Woolworths is making headlines today for strong December quarter sales growth, resulting in a 16 per cent lift to $22.1 billion for the first half, and appointing ex-RBA governor Ian Macfarlane as a director.

But generally overlooked is that Macfarlane’s first board appointment since leaving the bank is only the latest in what is now an extraordinarily close relationship between the RBA and Woolworths, an indication of just how closely our central bank is to the major retailer.

The fishwrappers of course mention the immediate past-CEO of Woolworths, Roger Corbett, sitting on the RBA board, but they overlook the role of long-term RBA deputy governor John Philips, who became Woolies’ deputy chairman. There was also the little matter of Woolworths’ saviour, Paul Simons, who was sounded out for a RBA board seat but declined the offer.

The RBA likes to have a retail representative on board – that’s how Coles’ Brian Quinn had a ticket to the first Tuesday luncheons until his fall from grace and imprisonment. Shopping centre developer Frank Lowy doesn’t quite fit the bill but also brings to the table a close appreciation of what the consumer might be up to.

The closeness of the RBA and Woolworths relationship might leave one wondering if the retailer picks up just a little help from such close knowledge of monetary policy and the likely direction of interest rate movements. If John Fletcher wasn’t so busy trying to meet his promises at Coles, he might ask for an RBA position just in the interest of fair play.

Meanwhile, tucked away in this morning’s sales figures is a little snapshot of what the Australian petrol retail industry has become.

Woolworths’ petrol sales for the half rose 13.8 per cent to $2.5 billion. The company opened another five stations in the period, taking total sites to 495. Yes, that is big.

Taking out the new sites, comparable sales for the half were up by 7.8 per cent in dollars but only 3.6 per cent in volume. The fun was in the December quarter though when dollar sales were up by 4.5 per cent while volume grew 6.8 per cent.

Looks like the 10-cent discount offer did attract punters but prices didn’t suffer too much.

Peter Fray

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