Woolworths bosses have conceded they underestimated how much budget grocer ALDI would disrupt its business and admitted its response to the aggressive German had been “lackadaisical”.
Speaking at Woolies’ AGM yesterday, its CEO, Brad Banducci, admitted that Woolworths had been too slow to react to ALDI’s heavily discounted range by promoting its own Homebrand range.
Banducci was reportedly grilled by shareholders regarding its strategy to counter ALDI and its “confusing” loyalty scheme. Shareholders were also none to happy about the failed hardware venture Masters and the worrying signs emanating out of the struggling Big W business.
When it came to ALDI, Banducci, whose comments were reported on Fairfax Media, said: “We didn’t treat ALDI with the respect they deserved.
“The truth is, if we would like to succeed against ALDI we need to differentiate ourselves and that’s why we’re obsessively focused on having the best range in store and the best team.”
The other big issue for Woolies are reports that Amazon is set to enter the Australian grocery market with reports it will open stores and play in the discount grocery market.
Woolworths apparently plans to counter current and new competitors with a renewed focus on its loyalty programs. However, at yesterday’s AGM shareholders reportedly fumed over a recent decision to cut ties with Qantas and its Frequent Flyer program.
Woolies chairman Gordon Cairns said of the problems surrounding its loyalty programs: “We are not perfect, if you think we will never make a mistake again you will be disappointed. We will continue to make mistakes because we will continue to try things … we are humble enough to admit when we’re wrong.”