Woolies returns to top after 2015 woe
WOOLWORTHS chairman Gordon Cairns has admitted that in 2015 the supermarket giant was led by an “emasculated” chief executive and a fractured board.
He said its stores were in disrepair, suppliers mistreated, staff unmotivated and grocery prices too high.
Addressing the Australian Institute of Company Directors’ Australian Governance Summit on Monday, he said Woolworths was plagued by a series of operational and managerial problems in 2015,
when he became chairman. At the time it was led by CEO Grant O’brien, whom Woolworths had asked to leave but then asked to stay on.
“I mean, the poor guy, he was totally emasculated and he behaved with an enormous amount of dignity,” Mr Cairns said.
At the time, Woolworths directors were split and the retailer had wasted billions of dollars on its ill-fated hardware chain Masters.
“We had made a number of serious and costly missteps with investing in Masters,” Mr Cairns said.
He said in 2015 Big W was also losing a lot of money and Woolworths had not properly invested in its supermarkets.
The appointment of CEO Brad Banducci in 2015 helped to change the culture as the retailer worked on improving service, shutting down the failed Masters experiment, and bringing diversity into the boardroom, he said.
Mr Banducci was a retailer “for the 21st century” who recognised the huge changes happening in the sector including technology and the shift online, he said.
“What did we go about
doing? The first thing is, and I think this is one of the most important tasks that a board actually has, you have to find and appoint the right chief executive.
“And we were very fortunate that we had someone in the organisation who had all the hallmarks of being a great chief executive and I have to say that my intuition and sound judgment has been proved in spades, he has been and continues to be an outstanding CEO.
“An important criteria we were looking for was a chief executive who was a 21st cen
tury retailer, who understood that the future is actually in ecommerce and understood that not only was the future in e-commerce but the future was stores, supermarkets, not about selling product at a reasonable price. It was actually about giving people a great experience.”
Last year, Mr Cairns said Woolworths was able to push through changes in six months that normally would have taken two to three years. These included pop-up distribution centres that were completed in a week rather than years.