Woolworths refuses to get tied-down by recession talk

Posted by Daniel Palmer on 10th October 2008

Woolworths CEO Michael Luscombe has told of Woolworths’ lack of belief in recessions, as the country’s largest supermarket chain continues to head toward their ambitious growth targets.

“At Woolworths, we don’t believe in recession and we never have,” he said at the Queensland University of Technology Business Leaders’ Forum in Brisbane yesterday. “Instead of thinking how do we stop spending, how do we stop hiring, how do we shed people? We are actually thinking and have a plan.”

“(We are thinking) how do we push this business as hard as we can over the next 18 months, how can we ramp up the number of stores we are refurbishing, how do we ramp up our new store openings?”

The current economic turmoil will force issues like sustainability into the background as businesses look to appease shareholders in troubled times, according to the Woolworths boss. “There’s no doubt the current global financial situation has the potential to push major issues like climate change well down the list of political and business priorities. After all, for a publicly listed company like Woolies, my first duty is to create and safeguard shareholder wealth,” he said. “But while the world’s leaders focus on shoring up our homes, super funds and investments, sustainability is at risk of quietly slipping off the agenda.”

Woolworths still, however, plan to stand by its commitment to reduce carbon emissions to 2006 levels by 2015, which, based on projected growth, would equal a 40 per cent reduction.

Mr Luscombe added that large companies like Woolworths had a responsibility to keep investing in the community, in spite, or perhaps because, of deteriorating conditions. “Times might be a little bit tough, but we actually have a responsibility as a large company to keep, wherever possible, investing in this community,” he said. “Because if we don’t, and we rely on everybody else to do it, then we will find the construction industry will have no commercial work to do, we will find employment rate continue to decline, we will find that suppliers are not getting the orders they need to keep their businesses afloat.

“Now is the time to be positive,” Mr Luscombe concluded.