Woolworths boss leaves supermarket with millions of dollars in payout as Oxfam declares Australians fed up with Woolies-Coles duopoly

Woolworths CEO Brad Banducci has reportedly left the supermarket giant $24 million in damages, as new research shows struggling Australians want more accountability from the big two supermarkets.

Banducci announced his surprise retirement in February of this year, 48 hours after a disastrous performance at Four Corners, in which he walked out halfway through an interview. His last day was Saturday, with his replacement Amanda Bardwell taking over from Sunday.

His tenure has been turbulent since he took over in 2016, with him steering Woolworth’s through the disastrous collapse of its Masters hardware division, followed by the Covid pandemic, the furore over the divestment of Australia Day merchandise and allegations of price gouging to consumers that led to a Senate inquiry.

Banducci’s realised salary in 2023 was $10,640,763, according to the Australian Council of Superannuation Investors report – but with accrued shares and bonuses if targets are met, his golden handshake could amount to $24 million, according to figures published in The Australian earlier this year.

Woolworths, which earns 2.5 cents on every dollar spent, this week reported an initial net profit of $1.7 billion, down 0.6 percent from a year earlier.

However, reported profit fell to just $108 million due to a $1.5 billion impairment charge on its New Zealand operations.

Rival Coles this week posted annual profits of $1.1 billion (up 10 percent). For every dollar a customer spends, the company earns 2.56 cents.

Australians struggling with the cost of living crisis, on the other hand, have had enough of the Woolworths-Coles duopoly, while the supermarket giants are making huge profits, non-profit organisation Oxfam has said.

Woolworths boss Brad Banducci (pictured) has had his final day as CEO of Woolworths, with a reported $24 million golden handshake and his replacement taking over from September 1.

The CEOs of Woolworths and Coles were repeatedly asked about political pressure and price cutting during their financial results presentations this week.

And scrutiny will undoubtedly continue, with an interim report from the ACCC supermarket investigation due to be made public in September.

The research focuses on the prices charged by supermarkets and the relationship between wholesale prices, farm gate prices and retail prices.

Coles and Woolworths control 65 percent of Australia’s supermarket markets.

The profit margins of major supermarkets, including Woolworths (pictured), have come under scrutiny during the investigation, with Woolworths and Coles previously accused of excessive pricing

Coles this week reported a staggering $1.1 billion profit

“It is unacceptable that while ordinary Australians struggle to put food on the table, Woolworths and Coles continue to report staggering profits,” said Lyn Morgain, executive director of Oxfam Australia.

‘It is clear that the Australian people have had enough.

“We need the government to step in and directly address the flaws in the system that are perpetuating this toxic situation.”

In addition to the ACCC investigation, which was ordered by Federal Finance Minister Jim Chalmers, the Queensland Government earlier this year launched its own investigation, establishing a one-off Supermarket Pricing Commission.

“As the inquiry progressed, it became clear that Queensland farmers did not feel empowered or protected to speak out against dominant retailers and to navigate the complex and unbalanced complaints system under the inadequate oversight of the Australian Competition and Consumer Commission,” concluded Tom Smith, Labor MP for Bundaberg and chair of the committee.

The Queensland study focused more on the price paid to farmers and producers than on cash prices.

But it did point to the duopoly’s two-thirds market share as a key factor in how the big companies set prices at every stage of the supply chain.

In Canberra, a Senate committee ruled on the supermarkets in April.

Oxfam Australia’s chief executive has argued that the huge profits made by Coles and Woolworths during the Covid-19 pandemic should be taxed as “crisis profits”.

Woolworths boss Brad Banducci (pictured) asked: “Can we take that out? Is that OK?”, then seconds later said: “I think I’m done, guys,” before walking away from a Four Corners interview

The chain’s decision to stop selling merchandise for Australia Day on January 26 sparked outrage among shoppers, with at least one store being sprayed with graffiti (pictured)

“While Coles and Woolworths didn’t make the crisis profits this year that we saw in 2021 and 2022, they still made huge profits that are of great concern to many people in the community given the high food prices,” Ms Morgain said.

Oxfam estimated that Woolworths made $5.6 billion in “crisis profits” in 2021 and 2022, as inflation soared and the pandemic and war in Ukraine were at their peak.

Woolworths investors will receive a fully franked final dividend of $1.04 per share for the year, the same as last year. However, there was also room in the pot for a fully franked special dividend of $0.40 this year.

Coles shareholders will receive 68 cents per share, up from 66 cents last year.

“The high-profit situation has improved somewhat, but there has been no fundamental change. That is unacceptable,” Morgain said.

‘A tax on the excessive profits of large supermarkets such as Woolworths and Coles would not only discourage price gouging, it would also boost the budget in difficult times and provide much-needed funds to tackle inequality and ease pressure on the cost of living.’

NewsWire understands the Treasury Department is not considering a crisis profit tax.

Latest data shows Coles and Woolworths supermarket inflation is falling. At Coles, overall supermarket inflation has fallen from 2.2 per cent to 1.5 per cent over the past six months.

Woolworths reported average retail food prices fell 0.2 percent and 0.6 percent year-on-year in the March quarter and June quarter respectively.

Inflation for food and non-alcoholic beverages is set at 3.3 percent this year, down from 5.9 percent in May 2022.

The Treasury has cited the ACCC investigation and the order for Choice to produce quarterly price reports as key measures to address rising food prices.

“It’s about families and farmers being treated fairly,” said a spokesman for the Ministry of Finance.

“Our efforts ensure our supermarkets are as competitive as possible so Australians get the best possible prices.”

Both Woolworths and Coles declined to comment directly on Oxfam’s comments.

A Coles spokesperson acknowledged NewsWire’s reporting on comments Coles’ CEO made during the week about its own inflation pressures and referred to the company’s sustainability report.

Coles donated the equivalent of 39.8 million meals to people in need last financial year, through disaster relief, hospital campaigns and medical research campaigns.

CEO Leah Weckert noted the “increased external scrutiny” when she presented the results on Tuesday.

Ms. Weckert was confronted with essentially the same question at least six times: “How can the public stomach a $1.1 billion profit when groceries feel so expensive to everyone?”

Coles cut prices on “hundreds” of essential and popular items and expanded the ways and times people could earn Flybuys points, Ms Weckert said.

If Coles didn’t make a profit, grocery prices would fall by 3 percent, she suggested. Coles has also saved $80 million by improving anti-theft technology.

Many Australian superannuation funds have a stake in the two supermarkets. Coles could not say how many people benefited through their super fund holdings. But people Coles considers to be “mom and pop investors” (fewer than 5,000 shares) own 20.5 percent of the company.

A Woolworths spokesperson said that as Australia’s largest private sector employer, the company had to strike a balance between delivering value to customers, “taking care” of staff and “treating suppliers fairly”.

The company had invested heavily in its extensive supply network to help it survive the natural disasters and the Covid-19 pandemic, the spokesperson said.

Last year, Woolworths donated $143 million in direct community contributions, 36 million meals to people in need and $15 million to charities providing food assistance.

Speaking on Wednesday morning, CEO Brad Banducci was asked how he could “with a straight face” claim that supermarkets were not fuelling inflation when the public was watching the company’s $1.7 billion profit – its profit before write-downs on New Zealand businesses.

“Large amounts can be misleading,” Mr Banducci said, pointing to windfalls from pension funds.

The interim ACCC report was handed to the government on Friday and will be made public, likely in mid to late September.