Woolworths boss Brad Banducci tells Senate prices inquiry competition in Australia is strong and vibrant

Adrian Lowe
The Nightly
3 Min Read
Woolworths boss Brad Banducci facing the Senate inquiry into supermarket prices.
Woolworths boss Brad Banducci facing the Senate inquiry into supermarket prices. Credit: supplied/supplied

Woolworths boss Brad Banducci has been threatened with jail time and fines amid hostile and ugly questioning at the Senate inquiry into supermarket prices.

Mr Banducci’s appearance was stuck for more than 30 minutes in an intense disagreement with Greens Senator and committee chair Nick McKim about “return on equity”.

Senator McKim said he felt “compelled to advise it is open to the Senate to hold a witness in contempt”, penalties for which included six months’ jail time.

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Senator McKim accused Mr Banducci of “kind of bulls..ting your way through” and asked if he was “struggling with the ordinary English language”.

“I’m not interested in your spin or your bulls..., this is a Senate inquiry. Just answer the question,” Senator McKim demanded in a second round of questions on return on equity.

Mr Banducci said he did not know what Woolworths’ return on equity was in the 2023 financial year and would take the question on notice.

He said Woolworths did not accept accusations of price-gouging customers and said its goal was to help them.

Mr Banducci also pushed back on suggestions — made particularly by the independent supermarkets and IGA distributor Metcash — Woolworths buys up independent supermarkets to reduce competition. He said there was only one incidence of that in the past five years, in the ACT.

“The amount of square metreage which we’ve put on the ground is lower than the population growth of Australia over the last 10 years,” he said.

Mr Banducci earlier acknowledged Australians were experiencing tough demands on their wallet during periods of high inflation, but said grocery prices were beginning to taper lower.

“In Australia consumers have never had more choice, and this is a good thing,” Mr Banducci said.

“Australian consumers are savvy and have high expectations. The vast majority of consumers shop across multiple retailers.

“The growth of online shopping and new digital tools are making it ever easier for consumers to compare prices and cross shop.”

Mr Banducci pointed to Aldi, Costco and Amazon as large multi-nationals helping to make Australia more competitive.

He pushed back on suggestions Australia’s supermarket sector was among the world’s most concentrated, saying comparisons with individual States and regions were more relevant. By that measure, Australia was particularly competitive, he argued.

“Australians have, in general, the right range of options available to them in most of the communities. Not in every one of course,” Mr Banducci said.

He said 60 per cent of overall grocery inflation had been driven by Woolworths’ top 100 suppliers.

“In general, our shelf price goes up by the price increase (requested),” Mr Banducci said.

“There would be very few instances where we went above an RRP. We need to be competitive.”

Mr Banducci pushed back on questioning about Woolworths’ return on equity, saying a better, more accurate measure was return on funds employed. At that measure, it was 10 per cent for Woolworths.

Senator McKim suggested Woolworths’ return on equity was 26 per cent, which Mr Banducci did not entertain.

The chief executive said it was “hard to say we are price-gouging” with a 10 per cent return on capital and returned 10 per cent to shareholders over the past five years — the average for the Australian sharemarket.

The hearings continue, with Coles boss Leah Weckert to appear following Mr Banducci’s evidence.

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