Woolworths in leadership limbo

Woolworthssign_2Is there something seriously wrong at Woolworths?

Let’s have a look at recent times: Ralph Waters resigns as chairman after the announcement of shocking results and he is replaced by Gordon Cairns.

At about the same time Grant O’Brien, MD and CEO, announces his resignation. But he doesn’t leave. He stays on while a replacement is found. And he takes a pay cut of $1.5 million – hardly motivating.

Meanwhile Alistair McGeorge, CEO of Big W, resigns amid some controversy. Penny Winn is appointed caretaker while a replacement is being found.

How has this state of affairs been allowed to continue?

Let’s look at Woolworths first: a new chairman, a former MD/CEO still in the job after resigning in mid-June and having taken a pay cut.

What can this be doing to morale at Woolworths, especially among the senior executives? How long does it take to find a replacement for O’Brien?

Now Big W: McGeorge resigns more than a month ago and Penny Winn is minding the shop.

Where is David Guise, director of human resources for Woolworths? Where is his succession plan? How long are he and Gordon Cairns going to allow two of the biggest brands to limp along in leadership limbo?

This is not the stuff of multi-million dollar public companies!

The shareholders have every right to be ropeable.

I was slammed a month or two ago when I suggested that Wesfarmers may be eyeing Woolworths. ASIC would never allow it and this is probably true – at the present time anyway. But it is inconceivable that Woolworths is not on the radar for takeover.

To aggravate matters they have abandoned the ‘Cheap Cheap’ advertising campaign. How did Tony Phillips, chief of marketing, ever allow this campaign to see the light of day? One doesn’t need to be an expert in marketing to figure out that Woolworths cannot compete on price with the likes of Aldi. Its USP is value, quality, and service.

Add to this conundrum the imminent arrival of Lidl.

Would you buy WOW now?

Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at stuart@impactretailing.com.au or 0414 631 702.

This article first appeared on Inside Retail

Comments

2 comments

  1. Doug Maxwell posted on September 29, 2015

    Yes, Woolworths seems to be digging itself into a hole. I have been a confirmed shopper at Safeway/Woolworth for about 40 years but am now so dismayed when I go into their local store, I feel that I am going to have change the shopping habits of a lifetime. Is it really that hard? I really don't care if someone acknowledges me, within 10secs of entering the store. They really don't mean it, I am not over concerned if a carton is on floor of an aisle. What I want is product at a fair price, I want continuity of the product, I do think the deli needs addressing. Why 7 types of carrot. Why up to 9 types of tomato. Why do house brands products look identical to national brands. That used to be called passing off. Why an entire side of a gondola with toilet paper. Why have signage that says product is in one place but in another altogether. That is very annoying Use some entrepreneurial skill to move away from Aldi product. They are not that good and cannot fulfil all the needs of a weekly shopper. Stop looking behind and move forward. It cannot be too hard to keep in front of a store that only has the ability to have approx. 1/5th of your range reply

  2. Bleeding obvious posted on September 30, 2015

    This isnt about just really high top level management -esp at Big W! The senior management are possibly THE problem, picked to come here by the bigwigs who are leaving or prior to that in transition periods. Really good people (especially those with different workstyles/apporaches to the red management) are leaving or being treated badly and the whole upper management team are blaming others for their own lack of comptency to be strategic leaders in a positive culture that facilitate discipline and innovation. reply

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