Woolies open to grocery competition review

Stephen Johnson
October 31, 2013
AAP

SUPERMARKET giant Woolworths says it will co-operate with any review into competition law but wants to be given “proper consultation”.
The retailer and its chief rival Coles will be scrutinised by a “root and branch” review into market power laws in the food industry by the federal government.

Woolworths chief executive Grant O’Brien has called on the government to provide “proper consultation” with industry players.

“I imagine that’s the process Mr Billson would have in mind and we’ll be happy to participate,” Mr O’Brien told reporters on Thursday.

Small Business Minister Bruce Billson has suggested the big supermarkets may be undercutting suppliers, even if they are not breaking the law.

Woolworths on Thursday said it sold more than $15.68 billion worth of goods in the three months to October 6, an increase of three per cent from the same period in 2012.

This occurred despite a softening of consumer sentiment in the lead up to the federal election, and price deflation caused by an ongoing discounting war.
But Mr O’Brien was confident consumers had money to spend leading into Christmas.

“There will be no great deal of change in trading but we’re buoyed by the fact that the election’s out of the way,” he said.

“There’s a higher level of certainty in the marketplace and that can only help.”

Sales have also improved in Woolworths’ fledgling home improvement division, but Mr O’Brien expects the group’s Masters and Danks hardware stores to continue posting losses for another three years.

“To be blunt, we expected to lose money right up until 2016 and there’s nothing in the result today where I will make … any departure from our expectation,” he said.

Big W was the company’s only business to suffer a decline, with sales slipping by 3.6 per cent because its annual toy sale began earlier in 2013 than in the previous year.

Given the criticism of the major supermarket chains and their relationship with suppliers, Woolworths highlighted its recently signed deal to source all of its house label canned fruit from Australian growers, via SPC Ardmona, a package fruit group owned by beverages firm Coca-Cola Amatil.

“We’ve really not seen the need previously to talk about what we’re doing to support Australian producers but obviously, customers are very keen on it,” Mr O’Brien said.