Woolworths extends win streak against Coles

Woolworths CEO Brad Banducci at his Sydney office. Picture: John Feder

Woolworths boss Brad Banducci has put his foot on the accelerator and outperformed Coles in both store and online sales, extending his lead to 13 out of the last 15 quarters.

Costs were also better-controlled and those factors combined pushed Woolworths’ stock price up 2.7 per cent to $40.30, against a 1.3 per cent fall in Coles stock price to $18.68.

Banducci, personally, had a good year last year due to the vesting of past long-term stock awards and earned $9.5 million for the year, even after having forgone short-term incentives.

The latter was while the supermarket giant repaid underpaid staff, which is now almost completed.

Banducci’s fixed term pay was $2.6 million, with long-term shares totalling $5.1 million.

In the year he sold 130,000 shares, worth $5.2 million, but still has 195,808 shares left worth $7.9 million. They earned $184,059 in dividends last year.

Woolworths’ sales per square metre increased by 13.5 per cent to $18,079 - again ahead of Coles at $17,547.

But it was online sales which were the real winner for Woolworths, increasing 42 per cent to 5.5 per cent of total sales.

Coles also enjoyed an increase in online sales as the COVID lockdowns forced changes to shopping habits, but at just over 4 per cent of total sales it lies behind Woolworths.

Banducci said when states moved off lockdowns, online sales held, which suggests consumer habits have changed permanently during COVID.

The retailer has doubled its online capacity to deal with the extra volumes.

Woolworths has come under pressure in recent months for putting too much into capital expenditure, with little to show for it in sales performance.

But the latest results showed both tighter controls and higher returns.

Managing during COVID has also had its challenges, with increased costs and management in working out just how many staff would be impacted.

Banducci said the retailer had increased numbers by 20,000, expecting as much as 20 per cent absenteeism, but in the end the staff shortfalls were closer to six per cent, so fewer extra staff were needed.

The increased costs are shown by the second half earnings increase of 4.6 per cent, below the 15 per cent increase in earnings in Woolworths stores in New Zealand.

As expected, the hotel division showed big falls, with sales down 19.5 per cent in the lockdowns and earnings down 51 per cent to $17.2 million.

Big W returned to profitability with sales up 10.5 per cent to $4.1 billion.