“We have significantly invested in price, service and customer experience in Australian supermarkets, appointed a new group and Big W CEO and announced our exit of the Home Improvement business”. Losses at Masters increased by 22.9pc to $137.9 million, on the back of costly store openings and mixed gross margins.
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But in stark contrast to Cole’s 4.3 per cent growth in comparable food and liquor sales, Woolworths comparable sales declined 0.6 per cent in the first six months of fiscal 2016.
Woolworths has also stated that Brad Banducci would replace the outgoing chief executive, Grant O’Brien as the company’s new chief executive officer.
In a statement to the Australian Securities Exchange (ASX), the company stated, “Despite financial performance, we are making progress in the rebuilding of Woolworths”.
Commenting on the appointment of Banducci, Woolworths chairman, Gordon Cairns said, “We undertook a rigorous worldwide search process to find the best person to rebuild the Woolworths business and return it to sustainable growth”.
Banducci, who joined Woolworths in 2011, said it was an honour to be appointed to the role.
Woolworths said last month that it planned to sell or wind-up its stake in the hardware unit “Masters” due to ongoing losses. The extent of the group’s troubles was underlined by its results for the fiscal first half, where it swung to a net loss of A$972.7m.
“We are not anticipating a significant improvement in comparable sales in [Woolworths’] Australian supermarkets in the second half with the market likely to remain competitive and price deflation likely to continue”, the company said. He has been with Woolworths for five years, including his role in leading the growth of Woolworths Liquor Group.
“However, trading remains volatile and there remains a lot more to do”, incoming CEO Brad Banducci said.
Mr Banducci was optimistic about the job ahead of him, saying Woolworths’ prices were now lower than those of archrival Coles.
Woolworths says its recovery plan is gaining traction, with signs that a hefty investment in reduced grocery prices is winning back customers from rival supermarket chains.
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Woolworths shares fell by up to 7 percent in early trading, in a flat overall market, but recovered by early afternoon to be up 3.5 percent as investors cheered the Masters impairment and looked ahead to a new chapter in the company’s 92-year history.
