Woolworths names former liquor boss Brad Banducci as CEO; reports first half loss $972m
The task of rebuilding the battered Woolworths brand has been handed to the former boss of its liquor division, Brad Banducci, who came to the business five years ago.
The announcement came as the retailer posted a $972.7m loss, driven in part by the failure of its Masters Home Improvement joint-venture with Lowes.
Woolworths is being forced to pay out Lowes’ share of the business before it exits the sector later this year. The loss is the first since the company listed on the ASX more than two decades ago.
Earlier this month Woolworths shocked its ad agency, Leo Burnett, by announcing it was returning to its former agency, M&C Saatchi as the business desperately tries to find traction with consumers against strong competition from Coles and the growing influence of German discounter, Aldi.
The marketing of the business has seen a revolving door of leaders over the past three years, with former Coles marketer Tony Phillips departing the role last year, replaced recently by liquor group marketing general manager Andrew Hicks.
Woolworths was also dethroned by Telstra as Australia’s most valuable brand in the 2016 Brand Finance Most Valuable Brands report.
The internal appointment of Banducci, currently managing director of Woolworths’ food group, comes after a worldwide hunt for a new CEO.
Banducci was instrumental in the development of the Dan Murphy’s brand and has worked across retailing for 15 years.
Banducci has pledged to bring an entrepreneurial spirit to the role as the business regroups after a disastrous year which, aside from the failure of Masters, included the highly-criticised decision to drop Qantas from its loyalty scheme, an embarrassing social media miscue with the ANZAC veterans’ “Fresh in our memories” campaign and the labelling of home vegetable growers as “freaks”.
“I am an entrepreneur at heart and a retailer by discipline and I want us to take our company back to its best levels of performance,” Banducci said in a statement announcing his appointment.
“My goal as CEO will be to recapture the spirit of innovation and customer focus right across the business, and grow a culture once again where our people feel a strong ownership of the business.”
Banducci’s appointment also marks the departure of CEO Grant O’Brien, whose retirement was announced last year.
Announcing its first half results for the 2016 financial year, Woolworths revealed a loss of $972.7m, down 176%, which included a $125m loss in home improvement, including a $137.9m loss on Masters and a $12.9m profit on Home Timber & Hardware.
While the company said it had made inroads on some objectives, it highlighted areas that still needed to be addressed, including the need to “urgently address the Woolworths’ Rewards in-store ticketing issues” which led to a consumer backlash against changes to its loyalty program.
Simon Canning
I’m a Woolworths shareholder and try to keep supporting the store by shopping there. But when I walked into one 2 days ago in affluent Peppermint Grove the store looked shoddy: shelves promoting bargains were totally empty, staff were distracted, big trolleys to stock shelves were just lying around, blocking access to aisles. it reeked of a place not well-run. Can see why Coles is running rings around their rival just now. Woollies, lift your game! And stop wasting our money on poor decisions like paying fat fees to substandard advisors and former execs!
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Good luck. Watch your back. Aldi is coming at you hard !
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………after a worldwide search for a new CEO we have appointed one of the team who helped us turn a good profit into a spectacular loss. Yup, that would be right..
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Thanks Brad. Forty of us are now unemployed because no matter how hard we tried, nothing was ever good enough for you and your team. The comms we produced were driven by your team. Your spectacular failure as a brand was not our agency’s fault. You never listened and rejected some of the finest retail ideas I have ever seen. If you think changing agencies is the solution to your problems then there’s a huge surprise waiting in the wings. Woolies will continue to slide into an irrelevant brand. The problem lies in the fact that you guys don’t have a good business strategy and no agency, no matter how good they are, will help you out of the mess you’re in. You treat your farmers and suppliers appallingly and it shows in store. Karma is patient and knows your address.
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Ok is anyone else feeling as confused as I am? Is this really what the global search led to?? I was really expecting more from Gordon or is it that no one else wanted the job? Woolworths now has one of the worst loyalty programs ever which was launched under Brad and things seem to have gone from bad to worse under him. Im not so sure this was the right choice but good luck to Brad. Rightio.
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I say, I say, I say, what’s Woolworth? ……….Well, it used to be a very successful retail chain, then a swag of supermarkets employing marketing managers and selling groceries, including many thousands of cans of beans….. Then came the bean counters and the axe-men, and the bigger than big ideas which developed into arrogance and later supreme arrogance…followed by a huge bungle, a stumble and a tumble. Quo Vadis?
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Aldi isn’t the problem. Woolworths is the problem. Good luck Brad. Doing anything with the supplier and customer in mind would be a step change.
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Jacqueline, your post reminds me so much of a presentation Ian McLeod made at a conference I attend a few years ago. He basically showed photos of Coles shelves being half empty, out-of-date bread, no milk in the dairy cabinet, boxes and crap everywhere, and trolleys that weren’t even fit for the dump.
Why did he show them? Because one of the first things he did when he came to Australia he ‘walked the aisles’.
The next thing he did was shook Coles out of their sloth and quickly shifted them to #1. So, on this basis there is hope for Woolworths – though I suspect that promoting internally and not being open to ‘the shock of the new’ means the boat might be sailing.
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