Woolworths demise 15 years on: What happened at the retail giant and could it come back?

Published

2 years ago

January 6, 2024

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Parachuted in to turn around a failing giant of the British high street, Robert McDonald was part of Woolworths’s last roll of the dice.

The new finance director said he was excited to join an “iconic” brand when he began work in early November 2008, but just three weeks later the company would sink into administration.

And there was little the company’s last ever executive hire could do to stop the famous store – known for its pick ‘n’ mix, homeware and everything in between – from closing for good on 6 January 2009.

“Like everyone my age, I had grown up thinking its existence was a normal part of life,” Mr McDonald told Sky News.

“I was very pleased to have the opportunity to work there. I knew it was going through hard times and looked forward to being able to help.

“But, sadly, it was past that by the time I joined, and the end seemed very swift.”

Analysts blame its downfall on a toxic combination of low cash reserves, lost credit insurance and crippling debt – all exacerbated by the 2008 financial crisis.

It marked the end of Woolies’s near century-long presence on the high street, with more than 800 stores closed down and about 27,000 jobs lost.

For many of its staff, news of Woolworths’s demise into administration came from the media, with earlier rumours confirmed in reports on 26 November 2008.

Paul Seaton, who had worked as a store manager and as part of the IT team during 25 years at the company, said his colleagues “crowded around the TV” to hear their worst fears confirmed.

“It just all fell to pieces after that,” Mr Seaton, now 61, told Sky News.

“The sad reality is Woolworths took 99 years to build, and it took 42 days from administration to the day the last door shut. 99 years of meticulous care and thought… gone.”

The board insisted administration wouldn’t detract from “business as usual”, Mr Seaton said, but that all changed when he was called to a meeting on 5 December.

He was among 500 senior figures gathered at Woolworths HQ, where each was given a letter written by administrators Deloitte notifying none would be paid another day and all had lost their jobs with immediate effect.

“We were summoned and told not to come back, all 500 of us,” Mr Seaton said, adding their passes into the building were deactivated on the spot. “The business only carried on for one month after that.”

While his time at the company came to an abrupt end, he dedicated time to creating a virtual Woolworths museum, preserving memorabilia and documenting the chain’s long history.

A store for the family

The first store opened in November 1909 in Liverpool, by New Yorker Frank Woolworth, who had already established the brand in the US.

In a prescient diary entry, he wrote during an earlier trip to Europe that “a good penny and sixpence store, run by a live Yankee, would be a sensation here”.

Such was the success of the UK counterpart, his successor Byron Miller reportedly beamed that “the child has long since outgrown the parent”.

Mr Seaton thinks the literal child-parent relationship was key to the store’s popularity.

“There used to be old adage that people need Tesco because everyone has to eat, and people trust Boots because you call the manager ‘doctor’, but they went to Woolworths because they love Woolworths,” he said.

“Have you ever heard a kid saying ‘mum I want to go to Tesco’? The whole reason I loved being a manager is kids and families loved coming to Woolworths.”

The store’s name lives on in Australia – though has no connection with US or UK equivalents – where it is the country’s largest supermarket chain and last year recorded a net profit of $1.62bn (about £87bn).

US stores closed in 1997, but the UK branches recorded a record profit topping £100m just one year later.

What went wrong?

Customers were still shopping at the UK stores, and in the firm’s final annual report the company made a slight pre-tax profit in 2007.

But even with some signs of recovery ahead of 2008, Woolworths had a terminal problem: modest cash flow and a £385m mountain of debt.

Retail expert Clare Bailey was among the consultants drafted in 2006 to tackle the mammoth task of detangling the company’s supply chain, which she says was collecting too much of some stock and too little of others.

As banks began to lose faith in Woolworths’s finances, the firm had its credit insurance withdrawn – meaning it had to pay suppliers immediately, rather than in instalments.

To make matters worse, many Woolworths stores were sold a few years before and rented back at a price that only appeared to increase over the years.

Left with fewer assets, little in way of cash reserves and no credit insurance, the retailer was not prepared for the coming shock of the 2008 financial crisis.

“Cashflow is like oxygen,” Ms Bailey told Sky News. “You can be profitable, but if you haven’t got cash to pay bills or for when something goes wrong, then that’s it – game over.”

