CHAPTER THREE. quality, service and value

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2 CHAPTER THREE quality, service and value

3 Drapery, curtains and manchester Since opening the doors of the first Coles store in 1914, Coles has always stood by its guarantee to supply quality, service and value to its customers. The company s refund policy summarised Coles basic ethos, which promised complete customer satisfaction and the guarantee of quality merchandise, and had done so since the firm s inception. As the company went from strength to strength, management was conscious that the public should be made more aware of this central policy, so during the late 1920s and 1930s, the Coles slogan Satisfaction Guaranteed or Money Cheerfully Refunded gained prominence. In 1927, the year the first meeting of parliament took place in Canberra, GJ Coles made the decision to float G.J. Coles & Coy Limited, feeling that this momentous step in the company s development was needed to raise further capital to finance the company s continuing plans for expansion. G.J. Coles & Coy Limited floated on the stock exchange on October 31, 1927 with an authorised capital of 1,000,000. The shares, initially priced at 1, immediately rose to 44 shillings a 120 per cent rise. Staff were encouraged to buy shares in the company and by August 1928, 80 per cent of the 203 ordinary shareholders were employees, holding a combined total of 177,260 shares. One of the company s great strengths was that GJ and his brothers considered retailing a science. The variables of changing trends and markets were monitored by careful analysis and all areas of store operation were dissected and examined under the Coles microscope. Stock management, sales promotions, buying, budgeting, price control and advertising were all studied intensely to uncover strategies for their efficient control. As GJ explained in 1928, It is only by scientific management that distributing costs can be kept down. He believed that it was the customer who decided the range of stock, writing, Employees are instructed not to press customers to buy If an article is not sold in sufficient quantities to justify its selling space on the counters, it is dropped. A buyer takes the blame for purchasing a line that does not sell, as we consider that if the public do not buy it when shown, it is not our duty to force it on them because we have made a bad purchase When an article is selling well, all managers are immediately advised to give increased displays of it, and order larger quantities as sales of a line fall off, its selling display is correspondingly reduced The customers themselves really decide what goods we shall stock in our stores, as no article is added to our standard list till the public begin to buy it freely. Coles men and head girls As the business grew through the early years, jobs were plentiful but GJ found it difficult to find reliable salesgirls. Still, once he found one, she often stayed with the company for many years. One of the first salesgirls at the Collingwood store was Miss Dorothy (Dot) Fryer, who went on to work for Coles for twentynine years, becoming the company s first Head Girl and later Today, when we talk about drapery, we think of curtains, but in Coles early days, the drapery counter in fact stocked ready-made clothes. Each Coles store had a men s, women s and children s drapery department, which were some of the most profitable counters in the store. Interestingly, we call towels and linen manchester because originally, they all came from the town of Manchester in England, where the cotton mills were. one of its first female buyers. Long after her retirement Dot continued to be a proud shareholder until her death in 1992 at the age of ninety-nine. She joined Coles around 1920, earning a weekly wage of 30 shillings and was a great asset to the youthful firm. Dot quickly developed an excellent working relationship with GJ although early in her career she questioned his policy that the customer is always right. One day GJ overheard Miss Fryer arguing with a customer. She was refusing to exchange the customer s purchase on the grounds that the lady hadn t actually bought her goods at the Coles store, although the customer insisted that she had. GJ approached and told Dot to make the exchange, and Dot did as she was told, although afterwards, she crossly said to him, You didn t say we should change goods from other shops! To which GJ replied, You are quite right and I am wrong, and the customer is wrong. But after all, it was only a penny packet of hairpins, and it wasn t worthwhile offending the customer. GJ then paid for the hairpins, which Coles definitely did not stock, and told Dot that he would take them home for his wife. 24

