‘Winning back trust’: Big job for new Woolworths boss as gauntlet of price scrutiny looms

Four Corners, ABC

The incoming boss of Woolworths has a big job ahead rebuilding trust with consumers, as Australia’s largest grocery chain attempts to change the guard amid intense public anger over high food prices.

Woolworths Group chief executive Brad Banducci announced his retirement from the company on Wednesday, revealing his replacement will be long-standing company executive Amanda Bardwell.

The shock move came just a day after a train wreck ABC interview with Banducci aired in which he stormed off the set after being pressed about grocery prices and rising profits.

And while Woolworths claimed the resignation had nothing to do with the interview, it’s clear the chain now faces a turning point amid growing calls for a supermarket crackdown.

A gauntlet of scrutiny awaits Bardwell – currently head of digital division WooliesX – through a series of public inquiries at federal and state levels examining grocery prices.

There are urgent business priorities too, including trying to turn around department store chain Big W, which has been struggling to compete with the likes of Kmart and Amazon.

Retail Doctor Group chief Brian Walker said Woolies’ incoming boss has the big task of rebuilding public trust following a bruising period as consumers have been hit by inflation.

“She has to be very open, transparent and communicative,” Walker said of Bardwell’s task.

“It’s a matter of winning back trust … they can’t sweep it under the carpet. They have to publicly acknowledge the inquiries and conversations taking place [about grocery prices].”

Public anger at Woolworths and its rival Coles has peaked recently after the cost-of-living crisis flowed through to supermarket shelves over the past two years, squeezing families.

Both major supermarkets, which together control two-thirds of the market, have posted profits during this period while margins have either remained stable or increased slightly.

That combination of ongoing profits and rising prices has sparked criticism from shoppers on social media, columnists in major newspapers and even Prime Minister Anthony Albanese.

Those criticisms were again echoed on Wednesday when Woolworths posted almost $1 billion in after-tax profits for the six months to December and a slight bump in margins.

Food inflation eased to 1.3 per cent from 2 per cent in the prior quarter, Woolworths said.

ACTU assistant secretary Joseph Mitchell said the profits showed Woolies has too much power.

“Woolworths is not showing restraint here, despite financial pressures on workers’ budgets,” Mitchell said.

“High prices erode our standard of living just as much as a pay cut does. To post almost a billion dollars in a cost-of-living crisis points to the fact that Woolworths and Coles have too much power over their suppliers and ultimately their customers.”

Investors and analysts roundly applauded Banducci for his tenure as Woolies boss on Wednesday, crediting him with leaving the company stronger than when he arrived.

Walker said a major achievement of his leadership was shepherding one of Australia’s largest companies “into the 21st century”, with investments in digital and analytics.

“There were significant changes under his leadership, including the move to data. He absolutely led Woolworths very strongly there,” he said.

But Banducci’s time at the helm has also been plagued by scandal, most notably the uncovering of more than half a billion dollars in wage theft.

The company has yet to repay workers the entire amount it owes them.

Several business challenges also remain at Woolworths, not least of which is ailing department store Big W, which saw sales sink 4.1 per cent and earnings plunge 32 per cent in the half year.

Walker said Woolies’ new leader will need to ask some tough questions about the future of Big W, which is uncomfortably sandwiched between Kmart in stores and Amazon online.

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