The company reported a pre-tax loss of £90.8m over the first half of 2008 in September that year, despite launching the WorthIt range – promoting low-cost products – in 2007.

Losing sales and customers

One of the big issues Ms Bailey identified in the supply chain was a failure to keep evergreen products on shelves.

For example, she said only 20 stores out of more than 800 nationwide had the correct amount of coat hangers, a product that sells all year, while others bought far too many Christmas trees.

It meant money was “trapped in stocks”, she said, and would gradually turn customers away.

“And if you replicate that through other products, customers could find what they didn’t want, but not what they wanted,” she said.

“You might, as a customer, give them the benefit of the doubt a few times, but eventually they will turn to other places. So, they not only lost the sale – they also lost the customers.”

It’s this perceived neglect of the customer journey that small business growth expert Claire Hancott believes cost Woolworths at the turn of the century.

Footfall almost halved from 7.5 million in 2000 to around 4.5 million in 2007, she said, while the market for Woolworths’s once-popular CDs was shrinking as more consumers headed to the internet.

“Businesses can’t ignore these big trends, even if they won’t come into play for years,” Ms Hancott told Sky News.

“Blockbusters was a classic example, when they thought digital films wouldn’t take off.

“Woolworths wasn’t at the forefront of consumer technology and it’s so important to be looking 10, 20 years into the future – it takes a long time to prepare.”

Discount stores such as pound shops began to pop up on the high street, adding to growing competition that ultimately forced an attempt to sell the company in November 2008 for – ironically – just £1.

It was hoped a sale to restructuring experts Hilco would give them the job of repaying the debt, but the banks rejected the move.

The company went into administration just days later.

A false dawn, but will the sun rise on Woolworths again?

Ever since the company collapsed under the weight of its debt, rumours of a potential return to the high street have never been completely quashed.

A fake announcement – made by a social media account falsely claiming to be run by Woolworths – heralding a comeback was met with excitement in 2020, with savings platform Raisin UK reporting 44% of people discussing the store’s revival online “loved the news”.

In August 2022, pollsters at YouGov found 49% of survey respondents said they wished they could bring back Woolies – a far higher proportion than any other defunct chain.

But for all the hopes of an encore, some of those involved with the firm rue the time that has since been lost – and believe it may have even survived.

“I came in at the end of 2006, but the work we were doing can take three or five years,” Ms Bailey said. “Maybe they started too late.”

All but a small handful of the Woolworths stores were re-let to other retailers within a decade, she added, meaning the spaces “still had merit in the local community”.

“The inner workings of a business are quite complicated,” she said.

“But I think it’s a sad situation it collapsed, because – had they been given a stay of execution – they may well have been successful in turning it around.”

Ms Hancott agrees: “In another time, would it have crumbled? That’s the million-pound question that nobody will be able to answer.

“Had it not been in the midst of a crisis, then it may have survived.”

For Mr McDonald, a chance to draw on his experience handling company finances never materialised.

It was, nonetheless, a “fascinating experience”, he said.

“It’s such a shame we didn’t have longer to turn that business around,” he said.

“I joined as part of a turnaround plan, but it was too late to change the course of history.”

Business

Resident doctor strikes: I don’t want people to suffer but we have to walk out again, says BMA chief

Published

36 mins ago

November 13, 2025

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Resident doctor strikes: I don't want people to suffer but we have to walk out again, says BMA chief

The British Medical Association (BMA) has defended a new round of resident doctor walkouts starting on Friday, insisting medics’ pay is still “way down” compared with 2008 and that the government has failed to finish “a journey” towards restoring it.

BMA chair Dr Tom Dolphin told Sky News the dispute remains rooted in years of pay erosion that have left resident doctors far behind other public sector workers.

“When we started the dispute, […] the lowest level of the resident doctors were being paid £14 an hour,” he said.

“There were some pay rises over the last couple of years that brought that partly back to the value it should be at, but not all the way.

“The secretary of state (Wes Streeting) himself called it a journey, implying there were further steps to come, but we haven’t seen that.”

When asked if the row ultimately “comes down to money”, he replied: “In the sense that the secretary of state doesn’t want to or isn’t able to fund the pay increases to match the value that we had in 2008.”

Dr Dolphin argued that while “the general worker in the economy as a whole” has seen pay catch up since the 2008 financial crash, “doctors are still way down”.