4 1. A typical Coles newspaper advertisement c One of the first Coles girls, Dot Fryer, went on to become the company s first Head Girl and later, one of its first female buyers. 3. Staff magazine Colesanco was already well established by GJ Coles c By late in the twenties, Coles personnel policies had also evolved. Coles men were selected according to the following exacting criteria: Fair education, average ability and youth (age limit 28), and once they had their foot in the door, a hierarchical career structure was implemented whereby 99 per cent of all men began at the bottom as storemen. From there they worked their way up the promotional ladder, becoming in turn counter salesmen, floormen, sub-managers and store managers, after which they could aspire to executive positions. Some specialised work, including auditing and shipping, required external appointments. Successful applicants all followed a set orientation pattern, spending time in each department within the store. They were taught how to display goods and dress windows, received instruction on customer service, office routine, checking registers and banking. In addition to their daily work they were encouraged to enrol in an elementary book keeping course. Once they had completed this six-month course they were given Coles own Chain Store Staff Instruction Course. This consisted of instructional booklets and examination papers designed to be completed outside working hours. 3. Back in the twenties and thirties Coles girls followed a different career path. Female employees were not considered as potential managers in those early days and most female employees were selected by the head girl in each store. Head girls usually older women and not girls at all were proud of their title and did not consider it derogatory. Both feared and revered, head girls held 4.

5 The Coles Girl From the 1920s, female employees received special training and all new girls received a booklet, The Coles Girl. The illustrated booklet answered the question: How soon do I belong? For a month after she is engaged, a new girl is considered to be on the temporary staff. During this time the manager and Head Girl give her every opportunity to learn to feel at home. At the end of this time, if the manager has good reports of the work and her character she will be placed on the bonus list. A Coles girl was told how to receive customers guests in her store, attending to them promptly, not pressing them to buy and telling them where they could buy goods that were not available in Coles stores. Finally she was told that a Coles girl co-operates and works with fellow associates, thus meriting their friendship and esteem. Many employees who joined Coles spoke of their dedication to the company. Hilary Jones, who went on to a highly successful career managing customer service, started in a store role and recalled, Oh, I instantly felt like a Coles girl. I fully believed that once you re a Coles girl, you re always a Coles girl. I had an intense loyalty to the company, and I loved every part of it it was my life. When I left No. 12 in 1954 to have Meredith, my first child, I sobbed and sobbed! I was heart broken! It was the end! I was devastated, absolutely; it was just a case of loving what I did, and loving the people I worked with and the camaraderie that went on. My husband, Ian, often said to me that he was the second love in my life, not the first. In a way it was true! positions of considerable power in the company, something that at times caused resentment among the junior girls, as one of the head girl s most important duties was to ensure that company policy was followed to the letter and that all rules including those relating to dress and behaviour were strictly adhered to. Girls who didn t follow the rules, which included things such as no chewing gum and no leaning on counters, would be dismissed. Most head girls were responsible for stock control, female staff rooms and lockers, uniforms, supervising female employees, helping new girls to settle in, dealing with any complaints Coles girls may have had, and opening and closing the store each day. In later years head girls became fully responsible for the store s drapery range, but of great significance was the head girl s role in creating the team spirit that existed in Coles. A staff-training booklet advised her: The Head Girl must exert her influence to assist in welding staff together as a team and let the manager know promptly if there are any matters likely to cause discontent or unhappiness among the staff, which may not be known to the manager. Outside working hours the employees enjoyed the events organised by a thriving social club, which had been formed in 1926 and regularly held picnics, balls and sporting events, including football, cricket and basketball inter-store matches. There was also swimming, badminton and riding clubs run by the company, and for the less sporting-mad, there was a library as well as first aid and home nursing courses among other things. A spirit of camaraderie developed among workers and went a long way to encouraging many to devote numerous years of service to the company. Beryl Cameron remembers the annual Coles Ball at the Palais, saying, The directors were there and they d speak to everybody and dance with this one and that one it was the highlight of your life, to go to the ball. Constantly seeking growth The Coles brothers knew that growth was imperative to the success of their business, giving them greater buying power. To that end, they decided it was time to move north and on June 1, 1928, opened Store No. 10 in Pitt Street, Sydney. The rental of 20,000 per annum was the highest amount ever paid for any retail site in Australia at that time. Prior to the 9:00am opening, five policeman were kept busy trying to control the crowd that had gathered in readiness on opening day. When the doors swung open, a human tide thronged into the shop in search of specials. That day the new store made around 80,000 sales and the following day, The Daily Telegraph reported on the opening: Women Faint in Pitt Street Crush. People Rush New Store. Amazing scenes were witnessed yesterday when the doors of Coles Stores, in Pitt Street, were thrown open to the public for the first time. Inside a mass of humanity stormed the counters. Several women fainted they were attended to by a matron employed especially for such a contingency. Meanwhile, the brothers had decided a major, central- Melbourne store was required to become the flagship of their

