ASX 200

Woolworths CEO Brad Banducci to step down, group posts $781m half-year loss

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By Imelda Cotton - 
Woolworths ASX WOW CEO Brad Banducci

Woolworths Group (ASX: WOW) has confirmed that chief executive officer and managing director Brad Banducci will step down from the role in September after 13 years with the company and more than eight years in charge.

The news comes just days after a bungled interview with the Australian Broadcasting Commission’s (ABC) Four Corners program, in which Mr Banducci crumbled amid allegations of price gouging.

Despite speculation that the interview had precipitated his early exit from the group, Woolworths chair Scott Perkins said the company had always intended to announce Mr Banducci’s resignation today and noted plans had been in place since mid-2023.

The announcement was made to the market just before the release of the group’s half-yearly results, which highlighted a $781 million loss driven by one-off accounting writedowns and a 2.5% rise in underlying profits to $929m.

Mr Perkins thanked Mr Banducci for his contribution to the company.

“Brad has led a remarkable turnaround and transformation of the group […] working to strengthen existing businesses and build digital, e-commerce and analytics capabilities that are seen by our peers as world-leading,” he said.

“The test of any chief executive officer is to leave the business in much better shape than when they started.”

“On that simple metric, history will judge Brad to have been one of Woolworths’ finest leaders.”

Media blunders

Mr Banducci’s leadership was seemingly put to the test this week during a Four Corners episode delving into how the country’s biggest supermarket chains profit from rising prices.

When ABC reporter Angus Grigg questioned him on competition law, Mr Banducci became visibly agitated and then asked for comments he made about retired chair of the Australian Competition and Consumer Commission Rod Sims to be edited out.

After Mr Grigg reminded him that he was on the record, Mr Banducci walked out of the interview before being coaxed back in by Woolworths’ spin-doctors.

It was just the latest in a series of media blunders for the nation’s largest supermarket chain.

In 2023, the group found itself at the centre of three parliamentary inquiries on the cost of living, food security and pricing.

More recently, Mr Banducci received criticism for the group’s refusal to stock Australia Day products in Woolworths and Big W stores this year despite a gradual decline in demand for the merchandise.

Mr Banducci is now expected to front a Greens-led Senate inquiry next month into food prices and the market power of major supermarkets.

As the cost of living rises, Woolworths and grocery chain rival Coles have been facing ongoing allegations of price gouging and unfair practices with suppliers.

Promoting from within

Retail executive and long-term Woolworths’ employee Amanda Bardwell has been appointed to replace Mr Banducci in the group’s top job.

Ms Bardwell has been with the company for 23 years and currently leads digital division WooliesX, which is designed to leverage technology, data and loyalty schemes to drive profits.

She also has extensive experience in the food business, having previously been head of marketing for Woolworths Supermarkets.

“Following an extensive international search process supported by external consultants, we are pleased to announce the appointment of Amanda as the 13th managing director and chief executive officer of Woolworths as the group starts its next century of creating better experiences together for a better tomorrow,” Mr Perkins said.

“Amanda is a proven leader, business builder and modern retailer.”

“[She] is highly respected throughout the organisation and I know she, like Brad, will live our purpose and work hard to achieve Woolworths’ full potential.”

Ms Bardwell will take over from Mr Banducci on 1 September.

Weaker-than-expected profit growth

Woolworths financial results for the first half of 2024 showed weaker-than-expected underlying profit growth, which the group attributed to challenging trading conditions in New Zealand.

Group sales rose 4.4% to $34.6 billion, boosted by a 17.8% lift in online sales, while operating earnings rose 5.3% to $3.1b.

Approximately $1.7b in charges for goodwill writedowns on the company’s New Zealand food business and the fact Woolworths no longer has a controlling influence over hotel operator Endeavour Group are believed to have pushed its half-year result into the red, with a net loss of $781m.

Meanwhile, the top money-making segment Australian Food racked up sales of $25.9b (up 5.4% on the previous corresponding period), with gross margins rising 96 basis points to 28.9%.

Woolworths partly credited the expansion of profit margins in its Australian food business to “leveraging advanced analytics to reduce unprofitable promotions.”

It said strong profits derived from the Australian supermarkets division were able to compensate for challenging conditions for discount chain Big W and the New Zealand business.