The government points out that its 29% settlement last year was one of the largest in the public sector and was intended to draw a line under two years of walkouts.

How much do resident doctors earn?

After the most recent pay awards, in 2025/26 a medic just out of university receives a basic salary of £38,831 and has estimated average earnings of £45,900 after factors like extra pay for unsociable hours are taken into account, according to medical think tank the Nuffield Trust.

That average figure rises to £54,400 by the second year and a more senior speciality registrar earns an average of £80,500.

The BMA says that when the dispute started, the most junior doctors were making around £14 per hour. That works out at £29,120 per year for a 40-hour week.

That’s very close to the earnings of a doctor fresh out of medical school in 2022/23 – £29,384, according to Full Fact.

But that’s over a 52-week year without taking into account paid holiday or unsociable hours.

But Dr Dolphin said the deal still fell short: “The gap was biggest for doctors and needed the biggest amount of restoration, and that’s what we got.”

He defended the BMA’s use of the Retail Price Index (RPI), a metric rejected by the Office for National Statistics, saying it “better reflects the costs people face”.

Should resident doctors get a pay rise? Have your say in the poll at the bottom of this story.

‘Who do you think is treating the patients?’

With Chancellor Rachel Reeves preparing her budget amid warnings of deep cuts, Dr Dolphin said the BMA is not demanding an immediate cash injection.

“We’re quite happy for that money to be deferred with some kind of multi-year pay deal so that we can end the dispute and avoid having further industrial action about pay for several years to come,” he said.

“Money spent in the NHS is returned to the economy. For every pound you spend, you get several pounds back.”

When pressed on whether the £1.7bn cost of previous strike action could have been better spent on treatment and technology for NHS cancer patients, he hit back: “Who do you think is treating the cancer patients? It’s the doctors.”

Strikes will cause disruption, union boss admits

Dr Dolphin rejected suggestions that the dispute could destabilise the government, calling the idea “implausible”.

He admitted prolonged strikes have tested public patience, but said the government had left doctors with no choice.

“A prolonged industrial dispute makes people annoyed with both sides,” he said. “It is vexing to us that we are still in this dispute.”

“I don’t want patients to suffer,” he added. “I accept that the strikes cause disruption… of course that’s upsetting for them. I completely get that. And I’m sorry that it’s happening.”

Business

Anglesey chosen as site for UK’s first small nuclear power station

Published

36 mins ago

November 13, 2025

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Anglesey chosen as site for UK's first small nuclear power station

Wylfa, on Anglesey, also known as Ynys Mon, has been chosen as the site for the UK’s first small modular reactor nuclear power station, the UK government has confirmed.

Officials estimate the site in north Wales will support hundreds of full-time jobs, as well as 3,000 jobs in the local economy at the height of construction.

Work on the site is due to commence in 2026 with an initial programme involving three reactors. The location has the capacity to accommodate as many as eight small modular power stations in the longer term.

Politics latest: Starmer denies authorising attack on Streeting

Sky News understands ministers weighed up Oldbury in Gloucestershire as a possible site before ultimately deciding on Anglesey.

The project will be run by the publicly owned company Great British Energy-Nuclear and is supported by a UK government investment of £2.5bn.

Rolls-Royce SMR is set to design the UK’s first small modular nuclear reactors (SMRs), pending final contracts, which are expected to be signed later this year.

Prime Minister Sir Keir Starmer said: “Britain was once a world-leader in nuclear power, but years of neglect and inertia has meant places like Anglesey have been let down and left behind.”

He added: “We’re using all the tools in our armoury – cutting red tape, changing planning laws, and backing growth – to deliver the country’s first SMR in North Wales.”

The site is projected to supply electricity for three million homes – more than twice the number of homes in Wales. It is hoped the Wylfa reactors will start supplying power to the grid from the mid-2030s.

Eluned Morgan, the first minister of Wales, said: “This is the moment Ynys Mon and the whole of Wales has been waiting for.”

She added: “New nuclear is a step into the future, with secure jobs and secure energy guaranteed for the next generation. We have been pressing the case at every opportunity for Wylfa’s incredible benefits as a site, and I warmly welcome this major decision to invest in northwest Wales. Wales is once again leading the way.”