6 growing enterprise. The second directors meeting, held back in December 1927, had focused almost solely on the proposal to buy the Cole s Book Arcade site, as the company searched to lay down new roots for its expanding empire. A bid of up to 205,000 had been approved by the company to acquire the site, upon which they intended to build their No. 12 flagship store the largest variety store in Australia. Coles bought the property at auction and immediately commissioned architect Harry Norris to design the impressive art deco building upon which no expense was spared. GJ was justly proud of his company and wanted Coles opulent administrative headquarters and Store No. 12 to reflect its achievements. The new store was opened on March 21, It was Australia s largest variety store and boasted over 3000 items spread across two floors. It also offered a range of refreshments with a quick lunch counter, soda fountain, cake store and Australia s most modern cafeteria, which, with seating for over 1000 people, was located on a separate floor. Indeed, the entire first floor was devoted to the cafeteria, which was truly a sight worth seeing, with its beautifully coloured tiled walls and artistic ceilings. GJ was extremely proud of the technical features of the cafeteria: two subveyors the first of their kind to be used in Melbourne carried dishes from the cafeteria to the kitchen on the second floor. The main dishwasher, weighing two tons, handled 10,000 dishes per hour. The dishwasher, customers were assured, sterilised all dishes, [which] passed through three lots of water. No expense was spared on the architectural details of the building, either. The shop fronts on Bourke and Little Collins Streets had emerald pearl granite bases and rounded, plate glass entrances. Marble stairways led to the basement and ground floors, both of which featured enriched ceilings with pierced decorative grilles to the ventilation ducts. All the staircases had detailed futuristic wrought-iron balustrades with chromiumplated hand rails. The store opening was an enormous success and claimed to be the talk of Melbourne there were over 120,000 customers that day. Window displays featuring Coles Special Tea, a newly introduced line, contributed to sales of 1050 pounds of tea in the first ten days of trading. Goldfish became a novel addition to the garden department and proved to be quite an attraction. But Store No. 12 was not simply a new branch. Its greater significance was outlined in the staff magazine of the time, Colesanco: The opening of our new store in Bourke Street brings home to us more than ever our increasing responsibilities towards our shareholders and the public This building is really the nerve centre of the organisation, and it is from here that the operations of the company are controlled. Helping Australia grow The excitement of the opening of No. 12, however, was dampened by increasing economic problems. The Great Depression that had begun in America in 1929 with the Wall Street stock market crash had begun to more seriously affect Australia by the early thirties. About one third of Australians lost their jobs so were unable to pay for life s staples including food. People made do as best they could, and soup kitchens were set up all over the country. The first dietary surveys were undertaken by the Australian Government in the late 1930s, and the effects of poor nutrition could be seen as children of The Depression grew into teenagers. Store No. 12 reported that one ton of cake was sold on one day of the sale alone Many retailers were forced out of business during these difficult economic times, but Coles merchandise and pricing policies ensured that the company continued to attract a large customer base prepared to buy goods. Many stores had held a Reduce the Cost of Living sale, which included a number of Necessity Specials on its food items, drapery lines and crockery. The promotion must have worked, because Store No. 12 reported that one ton of cake was sold on one day of the sale alone. By the time The Great Depression hit, Coles was selling an increasing quantity of Australian goods. At the 1929 annual meeting GJ told shareholders that We are pleased to see each year a large increase in the number of Australian factories on 27

