a result, less than two years after new Delicatessen Counters were installed in stores like Bedford and Orpington, they were being removed and destroyed as part of the new Operation Focus.