Nick Tabakoff: New Woolies chief has to put the fresh back into supermarket giant
AFTER falling profits, executive scandals, hurried resignations and the departure of its chairman and CEO, Woolies has turned to the man who made the Dan Murphy’s chain mighty.
News
Don't miss out on the headlines from News. Followed categories will be added to My News.
THE “Fresh Food” dream has gone stale for retail giant Woolworths. Yesterday the company revealed a half-yearly loss of nearly $1 billion — its first in more than two decades — and its sharemarket value has plunged by $15 billion, which is a staggering $42 million a day.
As well as falling profits, the retailer has been plagued by executive scandals, hurried resignations and the departure of its chairman and CEO.
All in the past 12 months.
The biggest hit has come from the disastrous Masters hardware business, which was finally put out of its misery and closed down last month.
Budget retail chain Big W has had flagging sales and the core supermarket business has lost market share to Coles and German upstart Aldi.
One man has been given the daunting task of turning this nightmare around — new CEO Brad Banducci, who at 51 must be regarded as having the toughest corporate job in the land.
The former head of Woolies’ supermarkets division yesterday beat two international retail executives, including one said to be from UK food giant Tesco, to take out the top job.
It has taken Woolies an interminable eight months to name a replacement for outgoing chief Grant O’Brien, who presided over the catalogue of disasters and fell on his sword all the way back in June last year.
Yesterday Banducci joked that it had been “the longest job interview of all time” before adding diplomatically: “These things can’t be rushed.”
In his mind, the most dangerous threat to Woolworths’ business comes from Aldi’s combination of low prices and small stores.
“Aldi meets two customer needs: value and convenience,” he said.
He also confirmed Woolies’ woeful “Cheap Cheap” campaign would never be back. “We shot the birds,” he joked.
“We’ve got to do a better job of convenience, and we’ll do that in the urban centres by having smaller stores and slightly different types of products.”
Banducci’s other priorities are Woolies’ customers (25 million people go through its stores each week) and staff (a huge workforce of 200,000).
Asked about low morale among staff, he promised to “support them better ... so they can be successful in helping our customers. It is the most important thing we can do.”
Banducci admits there are also problems with the Woolworths Rewards loyalty scheme, saying it still needs “a lot of work”.
In response to complaints from customers that it forces them to buy products Woolworths tells them to, he hinted at change: “We’ve heard that feedback. Watch this space.”
He also confirmed Woolies’ woeful “Cheap Cheap” campaign would never be back. “We shot the birds,” he joked.
His first priority is clear: revamp the supermarkets. “We want the store experience for our customers to be better. We need to do better, then tell people about it — not the other way around.”
So, can the man who created the Dan Murphy’s liquor juggernaut when he was head of the business do the same with Woolies? He certainly isn’t daunted.
“I’m incredibly excited and energised, to be honest,” he said.
WOOLIES’ HORROR YEAR
February 2015
Supermarkets boss Tjeerd Jegen quits amid warnings of falling profits.
April 2015
Woolies is slammed over its “Fresh In Our Memories” Anzac Day advertising campaign.
June 2015
CEO Grant O’Brien announces his “retirement” amid the company’s sustained underperformance.
Woolies issues another profit warning and axes 1200 jobs.
August 2015
Big W boss Alistair McGeorge quits amid a scandal involving his workplace behaviour.
A week later, chairman Ralph Waters also resigns as Woolies’ profit plunges 12.5 per cent.
November 2015
New chairman Gordon Cairns says a new CEO could still be a year away and asks investors to “be patient”.
January 2016
Woolies finally pulls the plug on failed hardware chain Masters after five years of disastrous sales.
February 26
Woolies reveals a staggering $1 billion loss over just six months of this financial year — the first loss in 23 years.
Supermarkets boss Brad Banducci is appointed CEO.
If America can slash funding to its ABC, why can’t we do it here?
Donald Trump is now preparing to slash some $1.7bn from public media funding. That’s an ABC-and-a-half delightfully subtracted from taxpayer outlay, writes Tim Blair
Behind the fancy banquets, Xi’s China is in real economic trouble
Anthony Albanese may be looking for closer economic ties with Beijing just as China is suffering from severe overcapacity, unemployment, and bank failures, writes Maurice Newman.