Woolworths maintains guidance, ready for recovery
Michael Luscombe, CEO of retailer Woolworths, today told the American Chamber of Commerce in Australia of his bullish outlook for his company and the Australian economy.
Woolworths, which announced an expansion of their Thomas Dux business yesterday, have maintained guidance for high single digit sales growth in the current financial year as their supermarkets get a boost from the downturn.
“We haven’t taken the opportunity to change our guidance because we don’t have to,” Chief Executive Michael Luscombe told Reuters after his speech.
Mr Luscombe predicted a strong recovery in Australia provided employment levels do not fall dramatically in coming months.
“If we can mitigate the loss of jobs, and focus especially on keeping our young people in the workforce, then I believe that Australia will only take a shallow dive in economic activity,” he said. “There is no doubt … that the number one fear of Australians right now is job security and nothing affects consumer behaviour more than fears about your job.”
Woolworths recently reported that yearly investment in their business would rise to a staggering $2 billion, a decision that caused Merrill Lynch to downgrade their recommendation on the retailer. Woolworths has, however, reached their enviable position in the sector by continued investment and Luscombe is confident that boosting spend will see them reap great rewards in coming years.
He added today that businesses must begin preparing for the recovery or risk being left behind.
“When we do come out the other side, it’s very important for businesses, particularly large businesses like Woolworths, that you are able to just put your foot down on the accelerator to full speed and not have to start the engine again,” he suggested.