Woolies Shifts From 'Turnaround To Transformation'
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Amazon day and the 2016-17 annual meeting of Woolworths shared the same date yesterday and for a retailer claimed to be in the sights of the online giant, the share price was rock steady, edging a few cents higher to $26.20 on the day.
Helping confidence among shareholders was no doubt the reassuring tone in speeches to the AGM from chairman Gordon Cairns and CEO, Brad Banducci.
A year ago it was all mea culpas and promises to do better as the giant retailer's exit from its $3 billion of losses on its hardware adventure and falling profits from its core supermarkets business consumed the headlines and shareholder attention.
Twelve months later and a sharp rebound in sales, earnings and confidence, there was a different message from the CEO yesterday. Mr Banducci signalled a shift in focus from price to customer experience as Australia’s largest retailer prepares to do battle with Amazon.
Speaking at Woolworths’ annual meeting in Melbourne, Mr Banducci said that while the retailer’s priorities in 2018 were largely consistent with those in 2017 as it went from rebound to transformation mode, the focus would shift to creating better experiences for customers, staff and the communities in which it operated.
"With this focus and our newly established ways of working we are committed as a team to deliver for all our stakeholders, including our shareholders," Mr Banducci said.
"As we look forward to the next 12 months, our focus is on building upon the strong foundation we have established in the last year to meet the changing needs of our customers, better train and support our teams and step-up our level of collaboration across our supply chain.
"Our priorities for F18 remain largely consistent with F17 however; we have changed the emphasis to reflect our shift in focus from ‘turnaround to transformation’. Key to this is our new Group Purpose.
"We are focused on ‘Creating Better Experiences Together’ for our customers, our teams and the communities within which we operate. With this focus and our newly established ways-of-working we are committed as a team to deliver for all our stakeholders, including our shareholders.
"In Australian Food, expect to see continued improvement in our fresh food, store format, customer engagement, range and, of course, prices.
"For New Zealand Food, we have indicated that F18 will be a year of investment as we invest in service, fresh and online to make sure we deliver on our customers’ needs and expectations,” he said.
Woolies does have a blackhole in Big W, but the first quarter sales data a few weeks ago showed signs of an improvement there and he was confident of an improvement there, telling the meeting:
"We have a new senior team and plan in place and have made some good early progress but it remains a very challenging sector and we expect that this journey will take time.
"We are fortunate that we have a committed and passionate team, a good store network and a brand that is still well loved by our customers. We see significant opportunity to improve the performance of BIG W,” The CEO added.
Chairman Gordon Cairns defended the BIg W performance and promised to do better:
“(W)e are convinced that we have a strong plan in place to regain sales momentum. We are resetting prices to regain price trust, essential in a discount department store.
"Rather than try and win in all categories, we have narrowed our focus to six ‘universes’: Kids, Home, Everyday Needs, His, Her and Leisure where we have stronger positions. And we are resetting our stores, to improve the shopping experience. “
One area that attracted a lot of attention, in fact it would be fair to say it dominated the meeting, was Woolies deep involvement with poker machine gambling through its ALH joint venture in hotels. It dominated Mr Cairns speech to the meeting yesterday, in which he said in part”
"Your Board understands that problem gambling is a very serious community issue. We acknowledge that there are people whose lives have been deeply and adversely affected by gambling, and their experiences have been moving and, in some cases, tragic.
"We take our responsibilities in this area very seriously….In the spirit of continuous improvement, we plan to do more.”
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.