Woolworths’ 3 most urgent priorities, Chairman
Woolworths’ Chairman Gordan Cairns has outlined three urgent priorities that Australia’s largest supermarket group needs to address in order to boost profits that he described as “unacceptable” at the Woolworths annual general meeting (AGM) held in Sydney late last week.
At the Woolworths AGM, Cairns reminded investors that its supermarkets are responsible for 70 per cent of the group’s profits, and accordingly has to be its main area of reinvigoration.
Cairns said that Woolworths had begun change by investing over $300 million in price reductions, along with adding more staff to stores, ensuring stock availability and performing store makeovers. Cairns however stated investor patience was required.
“Customers who abandoned us because we were uncompetitive will not suddenly switch back, and laying down our future pathway will not happen overnight,” said Cairns.
- Masters hardware division
Cairns identified Masters as the group’s next priority. Despite shareholders questioning whether the hardware chain will be sold off, Cairns said hardware was still a growing market in Australia.
“It is a growing market, with a high fragmentation, Cairns said. “There is plenty of room for a strong number two.”
Cairns stated that the group had identified Master’s competitive advantage but its execution had let them down. He said the business cannot continue on losing $200 million a year.
“When I joined I said I had an open mind on Masters, and that the Board would be informed by the numbers from the five year plan and our options from that. That is what we as a Board are working on,” said Cairns.
- Big W discounts division
Cairns used the AGM to announce that Big W is making currently making half the profit it was five years ago.
“The Discount Department Store sector is rapidly changing and is highly competitive,” Cairns said. “But we have not helped ourselves with our value proposition, some execution issues in IT, and a lack of leadership,” he said.
Cairns added that with good leadership in place, there is a clear path to improve returns and to prove more options going forward.