Woolworths CEO Banducci quits as supermarket giants under the microscope

Woolworths Group (ASX: WOW) CEO Brad Banducci has stunned the market with the announcement that he will retire as CEO at the end of this year, ending his more than eight years leading the retail group.

The news came in tandem with Woolworths reporting a mixed half-year earnings result with a 2.5 per cent increase in net profit after tax to $929 million – although the bottom line slumped to a $781 million loss largely due to writedowns in its troubled New Zealand operations.

Banducci, who will mark 13 years with Woolworths in the company’s centennial year when he retires in August this year, will be replaced as CEO by Amanda Bardwell, who is currently managing director of WooliesX overseeing the company’s loyalty program and its e-commerce division.

Banducci has not offered a reason for his sudden departure although some observers have tied the announcement to a recent interview with Four Corners where the CEO walked out following a heated exchange in which he had urged the interviewer to edit out a dismissive comment made about the views of former ACCC chairman Rod Sims. 

Either way, the news sent Woolworths shares almost 7 per cent lower at one stage in early trading on the ASX. The shares were trading at $33.50 at 10.51am (AEDT), down $2.32.

The share price also would have been swayed by Banducci revealing that trading conditions impacting the first half have continued into the current half year, implying a 'relatively challenging' period ahead for the company. 

Woolworths chairman Scott Perkins paid tribute to Banducci’s ‘outstanding leadership and contribution’ to the company.

“Brad has led a remarkable turnaround and transformation of the group,” says Perkins.

“He has engendered a customer first team culture, worked to strengthen existing businesses and build digital, e-commerce and analytics capabilities that are seen by our peers as world leading.

“The test of any CEO is to leave the business in much better shape than when they started. On that simple metric, history will judge Brad to have been one of Woolworths Group’s finest leaders.”

Banducci took a back seat in today’s leadership-transition announcement, with a brief statement saying that it has been ‘a privilege to be a member of the Woolies team and one I have never taken for granted’.

“We have a wonderfully talented and passionate team at Woolworths Group, as personified in Amanda Bardwell, and I look forward to working with Amanda and our team over the next few months as we set ourselves up for the next chapter,” he says.

"I felt that the time was right to pass the baton to the next generation of Woolworths."

Banducci’s departure comes at a time when cost-of-living pressures have placed the market power of major supermarkets Woolworths and Coles Group (ASX: COL) under the spotlight.

It also follows an Australian Competition and Consumer Commission investigation into supermarket pricing and competition announced earlier this month. A separate Senate inquiry is also under way into supermarket pricing, at which Banducci says he looks forward to 'very effectively' representing Woolworths. 

The Four Corners interview was testament to the pressures faced by the major supermarkets when Banducci mistakenly insinuated that former ACCC chairman Rod Sims had retired more than a decade ago and was out of touch with the current issues facing the industry. However, it was pointed out that Sims retired from the role in 2022.

Banducci created the controversy when he walked out on the interview after he was not given an assurance that this portion of his interview would not be aired. However, he resumed the interview on further advice.

The latest half-year profit result by Woolworths was delivered on a 4.4 per cent increase in sales to $34.63 billion.

Commenting on the company’s mixed result, Banducci says the profit reflects ‘solid results from Australian Food and Australian B2B’ which was ‘somewhat offset by the impacts of a very challenging trading environment on New Zealand and BIG W’.

While he was encouraged by the company’s customer score being down one point over the year, cost-of-living concerns ‘continue to impact our value for money scores which remains our key focus for H2’.

“Managing cost-of-living pressures remains the key issue for our customers and we are focused on helping our customers to spend less every time they shop with us,” he says.

Banducci has announced he will leave Woolworths in August after announcing the company’s full-year profit results.

Perkins says Bardwell was chosen to replace Banducci after an ‘extensive international search process.

“Amanda is a proven leader, business builder and modern retailer,” says the Woolworths chairman.

“Most recently, under her leadership, WooliesX has gone from infancy in 2015 to a $7 billion market-leading business.

“Amanda is highly respected throughout the organisation, and I know, like Brad, will live our purpose and work hard to achieve Woolworths group’s full potential.”

Bardwell has been offered a salary package comprising $2.15 million in fixed remuneration, including superannuation, plus performance incentives.