Ok some facts; 1. WOW has higher margins per sqm of floorspace...

Ok some facts;
1. WOW has higher margins per sqm of floorspace than Coles, this indicates that WOW can price match with Coles and still make money. This also means that WOW can stay the course in a price war with Coles and still make money.

2. No one knows what Aldi's margin is. We know that Costco has a 10% margin across the board that covers their costs and they make profit from membership.

3. A price war is always good in the short term for customers , however it may not be good over the long term if a competitor leaves the market.

Now some opinion;

a. The lowest price is a key customer perception, at the moment Aldi has the perception of value in the customers mind, Coles and WOW will not change this so they must win the other perceptions, service or convenience. I don't see them winning the service perception space at the moment, maybe the convenience perception but as Aldi grows so will this perception of them.

b. There are no longer easy fixes for WOW. Everywhere I look the old ways no longer work. WOW followed the Tesco model almost slavishly and now both are in trouble. The trouble they are in is not terminal at this point and shedding assets etc will look good to the market and the idiot analysts will go oh-ah, however without winning back customers spending there will be a gradual slide into an eventual malaise that could be terminal for shareholders.

So what do they do?

There is only one way forward and that is to win the customers perception battle. WOW lost the trust of the customers and now must regain it by being more open, honest and becoming a customer service company that sells stuff, not a retailer.

i. Have a customer loyalty scheme that seemingly rewards the customer more than the retailer, no point having one if the customer doesn't feel it has a material value to it.
ii Engage your customers and LISTEN to what they say, e.g. if they say they think you treat farmers badly, then show them you don't, and show them when you do and fix it.
iii Fix things when they go wrong, admit you screwed up and fix it and then follow up
And the rest of customer service 101....

This would probably involve short term pain for investors but long term gain. Not that I think they will do it mind you.