The Australian Competition and Consumer Commission (ACCC) which is conducting a public hearing as part of its Supermarkets Inquiry has called on executives of Woolworths to explain allegations of ‘land banking’ raised against it.
During the hearing on Monday attended by Woolworths chief executive Amanda Bardwell and former CEO Brad Banducci, among others, an internal Woolworths document was shown which appears to be the chain’s strategy around buying up land and sites to develop for new stores, with the document showing Woolworths sat on land for “strategic reasons” other than developing it.
Woolworths executives strongly denied these “strategic reasons” was land banking, reported The Australian.
Some retailers have accused Woolworths, as well as Coles, of buying up land and sites and then sitting on them, instead of developing them into new stores, to block rivals from buying that site to build a competing store.
Counsel assisting the ACCC inquiry, Naomi Sharp, asked Bardwell and Woolworths property boss Ralph Kemmler if Woolworths had ever engaged in land banking.
Bardwell, and the Woolworths property boss both denied the retailer had engaged in ‘land banking’.
Sharp then produced the redacted internal Woolworths document which showed Woolworths had purchased land or sites “held for strategic reasons” or properties held “on balance sheet not planned for a future development”.
Sharp asked if this was an example of land banking. Kemmler told the hearing there could be a number of strategic reasons for which these properties were held but not developed. He denied this was an example of land banking but the land was not held for “competitive reasons”.
Sharp said she found the explanation “strange”. She said the ACCC interim report into the supermarket sector found that Woolworths had around 110 sites it was sitting on. Kemmler said of those 110 sites only around 65 were owned by Woolworths.
While Woolies executives are being grilled by the ACCC on Monday and Tuesday, they will be followed by executives from Coles. On Monday, Bardwell also insisted that the Australian supermarket industry is “fiercely competitive”.
Sharp asked Bardwell if she agreed with the statement the Australian supermarket sector was “fiercely competitive”, despite it being “dominated” by Woolworths and Coles, which according to the ACCC together account for 67 per cent of sales nationally.
“It is fiercely competitive,” said Bardwell. “We are a substantial part of the market overall, which is dramatically changing and we compete every single day for customers to choose to shop with us.”
