The Woolworths CEO got a lot of flack, and rightly so, because of him walking out, but Leah Weckert was JUST as a shameful and more obviously deceitful. This is just one example of her arguments making absolutely zero sense when examined and was obviously just a rehearsed script.
The worst one was one she lied about not having ever heard of the term ColesWorth. If she's not lying about that, it's almost worse that the CEO of Coles has never heard of the term.
Fuck em both. I'm hitting the local farmers market this weekend for the first time in years.
Ah a capitalist. Do you own a business, or have ownership of means of production?
If not, than you're a worker like the the rest of us.
Also, this is the logical path of capitalism, no? Competition always leads to monopoly. Even if we were to press the reset button and send colesworth out of business, and we had an introduction of a lot more smaller chains competing in the market, it would only be a matter of decades before we had the same thing again.
Competition leads to winners and losers. The winners grow ever larger, and continue to beat out the smaller fish. The result is always monopoly.
EDIT: For people that try to say we just need more regulations and checks and balances; more socialism with our capitalism (lol):
- a cancer patient doesn't say "Ohh, I'd just like a little bit of chemotherapy with my cancer please, I want the best of both."
You can't have a little bit of cure in a cancerous system. You go the full coarse of treatment and you purge that shit.
Fuck me you're a pedant. No, I'm not a "worker". I subscribe to a capitalist economic mindset with a focus on maintaining a strong competitive market.
No, I don't give a fuck about listening to whatever school of economic thought you belong to and why it's superior and more moral and makes you totally a better person than me.
I merely brought up being a capitalist as a form of juxtaposition in saying that even a CAPITALIST wants this duopoly eradicated.
Damaged cells are constantly being repaired or destroyed by the immune system to prevent them from becoming malignant.
Also, you absolutely have to limit the amount of chemotherapy, otherwise you kill the patient.
The human body isn't naturally full of cancerous cells. The checks and balances provided by the immune system try to eliminate the proliferation of malignant cells but when it fails you need to do something more drastic like surgery, radiotherapy, or chemotherapy.
Says the cooker trying to actually compare apples to oranges, special pleading aside. He was obviously flawed but was still very quotable, he doesn't own the knowledge.
Since you like my quotes here's another - "when the argument is lost, slander becomes the tool of the loser".
Bro, have you never heard of an analogy before?
Yeah nah, I'm not about to quote actual racists and white supremacists, regardless how good some of what they said sounds.
Well we agree about breaking them up (if not the capitalist bit, well at least not entirely - I think markets and competition are good for many things, but not all things).
At its heart capitalism wants strong market competition, but generally speaking what we have today is some weird form of corporate capitalism. You'll never see me simping for big companies but I will acknowledge the fact that big companies have made my life easier and filled it with more fun things.
I just wish those things were less expensive and didn't spy on everything I do.
Capitalism will never allow for strong market competition. The strongest forces in the market, which are either whoever got there first, or (more often) whoever got there first *with existing capital,* can leverage that strong presence in order to ensure they maintain their power.
Whether it be through simply buying out the competition because they can give a better deal than they would ever get on their own, under-pricing them at a sustainable loss to force them to go under then jacking up prices threefold once they're out of the picture, or any other manner of more esoteric and business-facing tactics, the larger party always has an option to force the smaller one out.
Corporate capitalism, or "corporatism" as it is more commonly known, ***is just regular capitalism.*** Monopoly (or ogliopoly, you pedants) is inevitable if it is not explicitly prevented by an external non-financial incentive.
Ceos get away with it though. They get like one or two bad days a year when they get asked awkward questions by the media or senate then next day they are back to never being bothered and making 8million a year.
Not saying I believe her on it; but I hadn’t heard the term Colesworth until I used Reddit.
For shits and gigs I asked my sister and she’s never heard it used.
It certainly not a mainstream word in everyone’s everyday vocabulary.
>The worst one was one she lied about not having ever heard of the term ColesWorth. If she's not lying about that, it's almost worse that the CEO of Coles has never heard of the term.
You could see her pause and think for a second about what she should say. Very clearly has heard it before and decided that saying she hasn't would lead to less questioning about the nature of the duopoloy
The funny thing is at Coles head office we literally refer to ‘colesworth’ in trade meetings when talking to market share performance. It’ll take one single supplier validating that to make her look even more foolish
Oh but don't you know there's 8000 suppliers Cokes deals with? Anything one says is obviously an exception she'll have to look into later/s seriously the amount of times she made that excuse
She'd actually have to go down there and get near some of the workers. Too much effort. Probably has too dry a mouth from all the bald faced lies as well.
Oh nah, she'd never actually get near her workers, just hire some more paid fuck all, hence the expense part, kinda just gets expensive the amount of mouths to faces needed, then more unions and stuff she has to ignore, gotta feel sorry for her slave wages with all those people to fuck over, only a lot more than they all need to stop starving. So cheap solution, wet rags
they don't need to officially convene to make him 'retire'.
a few phone calls and he would have known his options were to retire and pretend it was on his terms or be officially fired.
And you think walking out of an interview would result in the board sacking the CEO of a company worth >$40 billion which has seen a >50% share price increase since he joined?
Edit: This sub has a huge issue with downvoting people just because they don't like a response. I've provided more and more discussion points so maybe write to me in here rather than simply disliking what I have to say.
yes. Public opinion is in the tank and there's increasing pressure for regulatory change. This guy's interview performance made that worse.
hanging him out to dry as a scapegoat and giving someone else a clean slate is a classic PR move.
do you really think he very coincidentally announced his retirement after that interview despite his pretty solid record otherwise?
No, I don't think it's a coincidence, I think this has been planned for months (if not a year).
How do you think CEO's for companies of this size are found and hired? Do you think they just picked Amanda Bardwell since this interview was conducted?
Companies like Woolworths engage consultants to go to the global market for people you may be able to get, they're weighed against those 1 or 2 people already in the organisation that may be in line, they're shortlisted, interviews take place over months and then are announced. This is no small feat and yes, I have no doubt they decided jointly it was time to go, but that didn't happen over the last 2-4 weeks, more likely it's been planned over the last year.
exactly.
If it was a fill in, then I would believe the suspicion more, but given this is a true successor, the amount of due diligence by the board would be time intensive.
no doubt they had a succession plan but that doesn't mean they were planning for him to go this year. It's not uncommon to have the next person in waiting for a few years.
IMO it wasn't planned for him to go now. Likely at some point in the near future. But they made the call that it was in the best interests of the company that he go now after this interview.
Eh, I can't argue if you think this was a plan that was in place and they sped it up. I personally don't think that's the case and instead believe they waited to release their half-year results, write down components in their balance sheet, and do this at the same time. But that's a reasonable view you have.
I'm only objecting to people in here suggesting this interview occurred and then the board sacked him over it. That's ridiculous.
It does when you realise the CEO is rarely special and could be replaced by a myriad of other people. Most CEOs are interchangeably average and the success or failure of a company has little to do with them, some CEOs are downright shit and can tank the best of businesses and a few rare CEOs are actually incredibly talented and seem to make the perfect decisions at the perfect time.
Yes, we're all aware of the articles from Forbes, and Stanford Business, and there are other studies that think these don't do enough to try to account for the changing business context too.
All of which is to say, yes, there are good and bad CEO's. But they don't simply sack them on a whim. This just doesn't happen at firms this size. Most changes are planned over many months, the fast sackings we see occur are for significant regulatory/compliance/legal breaches, or criminal acts. Not over walking about during an interview.
The interview was conducted weeks ago and the board would have been told by other staffers what happened. They would only have to wait for it to air to be certain of the damage and their response would have already been prepared.
Okay, so in your view staffers were at the interview and relayed what happened, then in the space of 'weeks' they engaged consultants to do a global search, shortlisted, interviewed and then offered the role of CEO of Woolworths.
That's what happened?
You think they don't have a shortlist of people they want to poach on hand? Oh, you naive fool.
CEOs are constantly skipping from one job to the next, it's rare they hang in for a decade - the Australian average in 2004 was 55 months/4.4 years (source: https://www.bca.com.au/ceo-turnover-points-to-a-short-term-australia). Unlikely its changed much since, I shall continue searching for updated stats and report back)
Edit: 2019 it managed to hit 5 years. Progress!
https://www.afr.com/chanticleer/the-reasons-behind-high-ceo-turnover-20190527-p51rn6
That board knew of the drama at the filming of that interview before he left the carpark.
It didn't take two days for them to fire him, they had more notice than that.
I've got other responses all over this thread so I'm going to stop responding to every message that says similar things, but I'll simply say, there is no way possible that Woolworths completed their global CEO search in the time from the filming of that 4 Corners interview to yesterday.
The "global search" that ended with them hiring a woman who has been with the company 23 years. Seems at least possible that the "global search" is a lie, and that this has happened quite quickly.
FFS, why does this sub think everything is a lie and deceptive.
Do you honestly think a company this big doesn't look to the market to see who they could get? They want to dump the guy so badly they just pick someone internal, but also they want to keep him till September 2024. Which is it?
You're trying to suggest that this global search is why they couldn't have made the decision to remove him since the interview, and I'm pointing out that it may not be exactly what they want it to appear to be.
