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February, 2024

Woolworths Group CEO Brad Banducci to step down as grocery price and competition senate and regulatory investigations heat up

Woolworths Group has confirmed Managing Director and Group CEO Brad Banducci, will be retiring in September 2024 after 13 years with the supermarket giant and 8.5 years as its group CEO. The news comes just days after the executive was seen to storm out of an ABC Four Corners interview investigating the dominance and profits of Australia’s two largest supermarkets and allegations of price gouging, anti-competitive behaviour and misleading consumer behaviour.

The executive switch also comes as growing pressure is placed on Australia’s supermarket duopoly around continued high profits despite a cost-of-living crisis, and six related government and regulatory investigations in supermarket pricing, including a review of the Grocery Code of Conduct and an ACCC inquiry into supermarket pricing and competition.

In an ASX statement, Woolworths said Banducci was retiring by agreement with the Board, and will leave in September 2024, Woolworths Group’s 100th year. The group has named Amanda Bardwell as Banducci’s successor, effective from 1 September 2024.

Bardwell, a former marketing lead and 23-year veteran of the supermarket business, has most recently been in charge of Woolworths’ WooliesX division overseeing digital, customer and data. Bardwell holds a Bachelor of Business in Marketing from the Queensland University of Technology and a Masters of Business Administration from the University of NSW.

“On behalf of the Board and all of the Woolworths Group team, I would like to thank Brad for his outstanding leadership and contribution. Brad has led a remarkable turnaround and transformation of the Group,” Woolworths Group Chair Scott Perkins, stated.

“He has engendered a Customer 1st, Team 1st culture, worked to strengthen existing businesses and build digital, eCommerce and analytics capabilities that are seen by our peers as world leading. Most importantly, he has built a team of amazing calibre. Woolworths Group has been fortunate to have Brad as its leader and he has indeed helped us to be better together. The test of any CEO 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 Group’s finest leaders.”

Perkins said Bardwell was chosen following an extensive international search process supported by external consultants. The new chief is set to earn total fixed remuneration of $2.15 million per annum as Group CEO, plus a Short Term Incentive target of 100% of TFR with a maximum of 150% of TFR, and a Long Term Incentive annual grant up to 170% of TFR provided in performance rights.

“We are thrilled to announce the appointment of Amanda as the incoming and 13th Managing Director and Group CEO of Woolworths Group, as the Group starts its next century of creating better experiences together for a better tomorrow,” he continued. “Amanda is a proven leader, business builder and modern retailer. Most recently, under her leadership, WooliesX has gone from infancy in 2015 to a $7bn market leading business. Amanda is highly respected throughout the organisation and I know, like Brad, will live our purpose and work hard to achieve Woolworths Group’s full potential.”

News of the Group CEO change came as Woolworths released its half-year results to market, highlighting more than $900m in net profit.

The group reported group sales of $34.6 billion, up 4.4% on the first half of the last financial year, including group ecommerce sales of $3.95bn, up 17.8% on H123. Average weekly group digital traffic was 27m, also up 20.5% over the same period.

Group EBIT was also up 3.3% to $1.69bn while group net profits also increased 2.5% to hit $929m. In the report, Banducci described the first half as mixed, reflecting strong Australian food and B2B results but challenging trading conditions for Big W and New Zealand. Big W sales declined 4.1% in the first half, while EBIT declined by 60% to $54m.

“As foreshadowed last month, BIG W had a challenging first half. Outside of solid trading in key events like Black Friday and Christmas, customers are increasingly cautious and trading down,” he stated. “Lower sales together with elevated wage inflation and clearance activity to maintain inventory health had a material impact on earnings, with H1 F24 EBIT of $54 million, down 60% on the prior year.”

In the first half, WooliesX total sales increased 27.5%, spurred on by Direct to boot and Same Day propositions driving online growth. Improvement in fulfilment capabilities led to B2C Same Day fulfilment mix reaching 43% in Q2, with 85% of orders fulfilled within 24 hours of order placement. WooliesX H1 F24 DAP & EBIT increased 132.3% to $168 million. It’s a contrast to 12 months ago, when Woolies X was citing slowing ecommerce sales.

Woolworths also highlighted revenue in its Cartology media business increased 14.6% in H1 supported by growth in sponsored search through Cartology Promoted Products.