Woolies' mammoth challenge

There's not a soul in the land who doesn't think fondly of Woolworths. From the pre-war days of the Nix over Six price ceiling, Woolies has been the place Aunt Agnes took you for a treat from the Pick'n'Mix stalls that have probably been rotting teeth since Caesar's time. But today's grannies are more often to be found swigging back the cappuccinos in Starbucks while planning a holiday in the Algarve, and Woolworths is losing millions.

But the company is fighting back. Its decision to install Internet shopping kiosks in some of its stores makes sense on paper: customers can pick from a much wider range of products than can be held in-store and get them delivered to their homes a couple of days later. In practice, though, such ideas have proved unpopular. Virgin tried something very similar but gave up, saying that its customers thought the kiosks were just Internet access points and never quite figured out what the service was about. If those hip young dudes can't get with the programme, what chance has Aunt Agnes?

In any case, the point of Internet shopping is you do it from home and don't need to make a trip. The point of high streets is that you get your goods immediately. Internet shopping in a shop is the worst of both worlds.

It could be the best. Four out of five people over 65 don't use the Internet, and there are similar demographic shortfalls whenever you leave the affluent middle-aged middle classes. For those who don't like or can't afford the Starbucks life, the digital divide is a reality.

This is where Woolies still has a strong hand to play. It remains a comfortable, affordable, friendly place to be, and it would be a natural step to introduce cheap or free Internet access for its customers. Imagine an Internet cafe with Typhoo instead of lattes, comfy chairs in place of brushed aluminium. It would be a place to access all the services that are increasingly available online, sort out emails, even do a spot of shopping.

Society is not homogeneous, and Internet access should not be either. Woolworths still has a chance to use technology to revitalise its fortunes, but it should pick'n'mix from its strengths, not weaknesses.