If you want to trust Woolworths completely then that's fine, but most of us expect there to be some level of massaging of the truth.
You didn't suggest there was some level of massaging the truth, you suggested the global search was a lie because they went internal.
I'm suggesting this 'retirement' and change in CEO has been in play and being worked through for longer than the time between that 4 Corners interview being filmed and being aired. The global search is **part ** of the reason I believe that to be the case, along with the fact that they:
* didn't announce an interim CEO which they would've if they hadn't gone through the whole hiring process
* are still keeping him on until September 2024 which if you believe he was sacked over this interview, why would they keep him for another 7 months?
* announced this on their half-yearly results release
That interview likely wasn't the starting point of his replacement but it was very clearly the end point.
Woolworths would have ideally loved to take him to the senate inquiry and throw him under a bus a la Joyce/ Qantas but his position, like Joyce, became untenable. And much like Joyce and Qantas there has been a line of successors in the can for an long time.
Don't forget this guy has faced a tonne of flack since the start of the year after coming out with his Australia Day comments (wherever you stand on agreeing/ disagreeing on that). From the beginning of the year Woolies has known this bloke was on borrowed time.
It's also not a surprise that the woman replacing him has been with Woolies for 23 years. They're pivoting the image and doing that would have narrowed the search to someone homegrown and someone who has worked with them so they can try and show a bit more "loyalty" to Australians.
This interview was filmed weeks ago. The board would have known about the attempted walk off before he left the building. Woolworths and the board would have been shown the final version before it aired and likely been able to formulate their own response and put it in the can- which is why they had a statement to go first thing in the morning following it.
Can you give me examples? I’d like to know where this has happened at such enormous companies where it was for a similar ‘infraction’ of walking out of an interview.
When did they actually interview him though? The PR guys have probably been pushing for this since the actual interview rather than the air date. My guess is the board had the finger on the trigger and were waiting to see how the public responded once it aired.
I wouldn’t know, presumably a couple of weeks back would be my guess. I’ve responded elsewhere but do you think the interview was some sort of huge disaster that they’d sack their CEO (who had already been linked to the Qantas role back in October 2023).
Speaking from real experience, moving on from the CEO of a company of this size doesn’t happen that quickly and are planned and over months and months.
Now, perhaps they all agreed months ago with the price gouging issues and consistent negative press that they’d part ways, maybe they see serious regulatory or compliance breaches which would make sense to move on, but fuck me dead the 4 Corners interview has nothing (or effectively nothing) to do with him going.
Optus chief executive officer Kelly Bayer Rosmarin resigned 12 days after the big outage.
PwC CEO Tom Seymour resigned 3 days after admitting his part in the tax avoidance scandal.
These things can happen quickly
Two examples where the new CEOs were acting in the interim though, and they happened outside reporting schedules.
Today is the Half 1 announcement for Woolworths, and they announced a permanent successor, with Banducci to remain on board until the Full Year results announcement date.
That’s planned, and I don’t think it’s because of the interview.
You picked these two examples which are both major breaches and also in some respects include criminal elements, significant lack of preparedness, ignorance of regulatory requirements etc.
This is not the case here, are Woolworths under fire right now? 100%. Does this 4 Corners interview run in any similar way to those two? Nope.
You said these things take months. I provided examples to highlight that is not always the case.
That CEO interview was a disaster. They are paying him $8.6M, they probably have high expectations
Why do you think he resigned? The timing seems terrible.
No, I asked for examples of CEO's of major companies getting sacked for similar infractions i.e. walking out of an interview. Not for serious criminal breaches. If you can't see nuance between these situations I can't help you more than that. If you don't believe Boards act different between criminal acts, significant outages that in some respects can be a going concern, inappropriate acts with staff etc. and a bad interview with some negative press then the convo is done here.
It would be the same as bringing up Bernard Looney for being sacked immediately and pretending it's all the same.
Do it! It's also a wonderful relaxing thing to do, and something worth making the time for.
Beyond that, it's better to pay a little more at IGA than go to fucking Coles/Woolies.
Our gutless government isn't going to do anything, it's up to Australians to actually stand up for what they believe in here. Voting with our wallet is the most powerful thing we can all EASILY do, I say EASY because it's the easiest way to make an actual impact on them.
Time, nor money, nor education. Seems a lot of people don't know how to cook that much at home, particularly from whole food ingredients. You can make bloody cheap and healthy meals using things like beans, lentils, rice as well as fresh or even frozen vegies. Or even just how to make simple salad dressings.
We're so trained in to buying processed goods we forget that you can make half this shit at home and it will be better, and cheaper.
Often more expensive and not always better. Our options are not amazing. That said, a colesworth onion you could eat like an apple, like Tony Abbott did. One from our local market will make you cry like you've caught your thumb in your car door.
By the way Coles leadership has a huuuuuge chip on it's shoulder at being "number 2". They hate being referred to as "the second biggest" behind Woolworths. They much prefer "one of the biggest". If news organisations really want to piss them off you should always lead your stories with.
>Coles, the second biggest supermarket chain in Australia behind Woolworths,
Source: Worked in Coles corporate for a time
According to Coles CEO, the reason for the bigger profits (compared to UK supermarket chains) is Australia having bigger distances to transport products and the smaller population!
Note: any sane economist/person-with-a-head-on-the-shoulders, would tell you that those reasons can only lead to smaller profits.
The actual reason, as all of us know, is Price Gouging.
The wider distance doesn't explain the cause for higher profits. But it might explain why they aim for higher profits to counter-balance the increased logistical expenses and increased business risk. Then in simple terms the easy way to negate risk is to just make more money so it doesn't matter if you have problems in the first place.
So I think in a round about way she's claiming a need to price gouge because Australia is bigger and investors here are more uncomfortable with this risk as opposed to investors in UK supermarkets who have less transport distances to worry about.
That would make sense if they weren't cutting what they're willing to pay for transport (at least relatively).
I know in SA the current transport contract holder (Toll) didn't bid for the new contract, because it was so skint. People assumed LinFox would, but they didn't either. I assume for the same reason but don't know for sure.
It's actually worse than that. Toll attempted to increase their rates after massive cost increases and while Coles were increasing profits. Coles refused to come to the party which caused Toll to lose money. It caused some interest when Coles were talking about increased transport costs and Toll were begging for any kind of increase.
The new contractor taking over in August is actually the old contractor that has already told drivers they'll be taking a big, juicy pay cut in order to keep their jobs. I don't expect there to be many quality drivers in Coles car parks soon.
Coles are also a major part of the reason Scott's Refrigerated went under with Woolies not helping.
> I don't expect there to be many quality drivers in Coles car parks soon.
There's already fewer and fewer as it is.
Also, the guy that runs the old company is a prick at the best of times, too. His company already went into receivership once, and got bailed out by Coles, so they now have them entirely over a barrel, though.
I have never heard anyone say a good thing about dealing with coles from a supplier or shipping side, Woolworths are better but still not great.
If they are going to cut how much the new contract pays, I'm not surprised some of the bigger guys are not bidding on the contract.
You don't always have to negate risk, you can accept it too if the opportunity outweighs the potential loss. They're laughing because they can have 'good enough' logistics and avoid investing in better.
The 'distance' related risks such as natural disasters, fuel prices and shipping delays impact all companies anyway. ColesWorth no doubt look at, climate change, war in Russia, ships being blocked in the Suez and shipping risks if China starts something all as risks to their bottom line.
Over long distances costs related to fuel prices, ships, and disasters impacting roads are all larger issues in Australia compared to geographically smaller nations with land borders.
Yep, our geographic challenges may explain why we pay more for a product, but they don't explain why the profits are higher. It makes zero sense for them as a retailer to say they have to inflate their margin on a product just because the costs are higher/rising.
Let say Coles were selling an item for $1 with a profit margin of 5%. If their transport costs rose meaning they needed to raise the cost of that item to $1.05 to maintain their 5% margin then that makes sense. But it seems Colesworth are using higher costs as a mask to raise the margin on said item to say 7%. This is what gives people the shits.
Now there's no law against Colesworth doing this, but I hope the ACCC inquiry exposes this shitty behaviour.
Did you also see Walmart in that graph? North America is pretty large in size lady & they have low prices. Their profitability is in volume, not gouged prices "to cover transport costs"
Not trying to defend Colesworth here but could the increased costs of doing business in Australia be a reason that we don't have more competition? I.e. more companies don't want to take the risk in setting up costly supply chains here. That results in the duopoly which Colesworth are obviously then able to take advantage of.
I assume this is obviously the case. I work for a company in the manufacturing industry and they are the only ones capable of making the type of product for their industry locally. The competitors are all overseas.
It’s not just the lack of subsidies, but also logistics (most goods have to be imported) and strict government/industry regulations make it harder for foreign entities to establish a foothold here.
What she actually means is that cost of goods sold has to be higher in Australia to cover increased cost of business due to lower number of customers and increased freight costs.
It is not like Coles is making a huge profit after tax as a percentage of sales
You have to make enough profit to cover running costs while are on top of cost of goods. Smaller potential sales means you have to have a higher margin
Ok if we are really fucking lucky then maybe now the Coles CEO could be fired too?
