[AMA] I Worked at Head Office for Coles. Ask me anything

I was reading the thread about the guy who worked at Coles/Woolworths and saw that there were quite a few misconceptions from staff and the general public about products, pricing, policies etc.

I have recently left my role at Coles. However I did not work in a store. Instead I was working in Head Office in a number of roles including Merchandising, Ranging, Supply Chain, Distribution and Marketing. I do however have a lot of experience in store and I can safely say that in my head office role, I have knowledge that even a store manager would not have or be privvy to.

So feel free to ask anything and I will try to answer!

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  • +17 votes

    As an example. If you see something in a Woolworths or other Coles store that your local Coles does not stock request a staff member to do a "Range Request". It needs to be a department manager or store manager for them to know what it is. They can then request the item. The request gets sent off to space planning at head office. This is the team that deals with the layout for the store. Each item has particular facings. Example - Coke in a medium sized store might have 8 facings, Pepsi 6 etc.

    If the store has room to reduce facings of a product below the minimum required for that store type (so the new product can fit) AND the local distribution centre holds stock for that item the range request will be approved. Usual turnaround time for approval is about 1 week. However because of store processes it might take another week or two for the item to appear on shelf. This is because somebody then has to generate a ticket at some point, somebody has to find the stock and fill it etc.

    •  

      Can you tell us anything interesting about slotting fees? How much would you charge a company if they wanted to put some baked goods on your shelves?

      Has there been any disputes between 3rd party companies and Coles in terms of who gets what space (e.g Coles Homebrand stuff taking priority over others)

      • +1 vote

        In terms of slotting fees, it is definitely not called that at Coles/Australian retail. To be honest it is one of the areas I probably have the least knowledge in. I can't give you a solid figure without asking some ex colleagues unfortunately.

        In terms of disagreements, yes. There has been many disagreements with Coles and certain suppliers. Sometimes this means that pricing agreements do not get updated, whilst other times it means that products from certain suppliers are withdrawn for short periods of time. Coles have been known to be pretty ruthless on some suppliers, and I am pretty sure this is knowledge even outside of the company. Coles homebrand products and any other low margin product as a rule of thumb usually takes pride of space in either the top shelf or the bottom shelf. I think however this is a pretty universal thing, as our eyes are drawn to the middle shelves and the higher margin products.

    •  

      I added the extra as I have come across too many staff members (at your competitor) who call a coworker and introduce as a store manager.

      I have also ordered unstocked items in bulk at your competitor though a department manager (obviously stocked by their distributor).

      Corporate policies work great on paper, but are often ignored by or unknown to staff.

  • +9 votes

    How are the weekly sale items chosen?

    • +17 votes

      Weekly sales items are usually locked in about 14 weeks from promotion.
      They are usually decided based on meetings with suppliers and what kind of discounts the suppliers can offer.

      Each buying team also does it differently as the promotions for certain categories differ.

      •  

        Weekly sales items are usually locked in about 14 weeks from promotion.

        longer if it is not a local stock

      • +2 votes

        So are all discounts offered, offered by suppliers/manufacturers ?
        I have always wondered, if they can offer stuff for half the price, then why not just sell it at that price and have a constant stream of customers. Guess it reduced the perceived value ? You'd be the best person to answer.

  • +31 votes

    Do you think peace will reign free in the Korean peninsula?

  • +2 votes

    Who owns the most poker machines out of the two giants?

  • +3 votes

    How much does a manufacturer pay to put their product on an 'end' (end of aisle or other similar promoted location) for a week?

    • +2 votes

      There is usually not direct payment. It usually is via a volume rebates that are negotiated with individual suppliers. However these decisions are usually nationwide. For example if Coke 24 pack is on an end, it will be on the same end in every store in the nation. Not necessary the location, but the end number, ie End 3)

      The decisions for the ends is usually one of the first things to be completed as the information needs to be passed onto the space planning team to allow them to design what the end will look like. For example stacked on the floor, on shelving, in supplier tiered (cardboard) shelving etc.

  • +1 vote

    Hi John,

    Any reason why the fruit has no mini bar coded stickers on them rather than having the supplier logo for accurate priced scanning?

    I have noticed that at checkout, the checkout person very often makes pricing errors on the type of fruit that is "assumed" rather than actual?

    For example, the apples on special that i get is not priced correctly and the more expensive apples are entered into the POS.

    Woolworths has a incorrect pricing system, where you get the item free if discovered where Coles has a "wriggle" clause to opt out of this error for fruit.

    If i scanned an item on the self-checkout and entered the wrong item that is cheaper "inadvertently" I would get accused of theft.