Small modular reactors are compact nuclear power stations, built as prefabricated units for on‑site installation, with the aim of being constructed more quickly than sites like Hinkley Point C.

Nuclear power is not new to the Welsh island. A station was first constructed in the 1960s and began generating electricity in 1971. The two reactors operated for decades before being shut down. Reactor 2 was decommissioned in 2012, followed by Reactor 1 in 2015.

Efforts to revive nuclear generation at the site have also been made before. In 2021, proposals to build a new plant were abandoned under the previous UK government.

Rhun ap Iorwerth, Plaid Cymru leader and MS for Ynys Mon, welcomed the investment, but aired caution over previous false hope.

He said: “Today’s announcement is significant for people on Ynys Mon and across Wales. It reflects years of hard work by both the Plaid Cymru-led Anglesey County Council and Llinos Medi – both as the current MP and former council leader.

“Since I was elected over 12 years ago, the future of the Wylfa site has remained a live issue on Ynys Mon. Whilst we’ve learnt from past experience that we need assurances now that this plan will actually be delivered, there’s no doubt that there’s a real opportunity here that we have to take advantage of.”

He added that his priority is “to ensure that the voices and interests of communities on Ynys Mon are represented at every step”, and that he has “always taken the view that we must make the most of the economic growth and job opportunities for young people that come with a new development at Wylfa”, while mitigating “the challenges” that such projects bring.

“The Welsh government also has a crucial role to play in these discussions. I want to make sure that Welsh government has real input, with Welsh interests placed at the heart of the development,” he concluded.

Business

Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Published

36 mins ago

November 13, 2025

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Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Some of the biggest names in music – including Coldplay, Dua Lipa and Radiohead – have urged the government to honour a pledge to cap ticket resale prices and shutout touts.

They have joined artists including The Cure’s Robert Smith, New Order, Mark Knopfler, Iron Maiden, PJ Harvey and this year’s Mercury Prize winner Sam Fender to sign a statement calling for a cap to “restore faith in the ticketing system” and “help democratise public access to the arts”.

Other signatories include the watchdog Which?, FanFair Alliance, O2, the Football Supporters’ Association and organisations representing the music and theatre industries, venues, managers, and ticket retailers.

In the statement, the coalition says new protections are needed to “help fix elements of the extortionate and pernicious secondary ticketing market that serve the interests of touts, whose exploitative practices are preventing genuine fans from accessing the music, theatre, and sports they love”.

Labour had promised in its manifesto to put a stop to concert-goers being scammed or priced out of events by touts using bots to buy tickets in bulk the moment they go on sale, which they can then sell on for huge mark-ups on secondary ticketing websites.

In government, the party again made that promise – but more than a year after it vowed action, and seven months since its consultation on the issue closed, there has been no clear indication of when new laws will be introduced.

The campaign comes as a new investigation from Which? found prolific sellers in locations including Brazil, Dubai, Singapore, Spain, and the US hoovering up tickets for popular events in the UK before relisting them at vastly inflated prices on StubHub and Viagogo.

How much?!

Which? found Oasis tickets for Wembley shows listed for £3,498.85 on StubHub and £4,442 on Viagogo.

A seat for the Minnesota Vikings vs Cleveland Browns NFL clash at Tottenham Hotspur was listed for £3,568.39 on StubHub, while a Coldplay ticket, also for Wembley, was £814.52 on StubHub.

And a ticket for the All Points East festival in London’s Victoria Park, headlined by Raye, for £114,666 on Viagogo.

The watchdog found it was often difficult for buyers to establish the seller’s identity or to contact them – despite the Competition and Markets Authority securing a court order in 2018 requiring Viagogo to outline the identity of traders.

And there’s more…

Which? also found evidence of speculative selling – when tickets are listed on secondary sites even though the seller has not bought them yet.

Tickets for a Busted vs McFly show in Glasgow, which were available through Ticketmaster – the original seller – were simultaneously being listed on StubHub and Viagogo at double the price.

Government to set out plans ‘shortly’

Which? consumer law expert Lisa Webb urged Prime Minster Sir Keir Starmer to commit to legislation.

A government spokeswoman said it is “fully committed to clamping down on touts,” had listened to comments in response to the consultation earlier this year, and would set out its plans “shortly”.