Woolworths’ CEO, Amanda Bardwell, is set to cut $400 million in back-office costs to reinvest in lower prices and regain customer trust after disappointing financial results. Acknowledging the company’s underperformance, both Bardwell and chairman Scott Perkins stressed the need for improvement.
Bardwell’s strategy focuses on streamlining operations in Woolworths’ Australian supermarkets, which generate 95% of earnings. She is also reviewing the company’s broader portfolio, potentially selling off underperforming divisions like Big W and its New Zealand supermarkets.
Woolworths reported a net profit of $741 million for the December half, recovering from a $781 million loss the previous year. However, Australian supermarket earnings fell 12.8% to $1.39 billion, and overall earnings dropped 14.2% to $1.45 billion, prompting a 17% dividend cut.
A $95 million cost from industrial action before Christmas disrupted operations and affected sales, particularly in Victoria. Perkins stated that the company is addressing these challenges with a clear plan for 2025.
The $400 million savings initiative, primarily targeting head office restructuring, aims to counter rising business costs. Bardwell noted that customers are increasingly price-conscious, shopping across multiple retailers, seeking discounts, and opting for own-brand products. Woolworths has already increased promotions to meet demand.
While Bardwell did not specify whether all savings would be directed toward price reductions or shareholder returns, she emphasised that delivering value to customers remains a priority. Analyst David Errington questioned whether cost-cutting alone could restore profitability and maintain investor confidence.
Supermarket sales rose 3.3% in early 2025 due to stabilised trading, a collectibles promotion, and e-commerce growth. However, Woolworths’ share price fell 96 cents to $30.60, highlighting investor concerns about its turnaround strategy.
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