Rahat Kapur
Feb 22, 2024

Woes for Woolies: Woolworths CEO Brad Banducci announces retirement following disastrous media appearance

Australian supermarket Woolworths found itself in the midst of a reputational blitz this week, as CEO Brad Banducci walked out of a major Australian interview when pressed on unfair pricing tactics, then announced his retirement days after.

Woes for Woolies: Woolworths CEO Brad Banducci announces retirement following disastrous media appearance

Australian supermarket giant Woolworths and its CEO, Brad Banducci, found themselves in the midst of an unfolding PR crisis this week—sparking widespread debate over corporate conduct and market dynamics in Australia's retail sector.

Australia's two largest supermarket chains, Woolworths and Coles, are facing scrutiny over allegations of price gouging amid an environment of rising inflation and escalating costs throughout the supply chain. The situation affects various sectors of the Australian economy, including farmers and retailers, and has led to increased prices for consumers. In response to the challenges of inflation and alleviate the financial strain on consumers, Banducci announced Woolworths' decision to freeze prices on a wide array of essential goods in July 2022. The initiative aimed to address the growing concerns over affordability and access to basic necessities for Australian families, encompassing products across pantry, meal, baby, and household categories.

However, this has been to no real avail, as the Australian Competition and Consumer Commission (ACCC) announced on January 25 this year that it has launched a formal inquiry into the supermarket sector, including "pricing practices of the supermarkets and the relationship between wholesale, including farmgate and retail prices." The year-long inquiry will also examine competition in the sector and how it's evolved since the ACCC’s last inquiry in 2008.

The most recent controversy for Woolworths erupted during an episode of Australian channel ABC's programme Four Corners that aired earlier this week, scrutinising Woolworths' pricing practices. In a now-viral moment, CEO Banducci exited the interview following pointed questions by reporter Angus Grigg regarding the concentration of Australia's supermarket industry and Woolworths' role within it. The conversation grew increasingly tense when Grigg cited comments by Rod Sims, former head of the ACCC, contradicting Banducci's position on market concentration. Initially dismissing Sims' credibility on the matter due his retirement, Banducci then backtracked and asked for the remarks to be removed after Grigg pressed further on the matter, rebutting that Sims had only reitred approximately 18 months ago. At this time, Banducci became visibly frustrated, initially the leaving the interview and walking out, before his media team cajoled him into returning. 

The entire incident has sparked a furious dialogue on corporate accountability and transparency in the Australian media, as well as a rather dire reputational crisis for the brand. Woolworths announced yesterday that Banducci will step down from his role as CEO in September this year, after nearly nine years at the helm, to begin his long-planned retirement. The news was broken in tandem with the release of Woolworths' half-yearly results, which indicated a loss of AUD$781 million (primarily due to exceptional accounting adjustments). However, when these one-time items are excluded, the company saw a 2.5% increase in its core profits.

Banducci will be replaced by Amanda Bardwell—current head of WooliesX (the brand's eCommerce division). When questioned on the coincidental timing of the announcement following Banducci's disastrous interview at an investor briefing yesterday morning, Woolworths chair Scott Perkins stated the company always intended to announce Banducci's retirement yesterday, and had long-been in the process of seeking a successor for him since mid-2023. 

Naturally, Australian media commentators remain skeptical on the above, with many calling the situation a "trainwreck" and accusing Barducci of trying to put a "good spin" on his exit in the face of escalating public and market scrutiny.

As the story continues to unfold, Campaign reached out to industry experts to provide their commentary and insights on the PR debacle:

Benjamin Haslem
Director of media and public affairs
Icon Reputation

What tactics can Woolworths employ to navigate the narrative away from the notion that Banducci's retirement is a direct response to public pressure or controversy?

The appointment of new CEO, Amanda Bardwell, is a great opportunity for Woolworths to start rebuilding trust in the brand and reset the narrative. People have short memories, so shifting their attention away from the Brad Banducci crisis shouldn't be difficult. The far greater challenge is rebuilding trust in the Woolworths brand. Banducci wasn’t well known to Woolies customers until his spectacular Four Corners meltdown.

Bardwell now has the opportunity to play a greater public-facing role. She has a good backstory— a local with 23 years at the supermarket giant, and 30 years in retail—albeit not on the shop floor. Compare that with South African Banducci who spent 14 years at global management consultancy behemoth Boston Consulting Group in Sydney, Auckland and Chicago. Customers should find her more relatable.

In the aftermath of the Four Corners interview, what specific communication strategies would you suggest Woolworths implement to minimise damage to its brand reputation?

Qantas has started rebuilding customer support through generous frequent flyer perks and reduced ticket prices; and its new CEO, Vanessa Hudson, came from within the airline. Woolworths should do the same—slash prices, boost reward points, and just as importantly, demonstrate that its committed to building bridges with suppliers—particularly in the fresh produce space.