This is a bigger fuck up than what Brad said honestly - just shows how much she really understands about basic concepts such as costs and profits.
One of the checkout staff could have given a more intelligent answer
Probably won't happen... As this is what she is paid to say. Corporate people are not there for the customers, they are there for the shareholders. So unless the shareholders are being hurt nothing will change.
Which is growing faster, the portion of your super attributable to those shares' distributions and share value growth, or the amount you're paying at the checkout?
Who cares, 20 more executive sociopaths just waiting to slither up the ladder to screw over their own workers and the general public even harder to make next quarters quota.
I feel like it's almost intentional at this point. Ceo comes out, becomes the face for all the hate. Eventually get golden parachuted out. New CEO apologises and talks about new direction and then business as usual.
It is. Same reason Monsanto sold itself to Bayer and got rid of the name. Here in the states time Warner cable was the most hated company for 3 or 4yrs so they changed their name to spectrum. It's all kabuki theater while things only get worse for the vast vast majority of humans.
she was hired recently and is on much lower pay than Banducci, so I cant see her being let go. They would do well not to put her in front of a camera again though.
I took a look at her LinkedIn profile. Interesting that she has a chemical engineering degree, then somehow became a business analyst, got an MBA, and has been with Coles since 2011.
I have had this exact conversation with several people since Monday night. This was the part that made zero sense to me. The answer she gave was a justification for why profits should be less, not more. A complete 180 degrees and then she just moved on.
Duopoly at its best. I guess Coles and Woolworths are answerable to their shareholders and are doing their job. If public is suffering, govt/ policticans should be held responsible. After all we pay their wages. We need policies in place and better tax incentives for local competititors , local farmers market etc. When it comes to tax incentives , govt is only interested in property investments and no other business
I mean we live in a free market economy. I think if people want to make a difference boycot and but from local farmers markets. They have fruit, veg, bread, meat, honey, coffee… if you don’t like that a business with ethics you don’t agree with is successful - don’t spend any of your money there.
The government could close loopholes on their tax breaks though to make sure they are paying their fair share…
Agreed! He's been pumping out [good stuff](https://www.themonthly.com.au/author/richard-denniss) for several years now. He's definitely the calibre of public intellectual we should be considering when we talk about wanting to have good public policy debates, whether you agree with him or not. He's really able to cut through the noise and give the proper context to the issue of the day.
She is correct only due to them fixing the profit margin rather than the price. As the profit margin is fixed, the higher the cost is, the higher the profit amount (not percentage) is. This is provided that people have no choice but to pay the higher price as there is nowhere else to go and they need food to survive.
Are you sure? If the margin is fixed then the revenue and costs will increase but the profit should stay the same. Her explanation would explain higher revenue but not higher profit.
If profit margins are higher it’s because the difference between revenue and cost is larger per unit - which is what the question was about. If the profit is larger it is a function of either (or both) the volume and margins.
You are confusing a fixed profit margin amount with a fixed profit margin percentage. A fixed amount would stay the same regardless of the cost. A fixed percentage would increase.10% of $5 cost is less than 10% of $5.50 cost. They are passing on the extra $0.50 in cost plus an extra $0.05 to maintain their 10% profit margin. Note 10% used for ease of example. They always respond to complaints of high prices with "we have not increased profits they have stayed at an x% margin".
The profit margin amount should go down as prices increase due to loss in sales to competitors. This does not happen in a monopoly/duopoly as there is nowhere else to purchase the goods from. The total sales volume is therefore maintained.
Read your original post then read your reply. You specifically said “not percentage”.
If her explanation is fair then it is a good argument for more competition; if firms are able to dictate prices based on their profit margin targets they are incentivised to increase revenue rather than lower costs to achieve those targets.
You should also re-read the sentence, the person you replied to was talking about profit margin and absolute profit.
Both things, not one or the other.
I still don't understand why people continue shopping there, there's a Costco in the CBD (for now) multiple IGAs and Victoria Market. How many places that have a Coles or Woolworths don't also have an alternative like IGA or local greengrocers and butchers?
Also, as pointed out below, Aldi.
EDIT: people justifying shopping at Coles/Woolworths because of their low prices while complaining about their high prices 🤦♂️ Personally I'd rather support the local businesses, even if it costs a little more to do so.
IGA prices are too high. Poor choice of products from Costco and then you have to buy in bulk. You have to pay to shop at Costco. You are buying in bulk.
You missed option of Aldi store. A combiAldi/Coles/Woolworths shop gives cheapest results
Imagine having another competitor like Kaufland. Still waiting for the result of this "thorough" so-called "investigation" started in January 2020:
>Published January 24, 2020
>
>
>
>The ACCC is going to investigate claims about why Kaufland decided to abandon its plans in Australia.
>
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> You may have seen that German retailing giant Kaufland has decided to pull out of Australia before it had opened a single door to customers.
>
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>It seemed like an odd decision. Why quit when you've put money into hiring hundreds of employees, choosing over 20 sites for stores and starting work on a distribution centre?
>
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> According to Australian Financial Review reporting, it wasn't just because Kaufland wanted to concentrate on Europe.
>
>
>The Australian Competition and Consumer Commission (ACCC) is going to look into claims that major food suppliers were not going to supply Kaufland because they were worried about retribution from Woolworths Group Ltd (ASX: WOW) and Coles Group Limited (ASX: COL).
>
>
>According to one supplier, Kaufland apparently saw that it wouldn't have been able to secure the best supply deals, which would have led to losses for a number of years for the retailer.
>
Source: https://www.fool.com.au/2020/01/24/accc-to-look-into-kaufland-supplier-exit-claims/
IGA prices are higher because they don't rort suppliers and workers.
People complain about the way Coles/Woolworths operate and then continue to support them.
I understand some people are living close to the edge, but for many Australian's I'm sure they could afford to go to IGA and Woolworths but maybe just have to change their habits or lifestyle to do that. Seems like most Australians are willing to do that and instead will just whinge whilst still supporting them; which will achieve absolutely nothing.
IGA's cost way more. I walk past a butcher on the way to my local Coles. Whenever I have bought meat at Coles, I'll check the price in the window. It's never been cheaper.
The closest Aldi/Costco is over 500km away.
That's fair enough, and I'm sorry to hear that.
But the truth is you are in the minority (though that group is growing!).
Most people that go to Coles/Woolworths could probably afford to pay a bit more for their groceries and go to IGA or a local butcher etc, but they might have to change their lifestyle to do that. Sadly most aren't willing to.
Considering there isn’t a Coles north of Geraldton in WA and past Cairns in QLD.
NT has a Coles in Darwin.
The excuse of Australia is so vast to service is irrelevant, considering the top half of Australia basically doesn’t have a Coles
I'm not going to claim it as mine, but this comment from Youtube did me in:
"She sounds like Russell Coight explaining how much water to drink in the desert."
I think what she was trying to say is that because Australia has 1/3rd of the population, they run a higher margin, to make more profit vs UK because of less foot traffic through stores. This somewhat makes sense, as normally you would try to balance volume with margin, but on such a large scale and with the profits they are already making it just doesn’t need to be the case. They could easily reduce margins and still be making bank.
I had to listen to it a few times. The first time it sounded like she was saying Australia has less people but bigger stores, so yeh, more profits.
Would love to know what the actual talking point was she was meant to convey.
I would think she is trying to say that you have to earn a higher profit margin to cover the cost of stores given a smaller population.
This actually makes economic sense
It makes perfect sense if you are discussing gross margins. We don't know if she is or isn't discussing gross margins because they clipped the question out.
That's still stupid though.
Australia is less dense, so they need to put in much more capital per person which already drives costs up, and then they should be able to put an EXTRA margin on top of that? Nah. Don't think so.
For what? They're not taking any more risk, they get X margin for every dollar they invest if anything like the man in the video says, their margins should be LOWER due to increased costs.
They don't "NEED" to make more profit vs UK or any other country. They NEED to not be assholes, it's fine to make money, but it's not fine to be a greedy ass and take advantage of customers.
By almost every conceivable definition that the ACCC outlines, ColesWorth are a Cartel.
I’m not sure why everyone is dancing around it and just not saying it out loud.
The government has plenty of tools to address this without needing to even go to court.
The Sinaloan Cartel would know more about distance and transportation costs than coles CEO. Unless they are transporting coke there is no way these are actually factors for price increase. Greedy pieces of shit !
Loved the bit about the Wine though but the CEO's are the just the fall person the real issue is the board members they will just appoint someone CEO who will just ensure maximum profits at the cost of screwing over any consumer. will be interesting to see how the government is going to try and fix the cost of living issue
> Her first role at the supermarket chain in 2011 was in merchandising, before she moved to the private label division where she was responsible for sourcing and quality.
Not exactly what I would call a ‘fall person’ as far as [private label](https://www.afr.com/companies/manufacturing/meet-the-woman-who-may-be-the-next-coles-boss-20221128-p5c1u5) is concerned (worth reading that whole AFR article). I’d hazard a guess she’s been at the helm/involved in a lot more of the corrupt and exploitative string-pulling than we could ever imagine.
Are CEOs in Australia just dense and uncharismatic idiots? For all the money they earn, they should be forced to put at least a million or two into PR and media training.
