Rivals gain from wander of Woolworths

Published on Friday 27 November 2009 21:39

RETAILERS have gained nearly £500 million in extra business from the collapse of Woolworth's, figures released yesterday revealed.

Since Woolworth's closed in January, supermarket giants Tesco and Asda have gained 146m, while the booming pound store industry has seen sales rise by 60m.

And, according to analysts from the trade journal Retail Week, hardware shops, department stores and catalogue companies have also raked in hundreds of millions of pounds in extra revenue on the back of Woolworth's collapse.

Asda tops the list of benefactors, making an extra 75m in the past 12 months while Tesco has pulled in a further 71m.

Some of the lost sales have gone to the high street and some to online firms, said analysts Verdict, whose list includes Shop Direct, Sainsbury's, Toys R Us, Wilkinsons and Amazon.

George MacDonald, deputy editor of Retail Week, said that supermarkets and discount stores had been gaining ground on Woolworth's for years now.

He added: "Woolworth's lost touch with their heritage, and suffered as a consequence."

It was announced on Monday that Shop Direct, which bought the Woolworth's name for 7m, is looking to revive the brand and open up to 200 new stores.

However, Mr MacDonald said he doubted that any "bricks and mortar" re-launch would be a success.

"The nostalgia value didn't save them the first time round, the market is more competitive than ever and with over 75 per cent of their old stores now repossessed by the competition it will be very difficult to re-launch successfully."

An Asda spokesman yesterday admitted a "dramatic increase" in toy sales since Woolworth's closed, adding: "We've undoubtedly helped plug the gap left by Woolies."

Neil Saunders, consulting director at the retail think tank Verdict, said that the large supermarkets were always Woolworth's main competitors, and one of the main causes behind the brand's demise.

He said: "They've mopped up across the board from its failure."