The easy ride for some retailers is about to end. Coles was big, but in recent years it had the fighting ability of a beached whale. In the grocery sector Woolworths, Franklins, Aldi and the wholesaler Metcash (supplier to FoodWorks and IGA) will need to lift their game. Officeworks and Target do well, but Kmart struggled.

Every company operating in a sector in which Coles is a player will soon feel the heat of an invigorated Coles.

Coles will lift, and I suspect it will begin soon after Wesfarmers gets the keys. The speed with which Myer changed is our best recent indicator. Myer was regarded as a greater basket case than Coles – it was the gangrenous leg. The new leadership team, by listening to the team members and painting a vivid picture of the need for change, quickly turned the company around. Myer is on a mission to lift returns from 2% to 12%.

The simple fact of new ownership will have a similar effect at Coles. Freed from the previous leadership, a refreshed mindset will quickly prevail.

In the last decade, the best stories in Australian retail have been

  • JB Hi-Fi (very steep growth)
  • Super Cheap Auto (reinvented a category from petrol head to leisure)
  • Officeworks (modernised a sector and did it better)
  • Bunnings (who created a special workplace and a new type of store)
  • Myer (turning around a falling star and much loved retail icon)

Coles will now join that group.

The formula for a great management job is simple. It always involves transition, and there are really only four – rapid growth; new products or services; a change of culture or keeping something off the rocks. Provided at least one of those transitions is present and the manager feels they can positively impact on the transition, and be recognised and rewarded for their role, the job will be fun.

Coles will grow and develop a new culture. It may have new products or services and it might just need to be kept off the rocks. For the next five to ten years, the transformations at Coles will be one of the journeys of choice for the best people in Oz retail.

At a time when there is an up skilling of retail management and a looming talent shortage, Coles, Bunnings and Myer will present a threat to other retailers.

The threat is not because of their size, it is about the excitement of the journey providing the best career opportunities in the retail sector. Coles, Bunnings and Myer will be giant sponges soaking up the better candidates – the cream of retail.

That is the real threat to other merchants.