Woolworths chief executive Brad Banducci to retire as company announces $781 million loss
Woolworths chief executive Brad Banducci has announced his looming retirement, as the Australian supermarket giant faces ongoing allegations of price gouging and unfair practices with suppliers.
His exit was announced on the Australian share market on Wednesday morning, at the same time as the company posted its half-year results.
The results showed a massive loss, despite food sales rising by more than 5 per cent and profit margins on Australian groceries increasing by 0.24 of a percentage point.
That may not sound like much, but the price increases in excess of rising costs equate to more than $60 million of extra profits on sales of just under $26 billion from this division.
Mr Banducci will retire in September, after almost nine years in the top job.
"I would like to thank Brad for his outstanding leadership and contribution," Woolworths Group chair Scott Perkins said in a statement to the Australian share market.
"Brad has led a remarkable turnaround and transformation of the Group."
The supermarket giant announced that it is promoting Amanda Bardwell to the top job, after an "extensive international search process".
Ms Bardwell has worked for the company for 23 years and is currently heading up its online grocery, e-commerce and loyalty sub-division, WooliesX.
Just this week, ABC's Four Corners aired footage of the departing CEO walking out of an interview.
Mr Banducci is still expected to front a Senate inquiry into food prices next month.
Woolworths half-year profit up 2.5 per cent
Mr Banducci's announcement comes on the same day that Woolworths Group released its profit results.
As well as supermarkets, the Group also owns Big W.
The group's overall results show a massive loss of $781 million.
That was after the company booked a $NZ1.6 billion ($1.5 billion) writedown in the value of its New Zealand grocery business Foodland, which it acquired almost a decade ago.
It also booked a $209 million reduction in the value of a stake in ASX-listed alcohol and hotels spin-off Endeavour, which owns bottle shop chains BWS and Dan Murphy's.
But excluding those one-offs, Woolworths announced a 2.5 per cent rise in half-year profit to $929 million.
That was based on a 4.4 per cent increase in revenue compared to the same period a year earlier.
As the cost of living rises, the company has been facing ongoing allegations of price gouging and unfair practices with suppliers, along with its supermarket chain rival Coles.
Woolworths results show its Australian food sales increased 5.4 per cent in the first half, and that pre-tax profits in that same division jumped 9.9 per cent.
Around two-thirds of that profit growth was attributable to WooliesX, which is the sub-division for online grocery sales that incoming chief executive Ms Bardwell heads up.
WooliesX first-half total sales jumped 27.5 per cent, while the division's pre-tax profits increased 132.3 per cent to $168 million, with its profit margin climbing 1.86 percentage points to 4.1 per cent.
Sales of home brand and "exclusive" products were also up 6.8 per cent.
Sales in its smaller Metro Food Store supermarkets were also up 9.1 per cent.
That was as more types of these "metro" or "local" types of stores were opened, and customers were out and about more.
Unlike traditional big-format supermarkets, Metro Food Stores do not offer flat pricing structures where all products except fresh produce are sold at the same price wherever you are in the country.
BigW sales weighed on the overall group's result, falling 4.1 per cent during the half with pre-tax earnings off 60 per cent.