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8 1. It wasn t all business at Coles; there was always time for some fun as well! 2. If you want to be a Coles girl 3. Store basketball teams, Embassy chocolate was a huge hit. 5. The Coles Embassy brand had a wide and varied range of products. Then and now Coles own brands from Embassy to Coles Finest Coles Embassy brand was launched in The first line to bear the label was gramophone records, retailing at half a crown each. They were enormously popular, with 2587 of them sold during the first week alone. Within a few months they had become the company s best selling record label. By the end of 1932 Embassy was a trusted brand of cutlery, electric light globes, spark plugs and paint. Eventually it became Coles most successful own brand and was applied to hundreds of items ranging from mothballs to perfumery. It remained a major house brand for more than sixty years but was eventually discontinued in Farmland was introduced as the major Coles brand after Embassy, and these days Coles brands include Coles Finest, Coles Smart Buy, Coles Simply Less, Coles Simply Gluten Free, and Coles Organic. Today, Coles branded products represent about one in four products sold at Coles and many are award winning, such as Coles Brand Classics Chocolate Ice Creams 4 pack Gold Award winner at the 2013 Dairy Industry Association of Australia annual awards for excellence. our buying list, and look forward to selling a larger percentage of Australian-made goods. We point to the confectionery industry as an example of what can be done in this country. Last year we sold over 100,000 worth of Australian-made sweets, and less than 1000 worth of imported sweets. To further combat the effects of The Great Depression, in April 1930 Coles launched a Made in Australia campaign. By August 83,000 employees, customers and suppliers had pledged to give preference to the purchase of Australian goods. Within stores, a blue sticker was placed on all Australian made goods, and posters were placed in all windows directing customers to these stickered products. Large signs above shelves reminded customers to Buy Australian Goods. A quarter of a million leaflets were distributed each month for six months promoting Coles blue badge of honour and outlining the Australian goods available. The company even held a window dressing competition featuring Australian goods. GJ approached the Master Drapers Association seeking its support to back the campaign and the pledge, and offered to provide the prize money for the best windows. Once he had the support of the association, on April 15 he placed a large notice in The Herald encouraging others to follow his lead. The notice, which was headed Who will join me in being OPTIMISTIC? included these words: Australia is a land of optimism! Don t say Times are bad, I ll wait a few months before buying a new suit. Now is the time to buy to buy AUSTRALIAN goods. Keep Australian money circulating in Australia I appeal to all Australians to join with the staff of our company and myself to be optimistic of the future, and to voluntarily pledge themselves to buy Australianmade goods whenever possible. This positive attitude towards the Australian economy and Australian suppliers continues today, with the Australian made and Australian grown campaigns helping customers to identify locally produced food. Pushing on Unfortunately, by 1931 the grim reality of The Depression had begun to affect the Coles brothers and dissipate even GJ s optimism. A profit was still recorded, but it was at a decreased rate for the first time since They realised that they would need to make some changes if they hoped to trade through to better times. At a Board meeting in January 1931, the directors unanimously agreed to reduce their own fees further in a concerted attempt to cut costs; they were determined that no Coles people would lose their jobs. Meanwhile, Coles employees realised how precious their jobs were and, grateful that their employment was comparatively secure, they made extra efforts. It was a common feature of these desperate times that everyone was prepared to muck in, as Dave Davis (later to become the company s most senior buyer) recalled. I remember Les Hyde, who was to become the London office manager. The first job I got him to do was take off his boots and socks and go into the lift well of one of our newly acquired buildings and clean out all kinds of rubbish and rats and goodness knows what. It didn t matter then, you just did the job; it was depression days so a job was a job. 29

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10 2. 1. Coles Parramatta, NSW, An advertisement to employees for the social event of the year the Coles Annual Ball. 3. Soda, anyone? The first floor cafeteria of the new flagship Store No. 12 in Melbourne, Toffee counter display in Store No. 9, Richmond, Vic.,

