Inspired by overseas retail trends, Thomas Wardle opened Australia’s first discount grocery store in North Perth. As Tom the Cheap, he slashed grocery mark-ups to 10 per cent instead of the more usual 25 per cent. Despite resistance from suppliers, he eventually built a highly profitable national chain of more than 200 stores.
Today, the Competition and Consumer Act (which replaced the Trade Practices Act of 1974) forbids resale price maintenance. Back in the 1950s, when Thomas Wardle began his great experiment, it was common practice for manufacturers to fix a resale price for their goods. Authorised ‘specials’ sometimes saw goods being sold below cost, but generally retailers could command healthy margins. Wardle himself claimed that mark-ups averaged 25 to 30 per cent and sometimes up to 100 per cent. He called the grocery groups “bloody greedy”.
Some Australian self-service “cash and carry” grocery stores had been around since the 1920s. The mid-‘50s, when Tom the Cheap burst onto the Western Australian scene, saw self-service on the rise. Wardle relied on cheap premises, cheap female labour and cheap advertising to keep his prices down. The stores were ‘no frills’ self-service affairs. He refused to sell product below cost, but maintained a margin of 10 per cent.
Customers loved the price cuts and the first store was an instant success. However, the manufacturing and wholesaling establishment reacted with outrage. Many blacklisted Tom the Cheap. Wardle circumvented the bans by importing merchandise directly or making undercover visits to eastern states. He relied on secret brokers in the east to obtain goods on his behalf. Tom exploited the rebel, “bad-boy” image these battles gave him. His symbol became a convict in prison clothes, proudly claiming to be “Australia’s worst price-cutter”.
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More Tom the Cheap stores opened. By 1959 there were 15 stores turning over the equivalent of $1million. In 1962 the chain expanded to South Australia and by 1964, when the first New South Wales store opened, there were more than 100 Tom the Cheap stores in four states. New store openings were marked by “tub-thumping and ballyhoo”. Michael Symonds writes in One Continuous Picnic that one opening was attended by “police, marching girls, football heroes, a radio announcer, jazz bands and a belly dancer”. By 1971, there were more than 200 stores in the chain.
Thomas Wardle became Lord Mayor of Perth in 1967 and in the late 1960s and 1970s became a leading philanthropist. However, he began investing in property with disastrous results. In 1978 the business collapsed.