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Shareholders on Wednesday did take some comfort from Woolworths (somewhat unusually) providing the market a window into how things have started in the second quarter. Food retail sales are growing at 3.2 per cent and customer satisfaction metrics are inching up, so there is some good news and whether these green shoots bloom over Christmas will be key to whether Bardwell can deliver on her promise of turning things around.
The next big question for investors is whether Woolworths’ discounting strategy further eats into its margins and profitability.
The math says discounting products will hurt profit – all other things being equal. And Woolworths appears to have taken the view that it is prepared to sacrifice some profit to boost sales. To improve its margins, Woolworths needs to take out costs, but with a high fixed cost base there are limits as to how much can be shaved.
Then there is the elephant in Woolworths’ stable – Big W. The discount department store is Woolworths’ problem child that the group has been attempting to rehabilitate for a couple of years. In fiscal 2025, Big W delivered a $35 million loss.
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Bardwell has said Big W is expected to be cash flow positive in 2026 and is showing some improvement in momentum but whether there is a move to dispose of it remains a secret.
The discount department store’s performance is all the more horrendous when compared with its competitor KMart whose profit came in at more than $1 billion in 2025.
The final and most difficult question for shareholders is whether Bardwell has fumbled the ball or whether she was handed a hospital pass by her predecessor Brad Banducci.
Former Woolworths boss Brad Banducci and the retailer’s current chief executive Amanda Bardwell.
To be fair, Bardwell has endured a number of challenges since taking the role less than two years ago – not the least of which was a sustained attack from the government accusing the supermarket group of price gouging.
But shareholders will be justified in placing pressure on Bardwell and the board if the supermarkets continue to lose more market share from here.
Investors have watched the share price fall by more than 9 per cent this year compared with the ASX 200, which has risen by almost 8.8 per cent and Coles whose share price has wildly outperformed – up more than 21 per cent.
The numbers over the last couple of months deliver a pretty clear verdict on who’s winning the supermarket wars. It’s now up to Bardwell to prove to the investors that she has the right answers to a growing list of questions.
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