Opinion: Brad Banducci transformed Woolies as CEO and deserves to be recognised

It is a shame that Brad Banducci’s retirement announcement as Woolworths CEO has been clouded by some poor media interviews.The first, a Melbourne radio interview defending Woolworths’ decision not to promote Australia Day merchandise, and the second, an ABC Four Corners exchange on competition in the grocery market.A testy Banducci temporarily abandoned the interview having rejected former Australian Competition and Consumer Commission chair Rod Sims’ assertion that Australia had one of the most concentrated grocery markets in the world.Sims is arguably right on the market share dominance of Woolworths and Coles but Banducci can point to a more competitive grocery market in Australia today with Aldi, Costco and a viable independent sector underpinned by Metcash.Both interviews and the subsequent efforts to limit the fallout laid bare Banducci’s frustration and, whilst he dismisses the proposition, no doubt his exhaustion after a tough few years at the helm of Australia’s largest retailer.In part, that frustration may reflect the seemingly harsher spotlight on Woolworths and Banducci in the political and media commentary around supermarket pricing and competitive behaviour than on Coles and its CEO and managing director, Leah Weckert.It would also reflect a deeper frustration with the political criticism and scrutiny of the two major supermarket chains that would appear to have much to do with deflecting the blame for the cost-of-living crisis from governments and their policies.Grocery prices have certainly been part of the inflation equation but interest rates, taxes and levies, utility bills and health costs, none of which are being tempered, are also creating cost-of-living pressures for Australian households.Banducci has expressed regrets about the interviews but is adamant that the retirement announcement was not prompted by them.In fact, Woolworths apparently started planning for Banducci’s exit in May last year and conducted an extensive executive search before deciding on an internal appointment.While he doesn’t concede the exhaustion factor, there is little doubt that his tenure as CEO was extraordinarily demanding and would have taken a toll.Banducci deserves to leave the helm of Australia’s largest retail company with more kudos than brickbats.Woolworths is facing some challenges in the months ahead, including intense scrutiny of its pricing just as it encounters the prospect of slower sales growth and, in all likelihood, lower profitability, but it is in better shape than when Banducci was appointed CEO in 2015.His successor, Amanda Bardwell, will have to deal with the underperforming Big W business and New Zealand supermarket division, as well as the competition inquiries, but she should have more clear air than Banducci did eight years ago.Getting Woolies back on trackSouth African-born Banducci was the director of Woolworths drinks business between 2012 and March 2012 after joining the company with the acquisition of the Cellarmasters Group, where he was CEO for four years.He landed the top job following the retirement of Grant O’Brien after a disastrous four-year tenure that led to staff redundancies, heavy writedowns and Woolworths’ first loss in 20 years.O’Brien’s biggest mistake was to try to take on Wesfarmers’ Bunnings chain with the Masters Home Improvement chain that bled more than $700 million in its first year of trading.The divestment of the 325-store Dick Smith chain to private equity firm, Anchorage Capital, for just $20 million was not one of O’Brien’s better achievements either.Within months of becoming CEO, Banducci extricated Woolworths from the Masters Home Improvement debacle and sold off the independent wholesale business and brands for Home Timber and Hardware to Metcash.He also sold the Ezibuy clothing and homewares chain to Alceon Group and divested Woolworths liquor, gaming and hotels business in a successful public float of the Endeavour Group.Banducci rebuilt investor confidence, sales and profit momentum despite fierce competition from Aldi, Costco, independent supermarket chains and a re-invigorated Coles Group, which was divested in public float by Wesfarmers in 2018.In terms of retail operations, the most curious decision was to persevere with the underperforming Big W chain.However, as acknowledged by Woolworths’ board when his retirement announcement was made, Banducci led a remarkable turnaround and transformation of the company.He built world-class digital, e-commerce and analytics capabilities and led the retailer through the challenges of the Covid pandemic and the aftermath of an inflationary recovery.After paring back the Woolworths business portfolio, Banducci has accomplished two significant acquisitions in the past two years, the $552 million 65 per cent stake in PFD Food Services and the $586 million 55 per cent shareholding in Petstock.Bardwell has two potential growth engines to offset any slowdown in supermarket sales and profit growth and will also benefit from Banducci’s continuation in the CEO role up to September.That means he will be at the forefront in defending Woolworths in the Senate and Australian Competition and Consumer Commission inquiries which follow a negative report card from former ACCC chair, Prof Alan Fels, commissioned by the Australian Council of Trade Unions.Banducci will also no doubt be mulling over the future of Big W yet again and taking a long hard look at the New Zealand supermarkets.He has already started cleaning house with writedowns on the New Zealand supermarkets and Woolworths’ shareholding in Endeavour Group in financial results reported this month.In the inquiries in the grocery industry, Banducci and Weckert at Coles have a defence based on supplier cost increases and extreme weather impacts but the niggle for Woolworths is a surging margin increase in recent financial results.Historic moment for Australian retailThe retirement of Banducci creates a significant milestone in Australia’s retail history with the two largest retail companies to be led by women.Weckert became Coles CEO in May 2022 on the retirement of Steven Cain and after four years in key executive roles with the company.Bardwell will officially take over as CEO at Woolworths in September following a 23-year career in the company.Banducci might well have preferred to go out without the loss of a little skin in recent weeks, however, Woolworths is quite entitled to describe him as one of its finest leaders.