    I advise anybody that purchases fruit at Coles undertake a comprehensive bill check after purchase as in my view, ripping us off is a common practice for checkout staff errors

    • +4 votes

      You don't get the item for free if it's operator error entering in the wrong product or if a different product ticket was placed in front of the item. Only get the free item where the item scanned at a higher price than the items ticket on display.

      Staff often don't follow the scanning policy though in both supermarkets and you might get lucky or unlucky depending on the staff member. I've found the best way to get free items is to not say anything until you've paid then go to the service desk.

      • +2 votes

        "I've found the best way to get free items is to not say anything until you've paid then go to the service desk."

        Yes, you have hit the nail on the head.

        After the transaction/payment is always with me too!

        Cheers

        •  

          Can you elaborate how and why this works more so than questioning it at the time of scanning?

        • +1 vote

          @ih8un:

          There are times I cannot supervise every scanning process, considering that they do have a small screen to compare. And sometimes, the screen is skewed/pointed away from direct sight.

          Furthermore, there is an aura of being impatient as they scan quickly and there are others behind waiting with their groceries full on the conveyor.

          Regardless if I check the scanning process on their screen or not, I pick up my bags of shopping after purchase and go to a quiet area, and check my receipt.

          Once again, they can afford expensive RF tagging for meat etc, self-checkouts eliminating several wages for young kids .. where customers queue like cows in a race .. etc …and I'm sure that they can afford a small bar-coded sticker for fruit/vegs for mistake-proofing rather than the logo that that covers (at times) bruising or any anomaly of fruit/veg that you are purchasing.

          I'm sure that the scanner/check-out person doesn't do this on purpose as they are under the pump at times.

          Prevention is better than cure .. as the cliche goes.

    •  

      I notice woolworths price all the different types a particular fruit/veg the same eg all varieties of mandarin are the same price/kg. So it doesnt matter if you/operator gets the variety wrong

    • +1 vote

      I advise anybody that purchases fruit at Coles undertake a comprehensive bill check…

      Yeah tell me about it. Bought some tomatoes for $4.90/kg I think, a bit over a week ago. They were hydroponic ones with the stems attached. But I only wanted 3 so I took the loose ones people had broken off. The checkout girl charged me for more expensive ones. At the car I realised I'd paid over $3 more, walked back across the car park, and was told, "Always take ones with stems attached." Right. So if everyone did that who would take the loose ones. How about staff either learn the different shape of the tomatoes in stock, or ask the customer which ones they are instead of assuming they're the most expensive ones.

      • +1 vote

        They were hydroponic ones with the stems attached.

        Sounds like Truss Tomatoes.

        Totally agree!
        You take the amount you are happy with and not a whole bunch because it assists the checkout person with identification.
        Plus if you take more, they usually rot by the time you use the extras.

        However, I can understand where the checkout person could make this error.

        As suggested on my previous post, if supermarkets invested in little min-bar coding for fruit/veg .. like normal grocery items, we will not be in this predicament.

        There are already stickers on many fruit/veg, however it's the supplier logo. So basically the bar-coding can be integrated with it. It's not hard.

        I just wonder how much these businesses profit with these type of errors, where the customer "assumes" that the scanned items are correct, but are being overcharged due to incorrect scanning.

        Many customers go for ticketed specials, so in essence, they can't be at a loss due to incorrect scanning.

        This probably offsets the self-checkout losses, but then they are saving 100's of thousands per year of not employing people.
        Soon more savings off abolishing plastic bags.

        … then more savings of forcing closures of supermarkets and pushing massive warehouses for online shopping.

        Already, you can see that many Shell outlets are becoming "mini-supermarkets"

        So I would say, in my view, many clustered supermarkets in one major suburb will start to disappear.

        Cheers

  • +1 vote

    This sounds more like a store training issue rather than something that the company is trying to intentionally do. Trust me, there has been no memo to stores to request them to ensure that customers have the highest priced item possible scanned in….or has there????

    If you check on the stickers of products such as apples there should be a 4 or 5 digit number. Such as 42118 (for example granny smith apples). If you type that number on the sticker into the Self Checkout the item will come up.

    • +1 vote

      You can also use shortcuts on the self checkout. 1 = bananas 6 = carrots etc.

      •  

        Already know 1 for Bananas.
        I want a list of all the shortcuts i know the old self checkout system used to display them on screen when you selected the photo the new one doesn't.

        Cannot stand Coles current self checkout system i used to use the 279(flybuy card number) code without having to pull out the card now system demands you to scan it. Thank goodness some other Wesfarmers stores still accept it.