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12 1. Store No. 66, Bairnsdale, Vic., Coles has always been proud of its Australian heritage and what it can do for local communities. 3. Employees as they were at the famous Store No. 12, early 1930s. 4. Before abandoning its Nothing Over 2/6d policy, Coles sold hosiery by the leg to ensure the sale still satisfied the slogan. 5. One of the many circulars sent around to the local communities in which Coles stores were opening in rapid fashion. The directors recognised that employees were under increasing strain. Many sales girls had become the sole bread-winners when male family members lost their jobs, and so, in an extraordinary example of Coles family values, the management committee of June 1931 agreed that any members of our staff who require a loan can be accommodated Notice of this to be given to the stores. Following a suggestion from Mr Alfred J Daniels, manager of Store No. 12, the management committee in August 1931 agreed to provide 400 free meals each week to unemployed girls. The company set about issuing tickets to the value of sixpence to the needy, which they could then exchange for a meal in a Coles cafeteria. By November the number of tickets issued had been increased to 560 a week and by the end of that month 4891 had been presented at Coles cafes. Despite The Great Depression continuing to take its toll on the Coles company, 5 per cent of net profit a total of more than 4200 was still distributed to hospitals, nursing homes, unemployed relief funds and special appeals. This charity vote of 5 per cent had first been introduced by the Coles Board in July 1922, as GJ believed that giving to charity was a business and a social responsibility and that the profit motive must be linked to an altruistic motive. GJ s grandson, Donald, explains how the ethics of supporting those around you still runs through the family today. My father Jim didn t join the Coles business and neither did I, but GJ passed onto my father the vital importance of social and business ethics, and he passed that onto me. I grew up knowing that in business, you should do the best you can, not just for shareholders but also your employees and suppliers and that this was a critical part of long term business growth. You just can t divorce that from our family history and I m proud to say that I can pass those values onto my children because of the experiences of GJ and his brothers and what they did for the communities they worked in. Business and social ethics are even more important today than they were one hundred years ago. And it wasn t all bad news. Despite the decline in profits, trade in Coles cafeterias had increased considerably, prompting the directors to recommend substantial development of the burgeoning cafe division. It was their aim to serve a meal to our customers as wholesome and economical as can be cooked in their own homes. The end of an era In the twenty-five years since the first Coles store opened in 1914, Coles customers had been accustomed to seeing banners across the shop fronts proclaiming Nothing over 2/6 and knowing that this was indeed the case. However, this policy ended in 1939; inflation meant that the company could no longer produce the range of merchandise required to preserve the spirit of the slogan. Indeed, they were already stretching the truth a little when they began selling hosiery by the leg! The Board realised that it was impossible to continue the policy but voted that no announcement should be made to this effect. Instead, the signs proclaiming Coles Stores Nothing Over 2/6 were quietly removed in November that year and a new era of Coles retailing began. By the end of the 1930s, and after a quarter of a century in business, the Coles company had floated as a public company on the stock exchange, had overcome the trials of The Great Depression, and had been completely exonerated by the government s chain store enquiry. It seemed as if at last the company could focus on progress and growth unhindered, but unfortunately, a grim new chapter in the history of the world was about to begin; on September 3, 1939, England declared war on Germany. Remember when 1928 The first talkie film to be screened in Australia, The Jazz Singer, premieres in Sydney Australia begins to experience the harsh realities of life during The Great Depression The Sydney Harbour Bridge is officially opened on March Sydney s first traffic lights become operational on the corner of Kent and Market Streets. Windscreen wipers become compulsory on all Australian cars White Australia celebrates 150 years of European settlement; indigenous Australians hold a day of mourning Britain declares war on Germany. Australia enters the conflict immediately.

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14 CHAIN STORES INQUIRY In 1936, the strength of chain stores was brought before the NSW Parliament. The charges decried the unfair methods adopted by chain stores against independent retailers and wholesalers, and any person who had charges or complaints to make against the stores was asked to submit them in writing or in person. In responding to the complaint that chain stores only employed juniors, dismissing employees when they reached the age of twenty-three, Coles invited the NSW Royal Commission to inspect Coles personnel department, where complete records were held on all employee hirings and dismissals. The Commission was soon satisfied that Coles was innocent of any exploitation of personnel; on the contrary it was surprised to learn that Coles female employees were paid on average 22.5 per cent above the award rate. Suppliers provided samples of merchandise for the court to examine and provided details of costs and selling prices, proving that all goods were supplied by firms that did not employ sweated labour. The court was told of the employee benefits enjoyed by Coles people, about the range and quality of goods available to Coles customers and about the excellent returns enjoyed by Coles shareholders, many of whom were also employees and customers. Coles produced documentation covering its policies, principles of operation and employee remuneration. In a case of bureaucracy gone mad, the inquiry lasted nearly three years. Five volumes of evidence consisting of 3000 pages were compiled. Judge Brown made extensive visits to Coles branches and to a number of its suppliers, and on July 21, 1939, he recorded his judgment, the essence of which was: 1. Not one single instance of employees being underpaid The allegations have been recklessly made and without the slightest justification. 2. Chain stores do not produce unfair restraint of trade, unfair methods of competition or a lowering of the standard of living. 3. Substantially, by far, the greater part of their stocks are purchased from well-established and reputable Australian manufacturers. 4. The margin of profit was no greater and frequently less than those of general and department stores. He concluded by saying: Chain stores succeed because they deserve success. The impressive interior of store No. 12 in the centre of Melbourne, just prior to opening in 1930.