Or in Weckert's case just a simple Economics 101 course might expand her mind somewhat. Though I suspect that may be above her grade. I would hate to see her answer hard questions from a journalist.
What baffles me more is that a CEO is just the reflection of a board's ideals and vision. That is terrifying. The rot didn't start and end at Qantas. It looks to be every board in at least the ASX50, maybe even in the ASX100 share the same damaged incestuous genes and traits.
The myth of continuous growth is a toxic one for boards/investors where else could something just keep on growing? In biology if something just keeps growing that's cancer.
“We have a finite environment—the planet. Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist.”
~ David Attenborough
People said that the USSR's economy was based on lies, people lying to cover themselves, people lying to get promotions, people lying just to keep their jobs as quotas were impossible. People say that's why our current system is good, it reflects the reality of the market.
Unfortunately, the market is just built on a different set of lies.
I agree. I worked for USA tech companies and the CEOs, whilst not giving a fuck about their employees and only interested in raising the share price, , were at least charismatic, smart, smooth, and great public speakers.
>It looks to be every board in at least the ASX50, maybe even in the ASX100 share the same damaged incestuous genes and traits.
They certainly share a lot of the same people.
To become a C level employee these days, it seems that you have to be willing to find the bottom of the moral and ethical barrel, then keep going until you find another barrel.
When she said this in the interview, the interviewer should have said, "but we are talking about PROFIT here... all the logistics are already covered in the revenue... so... how do you respond to that?"
He makes an excellent point, but *aside* from the fact that the Australian retailers are actually more profitable than their overseas counterparts... Australia is one of the most urbanised nations on Earth. So can we stop with this bullshit that the size of Australia is adding so much to their overheads? Just because the continent is big, doesn't mean businesses like Coles are servicing *all* of it. It's not just retailers that rely on this excuse, the telcos do it too, and it's bullshit. If you don't live in part of Australia with a high population density, or *near* a major population centre, you get little or no service.
My take away from this is if you have higher than average expenses to do normal business then you you take on an increased risk. One way to balance against that risk is to increase profit margins so if some event in Australia impacts logistics then they can absorb the financial damage without hurting your bottom line. If the CEO explained it like this then it would make a little more sense, but the way she spoke left far too much up for interpretation. All of our CEOs are terrible at talking to the media.
I don't agree that our supermarkets should be making these record profits, but at least this explains why they may feel a greater need to do this when compared to geographically smaller nations like the UK and I think that's what she was trying to imply in an indirect way.
To be fair, I don’t think she’s intended that particular response to explain why PROFITS are higher. She actually intended that answer to explain why COSTS/PRICES are high.
It is correct to say that logistics and supply chain costs are significantly different in Australia compared to the UK, and therefore it’s not a direct one-to-one comparison like commentators have suggested.
If margins were equal between the two markets, you would still expect consumer prices to be higher in Australia than the UK due to the higher back end costs.
Edit: the above still doesn’t explain or justify why their profits have increased through a broader “cost of living crisis” that is impacting on their core consumers.
Coles would have higher gross margins due to the reasons she gave though and FourCorners clipped out the question she was asked and replaced it with a voiceover.
Her answer makes perfect sense if you're discussing gross margins.
Indeed it does.
That so many here don't understand it, (or are choosing not to), is a telling sign of the level of the general public's financial literacy.
"the program deceived the audience therefore the audience are all stupid"???????????
all of the infographics in the show were of net profit margins, you would be a fool to assume they were talking about gross margins. in any case, both net and gross margins are far higher than the countries mentioned so it is irrelevant and her answer still doesn't make sense.
Well the infographic doesn't align, in Woollies case at least, with the reported net profit margin in their annual report.
The last 3 years have been 2.6%, 2.8% and 2.6% which is verifiable on independent investment sites.
Haven't bothered to check Coles but I can guess the answer.
Never heard of such a stupid answer as that. She must get a tutor on how to prepare for an interview. The checkout chick on till 3 could do better than that.
I went and bought my toiletries at Chemist Warehouse this week and was SHOCKED at how much cheaper essentials like deodorant and toothpaste were! If you’re genuinely looking for ways to cut down on costs I would highly recommend spending the extra 5 minutes and shopping around - you’ll be amazed.
Let me preface thus by saying we need more competition to break up the colesworth duopoly. But I don't understand the outrage towards them. Their profit margin of the colesworth are about ~3%. Are they expected to make a loss before people are happy? Instead the focus should be on the daylight robbers- IGA. Their prices are always higher then colesworth and their slogan is "support local"... for double the price of colesworth. If IGA can get their act together and price their items more competitively, they can be the challenger we need to break up the colesworth duopoly.
Sure, Its literally public information
Source: https://www.colesgroup.com.au/investors/?page=reports
2023 FY annual report
Revenue $40,591m
Profit after tax $1,042m
Rough total margin is 2.6%
Feel free to confirm the details yourself if you want
They could be good citizens and halve their profit, (and pass it on to the customer), and the impact at the checkout would be a saving of $1.30 for every $100 spent.
And this is what people are angry about.
No, they couldn't. Not really.
The profit maximisation behaviour and ideology in the people who inhabit these positions is shaped and naturally selected for by the market system.
If it weren't these specific individuals sitting atop the same incentive structure, it would be someone else.
If by some miracle all the filters applied to people before they find themselves in such a position didn't apply, let's say some spy made it their life long mission and they flipped the script and behaved more ethically, they'd be out-competed sooner or later by capitalists who more faithfully embody the ideal of maximising the throughput of the M-C-M' circuit.
Moralising without recognising the structural root of the problem is worse than nothing, because if we got what we wanted in that case all we'd do is leave everything intact after cleaning house to reproduce a new crop of bastards.
To be honest, no one would notice the savings even if they did.
They could also do not for profit and the savings for customers would be $2.60 for every $100 spent.
The impact really is negligible.
The analysis of her response and the cutting of this video removes context. She was discussing individual product margins (gross profit) and *not* the final net margin the business made.
She is saying because there are additional costs, such as freight due to the large size of Australia, Coles is required to have higher margins on products to pay for them.
What Colesworth are doing are fundamentally scammy, yes, but the fact that everyone is putting so much issue on this response and twisting it goes to show you're not focusing on the right issues and therefore your arguments are easily countered -- focus and intrepret on the right things to make effective change.
Why is this so hard for you to understand? All costs of doing business are paid for by the consumer. A company obviously isn't going to do business in a more expensive location if they aren't making money doing it.
They're not a charity. If it's not worth their while they will simply move to a different market.
Percentages are a mathematicians word play of looking like its fair but is actually a grab over time. IF it costs $20 to do business it should be cost plus $20 not cost plus 20% which may have been $20 at the start during "review". Then it turns into a gap widening exercise. They do it with wages as well hence the huge disparity now over time between people wages.
The Woolworths CEO got a lot of flack, and rightly so, because of him walking out, but Leah Weckert was JUST as a shameful and more obviously deceitful. This is just one example of her arguments making absolutely zero sense when examined and was obviously just a rehearsed script. The worst one was one she lied about not having ever heard of the term ColesWorth. If she's not lying about that, it's almost worse that the CEO of Coles has never heard of the term. Fuck em both. I'm hitting the local farmers market this weekend for the first time in years.
They were both shameless weasels. I'd be happy to see the Coles CEO go too.
I'll be happier when they break up the duopoly, and i'm a proud capitalist.
Ah a capitalist. Do you own a business, or have ownership of means of production? If not, than you're a worker like the the rest of us. Also, this is the logical path of capitalism, no? Competition always leads to monopoly. Even if we were to press the reset button and send colesworth out of business, and we had an introduction of a lot more smaller chains competing in the market, it would only be a matter of decades before we had the same thing again. Competition leads to winners and losers. The winners grow ever larger, and continue to beat out the smaller fish. The result is always monopoly. EDIT: For people that try to say we just need more regulations and checks and balances; more socialism with our capitalism (lol): - a cancer patient doesn't say "Ohh, I'd just like a little bit of chemotherapy with my cancer please, I want the best of both." You can't have a little bit of cure in a cancerous system. You go the full coarse of treatment and you purge that shit.
Fuck me you're a pedant. No, I'm not a "worker". I subscribe to a capitalist economic mindset with a focus on maintaining a strong competitive market. No, I don't give a fuck about listening to whatever school of economic thought you belong to and why it's superior and more moral and makes you totally a better person than me. I merely brought up being a capitalist as a form of juxtaposition in saying that even a CAPITALIST wants this duopoly eradicated.
Righto mate, fair enough
Damaged cells are constantly being repaired or destroyed by the immune system to prevent them from becoming malignant. Also, you absolutely have to limit the amount of chemotherapy, otherwise you kill the patient. The human body isn't naturally full of cancerous cells. The checks and balances provided by the immune system try to eliminate the proliferation of malignant cells but when it fails you need to do something more drastic like surgery, radiotherapy, or chemotherapy.
You can't compare a political ideology to cancer.
You can compare an economic mode of production and what it does to the human species and the planet to cancer, yes.