    •  

      Thanks John,

      These companies invest in so much money on adopting Lean Logistics/Manufacturing;

      • Introduction of self-checkouts to reduce staff numbers.
      • RF Tagging for expensive items.
      • Abolishing of plastic bags (OK, more importantly, the environment benefits and obviously so does Coles coffers/shareholders)

      Can't they invest in a bar-coding system for fruit/veg to ensure accuracy for the customer?
      I'm sure they can!

      Once again people, check your bills!!!!

      Anyway thanks for your reply

      • +1 vote

        Hopefully something like that is on it's way.
        Fresh Produce operates differently to the other departments in the store. All stock is ordered manually.
        Grocery/Dairy/Meat etc, run on a system called Easy Ordering.

        It is basically a computer ordering system that forecasts sales for a day, and ensures that there is enough stock on hand to meet forecast plus a "safety stock" and minimum presentation standards. These systems rely on accurate stock on hand numbers. If the stock on hand numbers are out, then easy ordering thinks that there is stock in the store and won't send it any more. It is only when this SOH level is reset that it will then realise and send more. Obviously there is stock on hand drift with theft, wrong counts by somebody, misplaced stock, misentered stock etc.

        If Fresh Produce goes onto the Easy Ordering model then there will be a greater need for Stock on hand count to be accurate, therefore greater importance on customers entering the correct details. However I believe Easy Order Fresh Produce is still a while off, if at all.

        •  

          How about cannibalization? SOO of other line ? weather? local events etc?

        • +1 vote

          @LoveBargain15:

          All of this is factored into when forecasts are created. The Easy Ordering system creates a baseline forecast based on information that it is given. Discount %, In catalogue, previous sales etc. This forecast is then amended by CDP's (Category Demand Planners). They then have to make a human decision based on tens or hundreds of other factors such as weather, local events, Christmas, public holidays etc. Even pension on/off week, socioeconomic factors of the store and car park shutdowns/maintenance are taken into consideration. Obviously a lot of this requires feedback from individual stores.

          For promotional items this forecast is then further tweaked based on State and Store Day 1 and Day 2 promotional sales.

          For example, if at a state level Coke 24 pack is forecast to sell 100,000 units in a week and Day 1 sales is 50,000, forecasts need to be bumped up to about 300,000 so that orders for the rest of the week match demand.

        •  

          @John Stone:

          You could tweak the forecast to match the system, but will the supplier able to match is another story.

          KPI is already set by then, so whatever you want try to do to update the forecast it become useless.

      • +2 votes

        While the plastic bags ban is mentioned, I just want to put it out there I don't agree to this and the peril of duopoly means I can't go anywhere else.

        Coles, being the loser of the duopoly should have taken a differential stance against woolies which is increasingly becoming more like Qantas everyday (by getting political).

        I hope the glory days of Coles spanking Woolies arse (like when it first introduced the 4c fuel discount) is coming again.

        • +1 vote

          "I hope the glory days of Coles spanking Woolies arse (like when it first introduced the 4c fuel discount) is coming again"

          The problem now with this luring "tactic" of customer rewards is not that beneficial as you think.

          Where I am located, there are other Service stations with in the vicinity that are not on the main roads, like many Shells etc .. and I can tell you, I have a BP off the main road and it is usually 2 cents cheaper than Shell factoring the 4 cent Coles discount.

          In my view, they jack up the prices to offset the discount and in some cases, are still more expensive than many others.
          But there are times that they are cheaper, but like 1c/ltr with their competitors however this frequency is rare.

          Cheers

        • +3 votes

          Could not agree more.

          Look at Commonwealth bank with all their BS politically correct activism yet the one thing that potentially could save a whole community from potential harm/terrorism (reporting suspicious deposits to the relevant government authority) they failed.

          Lesson for Australian CEOs if reading this. BE the best bank/supermarket/business and leave the politics to The Greens (probably not!), The ALP and The Coalition.

  • +1 vote

    Theft from self-serve, is this 'budgeted' for?

    & What is Coles doing to prevent further theft and false scans @ the self serve checkout?

    • +4 votes

      Unfortunately I have not worked within loss prevention to know the plans for self checkouts.

      However, I do know, that yes, theft just like wastage is budgeted for. Although scarily at store level wastage and shrinkage are both accounted for under the same entry.

      •  

        At different retailers to yours shrinkage, wastage and store use are logged under different codes. Stores with higher than average in one category are informed. Staff with higher than average stats are asked for explanations.

        Shrinkage and waste normally affect staffing budgets, not purchasing budgets, so there would have been no reason for you to have any involvement.

