Woolworths And Big W boss Brad Banducci who threw in the towel, when the going got rough at the big supermarket chain after they were accused of price gouging, and allowing the development of a woke culture among management that saw the business snub Australia Day, has been accused of trying to “bullshit the committee” after he was forced to front the Federal Government Senate inquiry into price gouging.

Not mincing his words Greens Senator Nick McKim took a major swipe at the South African boss who business decisions have been seriously questioned along with the Companies communication strategy.

Woolworths and Coles are being questioned over price hikes and record profits during the cost-of-living crisis with Banducci who is known for “wanting his own way” at the big supermarket now being questioned with the public looking on.

Picture Shows: Woolworths CEO Brad Banducci appearing before the Senate Select Committee on Supermarket Prices

McKim told Banducci, “I’m not interested in your spin here today,” accusing the beleaguered supermarket boss of “cherry picking” information regarding Woolworths’ $1.7 billion profit during the last financial year.

Banducci claims the supermarket makes a 10% profit on funds employed, which he insisted was the average of a listed ASX company. “In the face of all of those facts, it is very hard to say that we are price gouging,” he claimed.

What Banducci did not raise until prompted was the return on equity.

McKim who pressed Banducci for the return on equity, rather than on “funds employed” claims the returns were more like 26%.

Sticking with his 10% claims Banducci was accused of not being able to answer, “a simple question.”

“We will come to those points later, but I’m not interested in those figures right now,” Mc Kim said, accusing him of attempting to “bullshit the committee” by not confirming this figure, as he “didn’t like the story it tells.”

McKim threatened Banducci with prison time over the issue of return on equity.

McKim says the Senate can hold a witness in contempt for not answering questions.

He insists Banducci tell the committee what Woolies’ return on equity in the past financial year was.

Banducci says he doesn’t know the number and takes the question on notice.

McKim is furious.

“There’s no context to this question, apart from the context where you are giving evidence to a Senate committee and it is open to the Senate to hold you in contempt and imprison you for up to six months if you do not comply with an order of this committee.

“That is the context of this question.”

Banducci has taken the question on notice and confirms he does not know the return on equity number.

 

Banducci shot down claims that he was part of a duopoly by saying Australians shop at different supermarkets for different needs, and when The Reject Shop, Amazon, Chemist Warehouse, and similar stores are included in the figures, Woolworths holds only a 20% market share.

Coming back to his 10% argument he said, “We focus on return on investment,”,
“That is the key number that we should focus on and that is the number that is in our long-term incentives.

“It is a common corporate finance measure. It is the right measure: what return did we get on a dollar put into our business?”

“We are part of a highly competitive, efficient, and innovative grocery sector. With the arrival and growth of three of the world’s biggest and most competitive retailers – Aldi, Costco, and Amazon – in Australia, consumers have never had more choice. And this is a good thing.

“In this context, it has never been more important to be price competitive. It is critical in trying to win our customers’ shopping basket, which we need to do on a daily and weekly basis.”

Accused of dodging questions about the supermarket’s mammoth profit Banducci appeared to become rattled by the fiery back-and-forth with senators.

Later Senator McKim erupted, telling the chief executive that Australians were “dumpster diving” and going for days without meals due to soaring grocery prices.

It was also pointed out that Banducci earnt $8.4m in total remuneration last year.

Banducci also denied allegations of land banking which is the warehousing of undeveloped sites around Australia.

He refused to confirm if he would provide a list of undeveloped sites owned by the company.

Past hearings have heard evidence of both Coles and Woolworths buying up pockets of land at “significantly inflated prices” to halt competition – otherwise known as land banking.

“We do not do that (land banking) – we do buy land in growth corridors,” Mr Banducci told senators.