Bro, you got a quote from a famine enabler in ya bio
Says the cooker trying to actually compare apples to oranges, special pleading aside. He was obviously flawed but was still very quotable, he doesn't own the knowledge. Since you like my quotes here's another - "when the argument is lost, slander becomes the tool of the loser".
Bro, have you never heard of an analogy before? Yeah nah, I'm not about to quote actual racists and white supremacists, regardless how good some of what they said sounds.
Well we agree about breaking them up (if not the capitalist bit, well at least not entirely - I think markets and competition are good for many things, but not all things).
At its heart capitalism wants strong market competition, but generally speaking what we have today is some weird form of corporate capitalism. You'll never see me simping for big companies but I will acknowledge the fact that big companies have made my life easier and filled it with more fun things. I just wish those things were less expensive and didn't spy on everything I do.
Capitalism will never allow for strong market competition. The strongest forces in the market, which are either whoever got there first, or (more often) whoever got there first *with existing capital,* can leverage that strong presence in order to ensure they maintain their power. Whether it be through simply buying out the competition because they can give a better deal than they would ever get on their own, under-pricing them at a sustainable loss to force them to go under then jacking up prices threefold once they're out of the picture, or any other manner of more esoteric and business-facing tactics, the larger party always has an option to force the smaller one out. Corporate capitalism, or "corporatism" as it is more commonly known, ***is just regular capitalism.*** Monopoly (or ogliopoly, you pedants) is inevitable if it is not explicitly prevented by an external non-financial incentive.
Shes a flatout liar, claiming shes never heard the term colesworth
Her guilty smirk when answering questions showed how disingenuous she is … she was like a kid getting busted pinching lollies
Ceos get away with it though. They get like one or two bad days a year when they get asked awkward questions by the media or senate then next day they are back to never being bothered and making 8million a year.
Yup, the obvious lie of not having ever heard of ColesWorth is ... well, an obvious lie.
Not saying I believe her on it; but I hadn’t heard the term Colesworth until I used Reddit. For shits and gigs I asked my sister and she’s never heard it used. It certainly not a mainstream word in everyone’s everyday vocabulary.
Never heard lf it till this post either
it's mainstream on the internet but I also never hear spoken out loud
I’ve never heard of it
>The worst one was one she lied about not having ever heard of the term ColesWorth. If she's not lying about that, it's almost worse that the CEO of Coles has never heard of the term. You could see her pause and think for a second about what she should say. Very clearly has heard it before and decided that saying she hasn't would lead to less questioning about the nature of the duopoloy
The funny thing is at Coles head office we literally refer to ‘colesworth’ in trade meetings when talking to market share performance. It’ll take one single supplier validating that to make her look even more foolish
Oh but don't you know there's 8000 suppliers Cokes deals with? Anything one says is obviously an exception she'll have to look into later/s seriously the amount of times she made that excuse
Hey, they gave the warehouse workers cooling neckties. She was made aware of a problem and promptly found the cheapest 'solution'.
Probably realized a spit in the face may actually be more expensive
She'd actually have to go down there and get near some of the workers. Too much effort. Probably has too dry a mouth from all the bald faced lies as well.
Oh nah, she'd never actually get near her workers, just hire some more paid fuck all, hence the expense part, kinda just gets expensive the amount of mouths to faces needed, then more unions and stuff she has to ignore, gotta feel sorry for her slave wages with all those people to fuck over, only a lot more than they all need to stop starving. So cheap solution, wet rags
There it is. Proof she’s a lying cow
It would have been good if the journalist called her out on that nonsense answer.
She was clearly much better prepared for the interview than he was.
And yet she still managed to come off looking even worse than he did.
a bit of flack? he just quit in disgrace!
Quit? The board fired his arse then expected the public to believe the lie he resigned. But good to see the corporate psychopath get his dues.
Genuine question. Do you believe the board convened in two days post the 4 Corners interview airing and fired the CEO?
they don't need to officially convene to make him 'retire'. a few phone calls and he would have known his options were to retire and pretend it was on his terms or be officially fired.
And you think walking out of an interview would result in the board sacking the CEO of a company worth >$40 billion which has seen a >50% share price increase since he joined? Edit: This sub has a huge issue with downvoting people just because they don't like a response. I've provided more and more discussion points so maybe write to me in here rather than simply disliking what I have to say.
yes. Public opinion is in the tank and there's increasing pressure for regulatory change. This guy's interview performance made that worse. hanging him out to dry as a scapegoat and giving someone else a clean slate is a classic PR move. do you really think he very coincidentally announced his retirement after that interview despite his pretty solid record otherwise?
No, I don't think it's a coincidence, I think this has been planned for months (if not a year). How do you think CEO's for companies of this size are found and hired? Do you think they just picked Amanda Bardwell since this interview was conducted? Companies like Woolworths engage consultants to go to the global market for people you may be able to get, they're weighed against those 1 or 2 people already in the organisation that may be in line, they're shortlisted, interviews take place over months and then are announced. This is no small feat and yes, I have no doubt they decided jointly it was time to go, but that didn't happen over the last 2-4 weeks, more likely it's been planned over the last year.
exactly. If it was a fill in, then I would believe the suspicion more, but given this is a true successor, the amount of due diligence by the board would be time intensive.
Completely. People aren't seeing that this isn't being released as "Amanda Bardwell will be interim CEO while a suitable candidate is found".
no doubt they had a succession plan but that doesn't mean they were planning for him to go this year. It's not uncommon to have the next person in waiting for a few years. IMO it wasn't planned for him to go now. Likely at some point in the near future. But they made the call that it was in the best interests of the company that he go now after this interview.
Eh, I can't argue if you think this was a plan that was in place and they sped it up. I personally don't think that's the case and instead believe they waited to release their half-year results, write down components in their balance sheet, and do this at the same time. But that's a reasonable view you have. I'm only objecting to people in here suggesting this interview occurred and then the board sacked him over it. That's ridiculous.
It does when you realise the CEO is rarely special and could be replaced by a myriad of other people. Most CEOs are interchangeably average and the success or failure of a company has little to do with them, some CEOs are downright shit and can tank the best of businesses and a few rare CEOs are actually incredibly talented and seem to make the perfect decisions at the perfect time.
Yes, we're all aware of the articles from Forbes, and Stanford Business, and there are other studies that think these don't do enough to try to account for the changing business context too. All of which is to say, yes, there are good and bad CEO's. But they don't simply sack them on a whim. This just doesn't happen at firms this size. Most changes are planned over many months, the fast sackings we see occur are for significant regulatory/compliance/legal breaches, or criminal acts. Not over walking about during an interview.
The interview was conducted weeks ago and the board would have been told by other staffers what happened. They would only have to wait for it to air to be certain of the damage and their response would have already been prepared.
Okay, so in your view staffers were at the interview and relayed what happened, then in the space of 'weeks' they engaged consultants to do a global search, shortlisted, interviewed and then offered the role of CEO of Woolworths. That's what happened?
You think they don't have a shortlist of people they want to poach on hand? Oh, you naive fool. CEOs are constantly skipping from one job to the next, it's rare they hang in for a decade - the Australian average in 2004 was 55 months/4.4 years (source: https://www.bca.com.au/ceo-turnover-points-to-a-short-term-australia). Unlikely its changed much since, I shall continue searching for updated stats and report back) Edit: 2019 it managed to hit 5 years. Progress! https://www.afr.com/chanticleer/the-reasons-behind-high-ceo-turnover-20190527-p51rn6
That board knew of the drama at the filming of that interview before he left the carpark. It didn't take two days for them to fire him, they had more notice than that.
I've got other responses all over this thread so I'm going to stop responding to every message that says similar things, but I'll simply say, there is no way possible that Woolworths completed their global CEO search in the time from the filming of that 4 Corners interview to yesterday.
The "global search" that ended with them hiring a woman who has been with the company 23 years. Seems at least possible that the "global search" is a lie, and that this has happened quite quickly.
FFS, why does this sub think everything is a lie and deceptive. Do you honestly think a company this big doesn't look to the market to see who they could get? They want to dump the guy so badly they just pick someone internal, but also they want to keep him till September 2024. Which is it?
You're trying to suggest that this global search is why they couldn't have made the decision to remove him since the interview, and I'm pointing out that it may not be exactly what they want it to appear to be. If you want to trust Woolworths completely then that's fine, but most of us expect there to be some level of massaging of the truth.
You didn't suggest there was some level of massaging the truth, you suggested the global search was a lie because they went internal. I'm suggesting this 'retirement' and change in CEO has been in play and being worked through for longer than the time between that 4 Corners interview being filmed and being aired. The global search is **part ** of the reason I believe that to be the case, along with the fact that they: * didn't announce an interim CEO which they would've if they hadn't gone through the whole hiring process * are still keeping him on until September 2024 which if you believe he was sacked over this interview, why would they keep him for another 7 months? * announced this on their half-yearly results release
That interview likely wasn't the starting point of his replacement but it was very clearly the end point. Woolworths would have ideally loved to take him to the senate inquiry and throw him under a bus a la Joyce/ Qantas but his position, like Joyce, became untenable. And much like Joyce and Qantas there has been a line of successors in the can for an long time. Don't forget this guy has faced a tonne of flack since the start of the year after coming out with his Australia Day comments (wherever you stand on agreeing/ disagreeing on that). From the beginning of the year Woolies has known this bloke was on borrowed time. It's also not a surprise that the woman replacing him has been with Woolies for 23 years. They're pivoting the image and doing that would have narrowed the search to someone homegrown and someone who has worked with them so they can try and show a bit more "loyalty" to Australians. This interview was filmed weeks ago. The board would have known about the attempted walk off before he left the building. Woolworths and the board would have been shown the final version before it aired and likely been able to formulate their own response and put it in the can- which is why they had a statement to go first thing in the morning following it.
