Blog Poll: Should Thomas Dux Grocer customers be told that all Thomas Dux stores are fully owned & operated by Woolworths?

Please read this post with your "Consumer Hat" on, and answer the following Blog Poll on the right column afterwards:
 
Should consumers be explicity told that Thomas Dux Stores are fully owned & operated by Woolworths?

If you wish to add your comments please use the comment section at the end of the post.


In May this year, Woolworths bought Macro Wholefoods, an organic food supermarket chain of 9 stores for a repoted $30m from Brett Blundy's Retail Group, which had previously sunk millions of dollars into the stores and was happy to sell its loss making venture to Woolworths (although this was denied by co owner Pierce Cody)


As reported at the time in the financial media, Woolworths were interested in Macro stores for two primary reasons:

1. Macro had more than 100 organic private label products.
2. The acquisition of the 9 Macro stores would fast track Woolworths' entry to the high margin upmarket gourmet food market as the stores would be rebranded under the newly established "Thomas Dux Grocer" division of Woolworths. Thomas Dux was already operating and would have 11 stores in Sydney & Melbourne after the rebranding of the 9 Macro stores.

Macro wholefoods was the first large scale attempt by any food retailer in Australia to duplicate the likes of the impressive"Whole Foods Market" chain in the USA. These business models attempt to sell high quality organic and/or naturally grown fresh & packaged food products at higher margins.

Macro's business model did not manage to achieve the widespread reputation or get close to the high benchmark standrads of the "Whole Foods Market" and as mentioned earlier was rumoured to have always been a loss making venture for the astude Brett Blundy (in partnership with the founder Pierce Cody).

Woolworths have always been wary of the commercial fragility of a purely organic products based food retailing business model in Australia. Generally speaking, there is an immediate & direct negative effect on retail sales of organic food products when there is pressure on discretionary income.

Therefore the "Thomas Dux Grocer" employs a different business strategy altogether. On the official website, thomasdux.com the stores are promoted as being all about rediscovering all that is good & exciting about food, with fresh fruits, vegetables & deli products as well as speciality foods from around the globe.

The Thomas Dux format has the potential to introduce an innovative, exciting & much needed retailing format to the deprived consumers in Australia (compared to the USA), and it will most probably thrive considering that the business model has been designed & implemented by Woolworths, the most capable food retailer in Australia.

Nevertheless, there are certain aspects of the way the brand is being promoted which are rather disturbing.

Thomas Dux Grocer is being promoted to consumers as (quoted from the official website & full page ads in local papers):

"We're the local store: it's the place for people who love good food to shop every day. It's a meeting place that reflects the communities we serve. .....................Thomas Dux is about being 'just around the corner'."

The wording of the description of the business on the website, and design & wording of the advertisement in the local papers the emphasis on the "Local" aspect of the business are cunningly structured to promote the business and give the impression that Thomas Dux Grocer is like a "Small local family owned start up that is now expanding!". Not surprisingly, there is no mention of "Woolworths" in any of the promotions, on the website or (I suspect, although I am yet to inspect the stores closely) at any of the stores.


I acknowledge that not promoting or revealing the parent company is not an unusal business practice, is not necessarily a deceptive or misleading practice and in fact occurs in many industries to various degrees.

In case of the Thomas Dux stores, it is the "local, small, family feel" aspect of the promotional strategy that I take exception to.

Whilst I am sure Graham "Woolworths(!) Practices Act" & ACCC would not see any contravention of the relevant sections of the Trade Practices Act with the issue in my point, I am still of the opinion that the public must be informed when a local "Small Business" they shop at and perceive as an independent operator is in fact owned by a giant corporation with a massive market share and influence. I have also made this point about the many bottle shops and pubs that are owned by Woolworths & Coles (Westfarmers) in the past.

But none of the cases have seemed to be as belatently veiled as the Thomas Dux.

In many instances, consumers continue to support small local (& family owned) businesses even though they (at times incorrectly) perceive theses businesses as being more expensive to shop at compared to larger operators.

The Thomas Dux model & image fits both of the above. It looks like a local small business start up that is expanding, and it is more expensive than many other outlets with a similar or competing offer.
The Thomas Dux model & image fits both of the above. It looks like a local small business start up that is expanding, and it is more expensive than many other outlets with a similar or competing offer.

The dilemma is this: When giant retailers open small store formats in high streets in neighbourhoods under the pretence of "Local Store", should their customers be informed of the fact that for e.g. that in case of Thomas Dux Stores in Australia, they are in fact dealing with a major corporation with substantial marketpower as the parent company and the full owner of the business & not a small business operator?