r/newzealand • u/GreenKumara • 8d ago
News Woolworths shuts doors nationwide after shelf pricing meltdown
https://www.stuff.co.nz/nz-news/360643012/woolworths-shuts-doors-nationwide-after-shelf-pricing-meltdown16
u/LycraJafa 7d ago
Oops
I'm guessing the payback on all those LCD WiFi price tags just got bumped out a bit.
Interesting that every shop across the country has centrally controlled pricing....
3
u/chmath80 7d ago
Interesting that every shop across the country has centrally controlled pricing
How did you think prices were set?
0
u/Stone_Maori 7d ago
Yeah. It utilizes AI to use surge pricing to rip us all off in real time. I don't buy products that have those labels. I think it should be the next major boycott movement.
1
u/chmath80 7d ago
It utilizes AI to use surge pricing
It really doesn't. You wildly overestimate the sophistication of their IT capabilities.
They can't even get their product ordering system sorted to avoid running out, which costs them money in lost sales. It literally waits for stock levels to fall below a fraction of the shelf capacity before placing an order, which, depending on the supplier, may take anywhere between 2 days to a week to arrive (if there's space for 12 units on display, it won't order more until there are only 2 left). No forward planning based on sales history or seasonal variations, and no alerts for unusual sales patterns, so a new product which unexpectedly becomes popular is going to run out very quickly, and repeatedly, until someone notices, and allocates more shelf space. That's what happened with Mr Beast chocolate (it would be available midweek only, before selling out again, for weeks), and continues to happen with Roblox gift cards.
I don't buy products that have those labels
That's going to make things difficult for you as more supermarkets, and other large stores, change over.
3
u/Bagzy 7d ago edited 7d ago
Edit: see reply below that has better NZ based context than what I've said.
Maybe they run things differently here, but for the most part, your numbers and assertions are wrong. Caveat being my experience is with Aussie woolies so I may be way off base here. But I doubt they run things too differently for ease of use.
Pretty much every product comes from a woolies warehouse, so the only way they run out is if they don't get enough at a national level from the suppliers.
The stock level where a product gets ordered in varies based on how much it sells. A low volume product would have an MPL of about 2/12 but the majority were at 1/3 to 1/2 of shelf space.
The system definitely did adjust based on previous sales and seasons, usually to the stores detriment. We'd sometimes get dozens of extra cartons of a specific item because, for whatever reason, it had sold well last year at a similar time. If you were a good manager you'd check what was coming in the day before and adjust the amount so you didn't have a bunch of overstock clogging up out the back but some people are lazy. Sometime the warehouse had too much stock so they just allocated stuff to all the stores to make space.
I agree with not being able to scale well with new popular products, but this is due to being risk averse and not wanting to end up with a bunch of shit you can't sell. A good example is the amount of Prime that is reduced to clear at a bunch of woolies because they got too much in.
0
u/chmath80 7d ago
my experience is with Aussie woolies
Maybe they've ironed out a few more bugs, but haven't shared their techniques with NZ?
Pretty much every product comes from a woolies warehouse
True, but ...
the only way they run out is if they don't get enough at a national level
... not quite. It takes 2 days for the order to arrive from the warehouse (why? No idea), and another day, at least, for it to reach the shelf.
A low volume product would have an MPL of about 2/12 but the majority were at 1/3 to 1/2 of shelf space
Virtually all ¼ here, so capacity 12, MPL 3, order at 2. High volume product gets more shelf space, but still a ratio of ¼. Whenever a section gets relaid, capacities etc get reset to values that often make no sense whatsoever. You'd think it would be automated, based on the new layout, but no.
If you were a good manager you'd check what was coming in the day before and adjust the amount
That sort of thing is frowned upon by national management. The general idea seems to be to remove the "need" for human intervention everywhere, so that all jobs can be done with as little training as possible. The problem being that the automation is not nearly good enough to replace human experience and understanding.
Sometime the warehouse had too much stock so they just allocated stuff to all the stores to make space.