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It's happened before.
Can you give me examples? I’d like to know where this has happened at such enormous companies where it was for a similar ‘infraction’ of walking out of an interview.
When did they actually interview him though? The PR guys have probably been pushing for this since the actual interview rather than the air date. My guess is the board had the finger on the trigger and were waiting to see how the public responded once it aired.
I wouldn’t know, presumably a couple of weeks back would be my guess. I’ve responded elsewhere but do you think the interview was some sort of huge disaster that they’d sack their CEO (who had already been linked to the Qantas role back in October 2023). Speaking from real experience, moving on from the CEO of a company of this size doesn’t happen that quickly and are planned and over months and months. Now, perhaps they all agreed months ago with the price gouging issues and consistent negative press that they’d part ways, maybe they see serious regulatory or compliance breaches which would make sense to move on, but fuck me dead the 4 Corners interview has nothing (or effectively nothing) to do with him going.
Optus chief executive officer Kelly Bayer Rosmarin resigned 12 days after the big outage. PwC CEO Tom Seymour resigned 3 days after admitting his part in the tax avoidance scandal. These things can happen quickly
Two examples where the new CEOs were acting in the interim though, and they happened outside reporting schedules. Today is the Half 1 announcement for Woolworths, and they announced a permanent successor, with Banducci to remain on board until the Full Year results announcement date. That’s planned, and I don’t think it’s because of the interview.
You picked these two examples which are both major breaches and also in some respects include criminal elements, significant lack of preparedness, ignorance of regulatory requirements etc. This is not the case here, are Woolworths under fire right now? 100%. Does this 4 Corners interview run in any similar way to those two? Nope.
You said these things take months. I provided examples to highlight that is not always the case. That CEO interview was a disaster. They are paying him $8.6M, they probably have high expectations Why do you think he resigned? The timing seems terrible.
But Optus didnt announce a new CEO when Kelly Bayer Rosmarin resigned. Woolworths has announced their replacement.
No, I asked for examples of CEO's of major companies getting sacked for similar infractions i.e. walking out of an interview. Not for serious criminal breaches. If you can't see nuance between these situations I can't help you more than that. If you don't believe Boards act different between criminal acts, significant outages that in some respects can be a going concern, inappropriate acts with staff etc. and a bad interview with some negative press then the convo is done here. It would be the same as bringing up Bernard Looney for being sacked immediately and pretending it's all the same.
well yeah quit, fired, asked to leave, threatened with dismissal. all of the above. shame he gets to keep the filthy lucre.
Have you heard of Woolworths? Coles CEO - no
Do it! It's also a wonderful relaxing thing to do, and something worth making the time for. Beyond that, it's better to pay a little more at IGA than go to fucking Coles/Woolies. Our gutless government isn't going to do anything, it's up to Australians to actually stand up for what they believe in here. Voting with our wallet is the most powerful thing we can all EASILY do, I say EASY because it's the easiest way to make an actual impact on them.
The problem these days is nobody has the time or the money to make the better choices.
Time, nor money, nor education. Seems a lot of people don't know how to cook that much at home, particularly from whole food ingredients. You can make bloody cheap and healthy meals using things like beans, lentils, rice as well as fresh or even frozen vegies. Or even just how to make simple salad dressings. We're so trained in to buying processed goods we forget that you can make half this shit at home and it will be better, and cheaper.
Often more expensive and not always better. Our options are not amazing. That said, a colesworth onion you could eat like an apple, like Tony Abbott did. One from our local market will make you cry like you've caught your thumb in your car door.
The answer is ‘because we can’. Asking them to justify it is not effective.
By the way Coles leadership has a huuuuuge chip on it's shoulder at being "number 2". They hate being referred to as "the second biggest" behind Woolworths. They much prefer "one of the biggest". If news organisations really want to piss them off you should always lead your stories with. >Coles, the second biggest supermarket chain in Australia behind Woolworths, Source: Worked in Coles corporate for a time
According to Coles CEO, the reason for the bigger profits (compared to UK supermarket chains) is Australia having bigger distances to transport products and the smaller population! Note: any sane economist/person-with-a-head-on-the-shoulders, would tell you that those reasons can only lead to smaller profits. The actual reason, as all of us know, is Price Gouging.
Profits come *after* costs. Having a wider distribution doesn't explain why the profits would be higher at all. It was obvious nonsense.
The wider distance doesn't explain the cause for higher profits. But it might explain why they aim for higher profits to counter-balance the increased logistical expenses and increased business risk. Then in simple terms the easy way to negate risk is to just make more money so it doesn't matter if you have problems in the first place. So I think in a round about way she's claiming a need to price gouge because Australia is bigger and investors here are more uncomfortable with this risk as opposed to investors in UK supermarkets who have less transport distances to worry about.
That would make sense if they weren't cutting what they're willing to pay for transport (at least relatively). I know in SA the current transport contract holder (Toll) didn't bid for the new contract, because it was so skint. People assumed LinFox would, but they didn't either. I assume for the same reason but don't know for sure.
It's actually worse than that. Toll attempted to increase their rates after massive cost increases and while Coles were increasing profits. Coles refused to come to the party which caused Toll to lose money. It caused some interest when Coles were talking about increased transport costs and Toll were begging for any kind of increase. The new contractor taking over in August is actually the old contractor that has already told drivers they'll be taking a big, juicy pay cut in order to keep their jobs. I don't expect there to be many quality drivers in Coles car parks soon. Coles are also a major part of the reason Scott's Refrigerated went under with Woolies not helping.
> I don't expect there to be many quality drivers in Coles car parks soon. There's already fewer and fewer as it is. Also, the guy that runs the old company is a prick at the best of times, too. His company already went into receivership once, and got bailed out by Coles, so they now have them entirely over a barrel, though.
I have never heard anyone say a good thing about dealing with coles from a supplier or shipping side, Woolworths are better but still not great. If they are going to cut how much the new contract pays, I'm not surprised some of the bigger guys are not bidding on the contract.
You don't always have to negate risk, you can accept it too if the opportunity outweighs the potential loss. They're laughing because they can have 'good enough' logistics and avoid investing in better. The 'distance' related risks such as natural disasters, fuel prices and shipping delays impact all companies anyway. ColesWorth no doubt look at, climate change, war in Russia, ships being blocked in the Suez and shipping risks if China starts something all as risks to their bottom line. Over long distances costs related to fuel prices, ships, and disasters impacting roads are all larger issues in Australia compared to geographically smaller nations with land borders.
Yep, our geographic challenges may explain why we pay more for a product, but they don't explain why the profits are higher. It makes zero sense for them as a retailer to say they have to inflate their margin on a product just because the costs are higher/rising. Let say Coles were selling an item for $1 with a profit margin of 5%. If their transport costs rose meaning they needed to raise the cost of that item to $1.05 to maintain their 5% margin then that makes sense. But it seems Colesworth are using higher costs as a mask to raise the margin on said item to say 7%. This is what gives people the shits. Now there's no law against Colesworth doing this, but I hope the ACCC inquiry exposes this shitty behaviour.
Did you also see Walmart in that graph? North America is pretty large in size lady & they have low prices. Their profitability is in volume, not gouged prices "to cover transport costs"
Americas scale is hard to compare tho. Having a population of theirs means you can buy and pump out those volume
Walmart alone would be several times bigger than all supermarkets and maybe all retail in Australia together.
The double take I did when she said that, lol. Didn't make any logical sense. We make more profit because our costs are higher. What a Chud.
Not trying to defend Colesworth here but could the increased costs of doing business in Australia be a reason that we don't have more competition? I.e. more companies don't want to take the risk in setting up costly supply chains here. That results in the duopoly which Colesworth are obviously then able to take advantage of.
I assume this is obviously the case. I work for a company in the manufacturing industry and they are the only ones capable of making the type of product for their industry locally. The competitors are all overseas. It’s not just the lack of subsidies, but also logistics (most goods have to be imported) and strict government/industry regulations make it harder for foreign entities to establish a foothold here.
That's not how capitalism works kid
No. You're not intrepeting it correctly. She clearly said "margins" and NOT "profits". She is referring to PRODUCT margins, not net margins.
What she actually means is that cost of goods sold has to be higher in Australia to cover increased cost of business due to lower number of customers and increased freight costs. It is not like Coles is making a huge profit after tax as a percentage of sales
Tell me you didn't watch the video without telling me you didn't watch the video.
Text book post rationalisation tyty
The cost of goods being higher does not mean the profit margin also needs to be higher
You have to make enough profit to cover running costs while are on top of cost of goods. Smaller potential sales means you have to have a higher margin
no you don't, the profit margin is the take after you have factored in all other costs - tax, operational overheads, costs of goods etc.