Bardwell should develop a strong profile through digital and traditional advertising—including in-store—talking about how proud she is to have worked her way up at Woolies and how she is focused on putting customers and suppliers first. Her image should be seen in supermarkets display ads with breakout quotes about her fresh focus on customers. A core message should be that her professional life is rooted deeply in retail and she understands the space intimately.

How can Woolworths effectively manage the balance between Banducci’s public image and the overarching reputation of the company out of this incident?

That’s a tough one, because they are intrinsically connected.The difficulty for Woolworths is that Banducci will shortly front a Greens-chaired Senate inquiry that is investigating whether the major supermarkets are price gouging.

This is an opportunity for Banducci to start repairing his own image and through that, Woolworths’. He has already phoned former ACCC Chair Rod Sims to apologise. He now needs to do so publicly at the Senate inquiry. Banducci must remain calm. He should acknowledge the senator’s concerns, emphasising that he appreciates Woolworths needs to do better at explaining how it sets prices and deals with suppliers. While the outgoing CEO has a responsibility to shareholders, he must emphasise that it's in the company’s interests to put customers and suppliers first. When rebutting senators’ statements or answering their questions he must present as empathetic, while calmly outlining that retail competition is rapidly increasing. But most importantly, play the ball, not the senator.

If he had done that in his Four Corners appearance, Woolworths wouldn’t find itself today competing with Taylor Swift for newspaper column centimetres.

Marina Mathews
Founder and managing director
Marina Mathews Communications

In the aftermath of the Four Corners interview and Bancuddi's retirement announcement, what specific communication strategies would you suggest Woolworths implement to minimise damage to its brand reputation?

In the aftermath of the Four Corners imbroglio, Woolworths stands at the crossroads of perception management. In my view, a strategic recalibration is in order, beginning with an unambiguous and comprehensive internal review of pricing practices. Transparently communicating the results, along with a robust action plan for rectification, will be a linchpin in restoring brand equity.

Engaging stakeholders, particularly the customer base, is an imperative exercise in restoring faith. The strategic narrative must articulate a commitment to not only addressing identified issues but also elevating the brand’s integrity and corporate responsibility.

Simultaneously, the company should emphasise its commitment to a smooth transition under the leadership of Amanda Bardwell and the continuation of Woolworths’ values and commitment to its customers. They need to seize this opportunity for a fresh start, allowing her to build trust with consumers, stakeholders, and the media.

Strategic alignment between individual narratives and the overarching corporate saga will be necessary to ensure the harmonious transition of leadership while projecting stability and resilience amid the ebb and flow of external scrutiny.

Luke Holland 
Head of Strategic Communications
Think HQ

What tactics can Woolworths employ to navigate the narrative away from the notion that retirement is a direct response to public pressure or controversy?

Managing the departure of a CEO is never easy, and any retirement announced two days after a car crash interview is doomed to be seen for what it is: A response to a car crash interview!

But Woolworths would do well to remember just how many battles they are fighting right now, and think hard about whether to effectively sit this one out. Industry insiders (and those with an interest) heard the talk of Banducci moving on months ago, and will see recent events as a hastening of the inevitable rather than a catalyst. As for the wider population, most of them had never heard of Brad Banducci before this week. Three days and millions of TikTok views later, pretty much everyone knows him, and knows him for one reason only. Even the might of Woolies’ PR team can’t stop the inevitable avalanche of memes that will follow, and the smart thing would be to not even try.

In the aftermath of the Four Corners interview, what specific communication strategies would you suggest Woolworths implement to minimise damage to its brand reputation?

As a starting point, they should watch their outgoing CEO’s interview, then do the exact opposite. And this means taking an honest look at the strategy and messaging that led to the interview, which was clearly lacking in every way.

Whether or not Woolworths and Coles are price gouging, and doing so in a market bereft of meaningful competition, is not relevant. The court of public opinion has decided that they are, and experts and politicians seem to agree. Woolworths need a strategy that is rooted in the situation as it is, not as they wish it was. A good start would be for the PR leadership to take a look outside the boardroom, take some air and also some external counsel. It’s tough to manage a situation like this, but inward looking strategies rarely work.

For consumers across the country, this means acknowledging that lots of Aussies are doing it tough, and commit to meaningfully doing more to make life a bit easier for them. This needs to be more than a few bucks off Strawberries or half price tuna; they need action to show that they actually get it. 

And this approach will help them with the whirlwind coming their way from Canberra. There is a Government in tune with public opinion on monopolies and consumer fairness, and it seems that the two big supermarkets are in their sights. Getting ahead of the game won’t fix the issue, but it would go some way to indicating an ability to get their own house in order—before someone does it for them. 

With inputs from Nikita Mishra.

Campaign Asia

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