Sales momentum continues for Woolworths as board braces for wage scandal grilling
Supermarket giant Woolworths has indicated its trading for the first half of the financial year has been “pleasing” thanks to a strong performance from its Lion King ‘Ooshies’ and Discovery Garden collectibles.
In a speech at the company’s annual general meeting in Sydney on Monday, chief executive Brad Banducci said it had been a solid start to the financial year.
While not providing trading figures, the company head said positive sales momentum had continued across the company, including its food, department stores, and drinks division.
In the first quarter of the 2020 financial year, sales were up 7.1 per cent, including a comparable increase of 6.6 per cent for the company’s food division, driven by its Ooshies collectable campaign.
Mr Banducci said the company’s newest collectable offering, a set of herb and flower seedlings, had continued to help sales.
“Sales growth in Australian Food was particularly strong with the success of Lion King Ooshies, Discovery Garden, the continued growth in online and the ongoing benefit of our renewal program,” he said.
Woolworths renewal program has seen the company give 68 of its stores a facelift in the previous financial year, which includes the company’s first ‘smart store’ in Gregory Hills.
“We can’t comment on [the second quarter] in detail at this stage given we still have two very important trading weeks in the quarter to go but are generally pleased with trading to date,” Mr Banducci said.
“We remain energised by the material opportunities we have across the Group to deliver value for both customers and shareholders over the remainder of F20 despite some uncertainty around the consumer environment.”
Both Mr Banducci and chairman Gordon Cairns also attempted to shine a positive light on the company’s $300 million wage scandal, which saw the retailer underpay 5700 staff for nearly 10 years due to discrepancies with the general retail award.
Mr Cairns said the issue was a “defining moment” for the company’s culture, and while it was “incredibly disappointing” he claimed it was a testament to Woolworths’s ethics, pointing to the extensive investigation into the underpayment and the pay cut taken by him and Mr Banducci.
Announced last month, Mr Banducci will forgo his short-term incentives, worth $2.6 million, and Mr Cairns will cut his chairmans’ fee by 20 per cent.
“The overwhelming reaction from our team, customers and shareholders has been positive affirmation for the way the company has behaved,” he said.
The chief executive echoed these remarks, saying Woolworths needed to lift the bar on achieving its core value of ‘always doing the right thing’, and re-affirmed more consequences for executives would be considered by the board following the end of the review.
Woolworths’ senior executives and board members are expected to face a grilling from shareholders over the underpayments scandal today, along with questions from union members over conditions in the business’ horticultural supply chains.
Later in the day, shareholders will also vote on the company’s $10 billion demerger of its drinks and hotels business, which will see a separate entity, Endeavour Drinks, likely list on the ASX next year.
Most Viewed in Business
Source: Thanks smh.com