‘I’m not interested in your spin here today’: Woolies chief Banducci savaged in Senate
Greens Senator Nick McKim is not mincing words in today’s Senate hearing over the supermarkets’ alleged price gouging and anti-competitive practices, taking aim at Woolworths CEO Brad Banducci, and his attempt to “bullshit the committee”.
Woolworths and Coles are being questioned over price hikes and record profits during the cost-of-living crisis at a Senate inquiry in Canberra today.
McKim told Banducci, “I’m not interested in your spin here today,” accusing the beleaguered supermarket boss of “cherry picking” information regarding Woolworths’ $1.7 billion profit during the last financial year.
UPDATE: Banducci threatened with prison sentence in fiery Senate stoush
Banducci told the Senate the supermarket makes a 10% profit on funds employed, which he insisted was the average of a listed ASX company. “In the face of all of those facts, it is very hard to say that we are price gouging”, he claimed.
After McKim pressed Banducci for the return on equity, rather than on “funds employed”, which he suggested was around 26%, Banducci insisted on repeating the 10% profit line, to which McKim asked why he “wouldn’t answer a simple question.”
“We will come to those points later, but I’m not interested in those figures right now”, Mc Kim said, accusing him of attempting to “bullshit the committee” by not confirming this figure, as he “didn’t like the story it tells”.
“We focus on return on investment,” Banducci argued. “That is the key number that we should focus on and that is the number that is in our long-term incentives.
“It is a common corporate finance measure. It is the right measure: what return did we get on a dollar put into our business?”
Banducci argued against claims of a duopoly by saying Australians shop at different supermarkets for different needs, and when The Reject Shop, Amazon, Chemist Warehouse, and similar stores are included in the figures, Woolworths holds only a 20% market share.
“This as competitive as any place in the world,” Banducci claimed.
“We are part of a highly competitive, efficient and innovative grocery sector. With the arrival and growth of three of the world’s biggest and most competitive retailers – Aldi, Costco and Amazon – in Australia, consumers have never had more choice. And this is a good thing.
“In this context, it has never been more important to be price competitive. It is critical in trying to win our customers’ shopping basket, which we need to do on a daily and weekly basis.”
The Senate inquiry continues on Tuesday morning.
More to come.
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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