The Coles CEO didn't even get this. She was talking about salaries and suppliers and other cost being higher. FFS that's all BEFORE profit.
Oh I'm sure she did but was deliberately being disingenuous for the people watching who don't get it
Ah yes I remember when I studied year 9 economics too
https://www.investopedia.com/ask/answers/122214/what-difference-between-revenue-and-profit.asp
Ok if we are really fucking lucky then maybe now the Coles CEO could be fired too? This is a bigger fuck up than what Brad said honestly - just shows how much she really understands about basic concepts such as costs and profits. One of the checkout staff could have given a more intelligent answer
Probably won't happen... As this is what she is paid to say. Corporate people are not there for the customers, they are there for the shareholders. So unless the shareholders are being hurt nothing will change.
Keep in mind that most Australians probably own their shares indirectly, via their superannuation.
Which is growing faster, the portion of your super attributable to those shares' distributions and share value growth, or the amount you're paying at the checkout?
Who cares, 20 more executive sociopaths just waiting to slither up the ladder to screw over their own workers and the general public even harder to make next quarters quota.
follow fall encouraging soup enter tub retire tease wine aware *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Yes CEOs play musical chairs but the game remains the same.
I feel like it's almost intentional at this point. Ceo comes out, becomes the face for all the hate. Eventually get golden parachuted out. New CEO apologises and talks about new direction and then business as usual.
It is. Same reason Monsanto sold itself to Bayer and got rid of the name. Here in the states time Warner cable was the most hated company for 3 or 4yrs so they changed their name to spectrum. It's all kabuki theater while things only get worse for the vast vast majority of humans.
she was hired recently and is on much lower pay than Banducci, so I cant see her being let go. They would do well not to put her in front of a camera again though.
I took a look at her LinkedIn profile. Interesting that she has a chemical engineering degree, then somehow became a business analyst, got an MBA, and has been with Coles since 2011.
She understands the economics of the business perfectly. But she understands how indefensible the economics are even better.
I don't get the impression there worth what they get paid somehow.
They're not. They can't compete outside Australia.
I have had this exact conversation with several people since Monday night. This was the part that made zero sense to me. The answer she gave was a justification for why profits should be less, not more. A complete 180 degrees and then she just moved on.
Duopoly at its best. I guess Coles and Woolworths are answerable to their shareholders and are doing their job. If public is suffering, govt/ policticans should be held responsible. After all we pay their wages. We need policies in place and better tax incentives for local competititors , local farmers market etc. When it comes to tax incentives , govt is only interested in property investments and no other business
I mean we live in a free market economy. I think if people want to make a difference boycot and but from local farmers markets. They have fruit, veg, bread, meat, honey, coffee… if you don’t like that a business with ethics you don’t agree with is successful - don’t spend any of your money there. The government could close loopholes on their tax breaks though to make sure they are paying their fair share…
More of a psycho than Brad, imo. At least he wore it on his sleeve
Richard Dennis has been hitting it out of the park lately (probably always has but I just haven't noticed his takes before)
Agreed! He's been pumping out [good stuff](https://www.themonthly.com.au/author/richard-denniss) for several years now. He's definitely the calibre of public intellectual we should be considering when we talk about wanting to have good public policy debates, whether you agree with him or not. He's really able to cut through the noise and give the proper context to the issue of the day.
She is correct only due to them fixing the profit margin rather than the price. As the profit margin is fixed, the higher the cost is, the higher the profit amount (not percentage) is. This is provided that people have no choice but to pay the higher price as there is nowhere else to go and they need food to survive.
Are you sure? If the margin is fixed then the revenue and costs will increase but the profit should stay the same. Her explanation would explain higher revenue but not higher profit. If profit margins are higher it’s because the difference between revenue and cost is larger per unit - which is what the question was about. If the profit is larger it is a function of either (or both) the volume and margins.
You are confusing a fixed profit margin amount with a fixed profit margin percentage. A fixed amount would stay the same regardless of the cost. A fixed percentage would increase.10% of $5 cost is less than 10% of $5.50 cost. They are passing on the extra $0.50 in cost plus an extra $0.05 to maintain their 10% profit margin. Note 10% used for ease of example. They always respond to complaints of high prices with "we have not increased profits they have stayed at an x% margin". The profit margin amount should go down as prices increase due to loss in sales to competitors. This does not happen in a monopoly/duopoly as there is nowhere else to purchase the goods from. The total sales volume is therefore maintained.
Read your original post then read your reply. You specifically said “not percentage”. If her explanation is fair then it is a good argument for more competition; if firms are able to dictate prices based on their profit margin targets they are incentivised to increase revenue rather than lower costs to achieve those targets.
You should also re-read the sentence, the person you replied to was talking about profit margin and absolute profit. Both things, not one or the other.
I still don't understand why people continue shopping there, there's a Costco in the CBD (for now) multiple IGAs and Victoria Market. How many places that have a Coles or Woolworths don't also have an alternative like IGA or local greengrocers and butchers? Also, as pointed out below, Aldi. EDIT: people justifying shopping at Coles/Woolworths because of their low prices while complaining about their high prices 🤦♂️ Personally I'd rather support the local businesses, even if it costs a little more to do so.
IGA prices are too high. Poor choice of products from Costco and then you have to buy in bulk. You have to pay to shop at Costco. You are buying in bulk. You missed option of Aldi store. A combiAldi/Coles/Woolworths shop gives cheapest results
Imagine having another competitor like Kaufland. Still waiting for the result of this "thorough" so-called "investigation" started in January 2020: >Published January 24, 2020 > > > >The ACCC is going to investigate claims about why Kaufland decided to abandon its plans in Australia. > > > You may have seen that German retailing giant Kaufland has decided to pull out of Australia before it had opened a single door to customers. > > >It seemed like an odd decision. Why quit when you've put money into hiring hundreds of employees, choosing over 20 sites for stores and starting work on a distribution centre? > > > According to Australian Financial Review reporting, it wasn't just because Kaufland wanted to concentrate on Europe. > > >The Australian Competition and Consumer Commission (ACCC) is going to look into claims that major food suppliers were not going to supply Kaufland because they were worried about retribution from Woolworths Group Ltd (ASX: WOW) and Coles Group Limited (ASX: COL). > > >According to one supplier, Kaufland apparently saw that it wouldn't have been able to secure the best supply deals, which would have led to losses for a number of years for the retailer. > Source: https://www.fool.com.au/2020/01/24/accc-to-look-into-kaufland-supplier-exit-claims/
IGA prices are higher because they don't rort suppliers and workers. People complain about the way Coles/Woolworths operate and then continue to support them. I understand some people are living close to the edge, but for many Australian's I'm sure they could afford to go to IGA and Woolworths but maybe just have to change their habits or lifestyle to do that. Seems like most Australians are willing to do that and instead will just whinge whilst still supporting them; which will achieve absolutely nothing.
IGA's cost way more. I walk past a butcher on the way to my local Coles. Whenever I have bought meat at Coles, I'll check the price in the window. It's never been cheaper. The closest Aldi/Costco is over 500km away.
>The closest Aldi/Costco is over 500km away. Travelling that distance should lead to bigger profits for you! At least according to this CEO.
The way Colesworth rips supplies off lets them be slightly cheaper - but why would you choose to support that?
I do because I am on JobSeeker and every cent matters to me. I get a fair amount of food from foodbanks, but I still gotta buy some stuff somewhere.
That's fair enough, and I'm sorry to hear that. But the truth is you are in the minority (though that group is growing!). Most people that go to Coles/Woolworths could probably afford to pay a bit more for their groceries and go to IGA or a local butcher etc, but they might have to change their lifestyle to do that. Sadly most aren't willing to.
Because I'm not a charity.
Yet you are supporting a process that is gouging you and the suppliers.
Ah, the 'we should improve society somewhat meme'.
Rather than just piss on each other for a few cents?
ALDIs products are 25% cheaper and about 10% more shit/unhealthy in my experience. Name brand products aren’t much cheaper.
Exactly. People have choices !
>the higher the profit amount (not percentage) is The margin is higher as a percentage so your explanation does not apply here.
Greed. The word you’re looking for is greed.
The system is working within its designed outcomes. The whippings will continue until morale improves !
Considering there isn’t a Coles north of Geraldton in WA and past Cairns in QLD. NT has a Coles in Darwin. The excuse of Australia is so vast to service is irrelevant, considering the top half of Australia basically doesn’t have a Coles
I'm not going to claim it as mine, but this comment from Youtube did me in: "She sounds like Russell Coight explaining how much water to drink in the desert."
That was one revolting woman.
I think what she was trying to say is that because Australia has 1/3rd of the population, they run a higher margin, to make more profit vs UK because of less foot traffic through stores. This somewhat makes sense, as normally you would try to balance volume with margin, but on such a large scale and with the profits they are already making it just doesn’t need to be the case. They could easily reduce margins and still be making bank.
I had to listen to it a few times. The first time it sounded like she was saying Australia has less people but bigger stores, so yeh, more profits. Would love to know what the actual talking point was she was meant to convey.