  •  

    How much did you get paid and why did you recently leave your role at Coles?

  • +2 votes

    Do you have any idea why Coles annoyingly does not match their online price? Do they want people to go to Woolies that much?

    •  

      Can you give any examples of this. It isn't something I have worked on, but it is also something I have not noticed myself.

      •  

        I can only think of one off the top of my head: a few weeks ago Coles had fuze ice tea on sale on their site. I went in store and asked them to match, they refused, so I went next door to woolies and bought the same items at the same discounted price.

      •  

        it's true. Not on every item, but some items.

      •  

        Happens to me all the time. You receive an email advertising prices, stating your local store suburb, and saying "order online or in-store"… but the store price isn't marked down. So you show staff on your phone and they say, "Oh our price is different to online."

        Chicken breast or thigh fillet are two I notice the most. But also remember it happened with apples a few months ago. I was in WW and looked up apples in Coles. It showed something like $1.90/kg, but when I walked in there were something like $5.

    • +1 vote

      You might want to check again. There used to be a slight difference in pricing to cover the higher costs of a human being picking, packing and delivering the order. Even then it was only marginally higher and worth it compared to the convenience. Also they are the same price for specials, everyday lines and down down.

  •  

    Hi John, Thanks for the AMA

    Two questions, How old are you (approximately) and how did you end up in your job at coles? What were your prior roles/experience/education.

    Thanks

  • +1 vote

    I am in my very early 30's.
    My previous experience has mainly been in Accounting and Finance for one of the big accounting firms.
    I have a degree in Commerce with majors in Accounting and Economics.

  • +1 vote

    Do you get better discounts than the 5% they offer us peasants?

  • +2 votes

    I'm about to start my career in one of the big 4 accounting firms. What made you move from one of these firms to Coles?

    • +4 votes

      To be perfectly honest I did not enjoy the day to day work. I had worked for the company for a while, but I had only done so in a couple of roles. It was very repetitive and I felt that I needed to either leave or do something else internally to challenge myself.

      Leaving was one of the hardest life choices that I had made up to that point in time. It was a very stable job with a good salary, and I had many sleepless nights about it. If you really want to know more, pm me and I can give you more info.

  • +5 votes

    Why does coles not have a capital c

  • +5 votes

    Why are all my favourite quality products slowly being replaced with 'home branded' crap?

    • +1 vote

      I saw on the news the other day that Coles wants to stock up to 40% of their own branded products soon, have fun ;)

      • -1 vote

        I refuse to buy home branded products, if that means I have to shop elsewhere or online then so be it. :)

        •  

          Why, if I may ask?

        • +4 votes

          @jikijiki: A few different reasons, for one thing I appreciate quality name-brand products and I do not believe that 'home branded' products are up to the same quality/taste. Secondly once all the quality name brand items have gone out of business then there will be no stopping them from gradually decreasing the home brand quality even more. I don't mind paying a little bit extra for I perceive to be a better quality product while at the same time encouraging variety in both products and producers. The Home Brand products seem to be a tactic by the big 2 supermarkets to further solidify their market dominance which I IMO is bad for the overall health of both the economy and the customers who are left with smaller and smaller choices. Anything I can do to encourage more market participants and greater variety, I will do.

          That's just me though, I'm funny like that. :)

        • +3 votes

          @EightImmortals:

          I agree with your second point but regarding the quality I have had times where I used 2 cans of the same veg/fruit, one branded and one plain label and the plain label was definitely superior. The problem is you have to try them out and they could change manufacturer and hence quality but that also happens with branded products but not as often.

        • +3 votes

          Flour, cornstarch, sugar, salt, milk powder, cocoa, and dozens of other things are the same no matter what brand they are. If a brand name product is charging 3x the price for such things they don't deserve to be in business.

        •  

          @GregMonarch: Yeah, nah. I refuse to believe that flour or sugar grown in Australia is the 'same' as those products coming from less regulated markets. The same goes for those other products, are they GMO or non GMO? Are they organic/non organic. etc etdc Unless you are comparing apples to apples (no pun intended) then there are numerous factors that play into a shelf products price. And I'm assuming that home branded stuff will always opt for the cheapest product they can find.

        • +1 vote

          @EightImmortals: private label brands can and often do come from the same sources as branded goods

        •  

          @droptester: Maybe. But how do we tell? And why do they taste different?

      •  

        Liquorland is the same half the stuff thats on sale normally is their own branded stuff

    •  

      Higher margins when your not paying the manufacturer for their brand as well as their product.

  • +1 vote

    The Coles head office was built on the site of a former drive-in cinema. did you ever experience ghosts from that time?

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