Coles parent Wesfarmers has again downplayed the idea of investing in the back-office technology systems of the retail giant, saying most of the necessary expenditure had already been outlaid before its late 2007 acquisition.
In October 2008, Coles executive Terry Bowen — now Wesfarmers finance director — admitted Coles was still ordering many products through pen and ink, with some improvements required to get automatic stock replenishment systems of the sort enjoyed by rival Woolworths up and running.
Today, Wesfarmers CEO Richard Goyder repeated Bowen's line in response to a question from ZDNet.com.au during the company's annual results briefing.
"[Coles chief Ian Mcleod's] view is that the business is just not capable of introducing auto-replenishment, not withstanding the distribution centres and systems development," he said, referring to the "significant" investment Coles had made in its IT infrastructure and distribution centres over the three years before 2007 — believed to be up to $800 million.
"We have been doing some work on auto-replenishment," Goyder continued. "We will gradually bring auto-replenishment into the business as we can do it effectively and in a way where we don't create enormous upheaval in the business."
Work has commenced, however, on an overhaul of Coles' ailing liquor store IT systems, an initiative which McLeod said in April was designed to replace a "pretty old-fashioned" platform.
Today Wesfarmers said work had progressed on the update, which was in its early stages. But the company could not disclose any contracts it had signed with suppliers in relation to the project.
The debate over the fitness of Coles' supply chain systems has been going on for some time, due to what many in the retail industry have seen as the success of rival Woolworths' Project Refresh initiative. The project, kicked off in 1999, saw much of the company's IT systems completely revamped, in addition to other sections of the business.
Analysts today credit Woolworths' IT systems with being one of the critical factors in attracting customers, as the precise ordering control it provides allows the company to maintain fresher food stocks and to keep shelves full.