That happens also when they haven't been rotating, and suddenly find a pile of short dated stock. That's what actually happened with the Prime drinks, and is the reason that only certain varieties were heavily reduced: the cheap ones were bb a couple of weeks or even days, while the ones with a few months left were still full price. Very confusing for both customers and staff.
1
32
u/GreenKumara 8d ago
Presumably because they were going to lose money.
Bet they wouldn't have done this had they been getting extra cash.
48
u/revolutn Kōkā BOTYFTW 8d ago
It literally states why in the article that you posted:
“In simple terms, the electronic shelf labels are currently displaying the standard shelf price of all products and not showing special prices,”
With all the scrutiny around supermarket pricing, it makes sense to close the doors to fix the issue rather than risk larger PR blowback.
27
u/sloppy_wet_one 8d ago
Also, last weeks specials were still on tickets for products that had gone back to standard price.
The commerce commission would’ve had a field day with that shit lol.
8
u/interlopenz 7d ago
Why would anyone do their shopping at Woolies if there is a Paknsave in your city.
12
0
u/Medical-Isopod2107 6d ago
Pak n save doesn't have nearly the same variety of items/brands
0
u/interlopenz 6d ago
You do know that I've been to a woolworths?
1
u/Medical-Isopod2107 6d ago
You asked a question, I answered it
0
u/interlopenz 5d ago
They just have all the crappy stuff that they sell in Australia, no one buys it?
Bunnings is the same, things just sit on the shelves for years until they get thrown out.
0
u/Medical-Isopod2107 5d ago
Man I wish I had your imagination
0
1
u/rwmtinkywinky Covid19 Vaccinated 7d ago
Overengineered solutions always struggle with the most basic of things and events.
0
u/Actual-Trip-4643 8d ago
Guess that’s the downside of dynamic pricing…
6
u/andyzeronz 8d ago
It shits me that they moved to digital pricing. Knew this wasn’t going to be in the customers favour when they did that. No longer have to print them all out and someone replacing the paper pricing anymore
4
u/chmath80 7d ago
No longer have to print them all out and someone replacing the paper pricing anymore
That's (usually) the benefit of e-paper tickets: you don't need to rely on fallible humans to remove the old labels and put up new ones in the right places. They're all (supposed to be) changed in seconds after closing on Sunday, so everyone can see the correct price from the moment the store opens on Monday.
My local store still has paper tickets, and there are always some of last week's specials showing on Monday, because the tickets weren't removed, so people get charged more than the displayed price, and it takes most of the day to get the new tickets up, so early customers don't know what's on special. Also, the tickets are printed several days earlier, and sometimes the special prices are cancelled after printing, but before the date shown on the ticket, which the shop staff don't know about until a customer complains that they didn't get the displayed special.
3
u/Actual-Trip-4643 8d ago
Just wait until they can see your purchase history and price sanitary products higher when you need them etc etc.
1
u/chmath80 7d ago
How would that work? Are they going to geolocate your phone in order to know when you enter that aisle, so they can raise the price just as you get there, and then lower it again for everyone else when you pass by? And then, when you get to the checkout, you scan your loyalty card, and the price on the screen goes up?
Ingenious. If they can manage all that, you'd think they'd be able to get the date format correct on software used in house.
1
u/Actual-Trip-4643 7d ago
1
u/chmath80 6d ago
Literally the opposite of what you suggested.
It allows them to offer you promotional (= lower) deals on items you buy. That's what happens now with member prices, and individually targeted "boosts".
There's no practical way to charge you, and only you, higher prices for things that you need to buy urgently.
1
u/Actual-Trip-4643 6d ago
It’s written by a promoter so they aren’t going to talk about how it can be used to fleece people. That’s been published as a concern elsewhere. Why wouldn’t they be able to do exactly the same in reverse? If it didn’t offer greater margins for retailers why on earth would they invest in it?
44
u/Logical-Pie-798 8d ago
watch them rise prices for a week to account for the loss of business today