Will This Power Woolworths Limited Even Higher?

The Woolworths Limited (ASX:WOW) share price has been on a tear over the last twelve months, but that is nothing compared to the in-store frenzy.

The staff at Coles, owned by Wesfarmers Ltd  (ASX:WES), must be wondering where their customers have gone. For the past month supermarket giant Woolies has been turning kids against their parents… I mean offering customers a “free” collector’s disc for every $20 they spend in store.

On each disc is a Marvel Super Hero that belongs to a team. There are seven teams; each a different colour. Each team has six characters giving a total of 42 discs to collect. How do I know all this? Oh God, I wish I didn’t…

These discs can be found everywhere — the school yard, the soccer field, parents making trades on behalf of their children on Facebook. Unfortunately for those pint sized collectors, Woolworths have released “limited edition” characters (Green 42 Hulk and Black 18 Loki still missing from our collection…) and these are not so easy to find.

Sure, they are available on eBay and I can assure you people are paying a premium (last I saw was $89 for Hulk!) for those “rare” discs. And while I could hit bid and get into a price war to finish “my” set, I am choosing to teach my children some basic lessons in economics.

We started with the laws of supply and demand and have moved towards a discussion on opportunity cost. Tonight we will talk about price ceilings.

Woolworths have one customer returning tomorrow to fill her shopping basket with the hope of getting some more discs (no names, no pack drill). And while everyone else is getting into a frenzy over finding the elusive Hulk and Loki, we will sit back, wait and watch what the “disc trading” market decides.

Meanwhile, although I can appreciate the marketing genius behind the disc-induced madness, I won’t be buying shares of Woolworths. Instead I have my eye on this ‘under the radar’ consumer favourite that is both a hot growth stock AND our expert’s #1 dividend pick for 2017.


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Motley Fool contributor Erin Bouwmeester has no position in any stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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