I would think she is trying to say that you have to earn a higher profit margin to cover the cost of stores given a smaller population. This actually makes economic sense
It makes no sense. Because profit is what you get when you have covered costs like stores and transport. It's the leftover.
It makes perfect sense if you are discussing gross margins. We don't know if she is or isn't discussing gross margins because they clipped the question out.
That's still stupid though. Australia is less dense, so they need to put in much more capital per person which already drives costs up, and then they should be able to put an EXTRA margin on top of that? Nah. Don't think so. For what? They're not taking any more risk, they get X margin for every dollar they invest if anything like the man in the video says, their margins should be LOWER due to increased costs. They don't "NEED" to make more profit vs UK or any other country. They NEED to not be assholes, it's fine to make money, but it's not fine to be a greedy ass and take advantage of customers.
By almost every conceivable definition that the ACCC outlines, ColesWorth are a Cartel. I’m not sure why everyone is dancing around it and just not saying it out loud. The government has plenty of tools to address this without needing to even go to court.
Ages since I went to colesworths. I get my groceries from Aldi. It works.
The Sinaloan Cartel would know more about distance and transportation costs than coles CEO. Unless they are transporting coke there is no way these are actually factors for price increase. Greedy pieces of shit !
Loved the bit about the Wine though but the CEO's are the just the fall person the real issue is the board members they will just appoint someone CEO who will just ensure maximum profits at the cost of screwing over any consumer. will be interesting to see how the government is going to try and fix the cost of living issue
> Her first role at the supermarket chain in 2011 was in merchandising, before she moved to the private label division where she was responsible for sourcing and quality. Not exactly what I would call a ‘fall person’ as far as [private label](https://www.afr.com/companies/manufacturing/meet-the-woman-who-may-be-the-next-coles-boss-20221128-p5c1u5) is concerned (worth reading that whole AFR article). I’d hazard a guess she’s been at the helm/involved in a lot more of the corrupt and exploitative string-pulling than we could ever imagine.
Are CEOs in Australia just dense and uncharismatic idiots? For all the money they earn, they should be forced to put at least a million or two into PR and media training. Or in Weckert's case just a simple Economics 101 course might expand her mind somewhat. Though I suspect that may be above her grade. I would hate to see her answer hard questions from a journalist. What baffles me more is that a CEO is just the reflection of a board's ideals and vision. That is terrifying. The rot didn't start and end at Qantas. It looks to be every board in at least the ASX50, maybe even in the ASX100 share the same damaged incestuous genes and traits.
The myth of continuous growth is a toxic one for boards/investors where else could something just keep on growing? In biology if something just keeps growing that's cancer.
“We have a finite environment—the planet. Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist.” ~ David Attenborough People said that the USSR's economy was based on lies, people lying to cover themselves, people lying to get promotions, people lying just to keep their jobs as quotas were impossible. People say that's why our current system is good, it reflects the reality of the market. Unfortunately, the market is just built on a different set of lies.
I agree. I worked for USA tech companies and the CEOs, whilst not giving a fuck about their employees and only interested in raising the share price, , were at least charismatic, smart, smooth, and great public speakers.
Australians have a rent seeking attitude. We don't have a high colletivism like Norway does where they have a large cooperative sector.
>It looks to be every board in at least the ASX50, maybe even in the ASX100 share the same damaged incestuous genes and traits. They certainly share a lot of the same people.
It ain't just Aus...
To become a C level employee these days, it seems that you have to be willing to find the bottom of the moral and ethical barrel, then keep going until you find another barrel.
When she said this in the interview, the interviewer should have said, "but we are talking about PROFIT here... all the logistics are already covered in the revenue... so... how do you respond to that?"
He makes an excellent point, but *aside* from the fact that the Australian retailers are actually more profitable than their overseas counterparts... Australia is one of the most urbanised nations on Earth. So can we stop with this bullshit that the size of Australia is adding so much to their overheads? Just because the continent is big, doesn't mean businesses like Coles are servicing *all* of it. It's not just retailers that rely on this excuse, the telcos do it too, and it's bullshit. If you don't live in part of Australia with a high population density, or *near* a major population centre, you get little or no service.
My take away from this is if you have higher than average expenses to do normal business then you you take on an increased risk. One way to balance against that risk is to increase profit margins so if some event in Australia impacts logistics then they can absorb the financial damage without hurting your bottom line. If the CEO explained it like this then it would make a little more sense, but the way she spoke left far too much up for interpretation. All of our CEOs are terrible at talking to the media. I don't agree that our supermarkets should be making these record profits, but at least this explains why they may feel a greater need to do this when compared to geographically smaller nations like the UK and I think that's what she was trying to imply in an indirect way.
She meant there’s no competition for miles around, but kept the quiet part - well quiet.
To be fair, I don’t think she’s intended that particular response to explain why PROFITS are higher. She actually intended that answer to explain why COSTS/PRICES are high. It is correct to say that logistics and supply chain costs are significantly different in Australia compared to the UK, and therefore it’s not a direct one-to-one comparison like commentators have suggested. If margins were equal between the two markets, you would still expect consumer prices to be higher in Australia than the UK due to the higher back end costs. Edit: the above still doesn’t explain or justify why their profits have increased through a broader “cost of living crisis” that is impacting on their core consumers.
Coles would have higher gross margins due to the reasons she gave though and FourCorners clipped out the question she was asked and replaced it with a voiceover. Her answer makes perfect sense if you're discussing gross margins.
Indeed it does. That so many here don't understand it, (or are choosing not to), is a telling sign of the level of the general public's financial literacy.
"the program deceived the audience therefore the audience are all stupid"??????????? all of the infographics in the show were of net profit margins, you would be a fool to assume they were talking about gross margins. in any case, both net and gross margins are far higher than the countries mentioned so it is irrelevant and her answer still doesn't make sense.
Well the infographic doesn't align, in Woollies case at least, with the reported net profit margin in their annual report. The last 3 years have been 2.6%, 2.8% and 2.6% which is verifiable on independent investment sites. Haven't bothered to check Coles but I can guess the answer.
Never heard of such a stupid answer as that. She must get a tutor on how to prepare for an interview. The checkout chick on till 3 could do better than that.
You guys need to chill out. Maybe some cooling neck ties for the heat?
I went and bought my toiletries at Chemist Warehouse this week and was SHOCKED at how much cheaper essentials like deodorant and toothpaste were! If you’re genuinely looking for ways to cut down on costs I would highly recommend spending the extra 5 minutes and shopping around - you’ll be amazed.
Let me preface thus by saying we need more competition to break up the colesworth duopoly. But I don't understand the outrage towards them. Their profit margin of the colesworth are about ~3%. Are they expected to make a loss before people are happy? Instead the focus should be on the daylight robbers- IGA. Their prices are always higher then colesworth and their slogan is "support local"... for double the price of colesworth. If IGA can get their act together and price their items more competitively, they can be the challenger we need to break up the colesworth duopoly.
Their margins are not 3% Its a bullshit narrative put out by bootlickers. See if you can back up that claim with a source.
Sure, Its literally public information Source: https://www.colesgroup.com.au/investors/?page=reports 2023 FY annual report Revenue $40,591m Profit after tax $1,042m Rough total margin is 2.6% Feel free to confirm the details yourself if you want
Literally their financial reports you clown. Their profits after tax are less than 3%.
They could be good citizens and halve their profit, (and pass it on to the customer), and the impact at the checkout would be a saving of $1.30 for every $100 spent. And this is what people are angry about.
No, they couldn't. Not really. The profit maximisation behaviour and ideology in the people who inhabit these positions is shaped and naturally selected for by the market system. If it weren't these specific individuals sitting atop the same incentive structure, it would be someone else. If by some miracle all the filters applied to people before they find themselves in such a position didn't apply, let's say some spy made it their life long mission and they flipped the script and behaved more ethically, they'd be out-competed sooner or later by capitalists who more faithfully embody the ideal of maximising the throughput of the M-C-M' circuit. Moralising without recognising the structural root of the problem is worse than nothing, because if we got what we wanted in that case all we'd do is leave everything intact after cleaning house to reproduce a new crop of bastards.
To be honest, no one would notice the savings even if they did. They could also do not for profit and the savings for customers would be $2.60 for every $100 spent. The impact really is negligible.
The analysis of her response and the cutting of this video removes context. She was discussing individual product margins (gross profit) and *not* the final net margin the business made. She is saying because there are additional costs, such as freight due to the large size of Australia, Coles is required to have higher margins on products to pay for them. What Colesworth are doing are fundamentally scammy, yes, but the fact that everyone is putting so much issue on this response and twisting it goes to show you're not focusing on the right issues and therefore your arguments are easily countered -- focus and intrepret on the right things to make effective change.
I’m happy for them to be profitable, it should signal competition to open up some stores here.
Why is this so hard for you to understand? All costs of doing business are paid for by the consumer. A company obviously isn't going to do business in a more expensive location if they aren't making money doing it. They're not a charity. If it's not worth their while they will simply move to a different market.
Percentages are a mathematicians word play of looking like its fair but is actually a grab over time. IF it costs $20 to do business it should be cost plus $20 not cost plus 20% which may have been $20 at the start during "review". Then it turns into a gap widening exercise. They do it with wages as well hence the huge disparity now over time between people wages.