Victorians barely handling bag ban

WOOLWORTHS has rejected suggestions the move to charge customers for thicker bags made from recycled plastic is a naked profit grab.

“It is not a profitable thing to do, trust me,” said chief executive Brad Banducci.

The retailer, which also owns Dan Murphy’s and Big W, yesterday posted a 12.5 per cent rise in net profit to $1.72 billion for the year to June 24.

It declared a 10c special dividend to be paid in addition to its final dividend of 50c.

But Mr Banducci revealed that the move to ban singleuse plastic bags in Victoria had prompted a dramatic slump in sales growth.

He said the shift to begin charging shoppers for thicker, reusable bags has been “a lot harder” than anyone at Australia’s biggest supermarket chain originally thought.

The admission came as sales growth at Woolworths slumped to 1.3 per cent in the seven weeks from June 25 as shoppers rebelled against having to bring or buy their own bags and Coles launched its popular Little Shop promotion.

“It was a lot harder than we thought, and we were surprised,” Mr Banducci said of the bag ban. “It was and has been a more painful adjustment than we thought and out of line with what we have seen in South Australia, Tasmania, the UK, France, South Africa, so it has been quite painful.”

Single-use plastic bags were outlawed in South Australia in 2009 and Tasmania in 2013.

Woolworths introduced the ban in Victoria on June 20.

Mr Banducci said shoppers had cut down on purchases if they were short of a bag. Shoppers carrying out big shops had adjusted better to the new pol- icy than those grabbing a few items, he said.

Sales growth averaged 4.3 per cent for the year to ending June 24, Woolworth’s full-year results released yesterday showed.

Big W posted a loss of $110 million, less than the $151 million it lost the previous year.

Shares in Woolworths fell 0.7 per cent yesterday to $29.41.