Retailing behemoth Woolworths is one of the biggest commercial advertisers in Australia, so it shouldn’t come as a surprise that they don’t get done over too often in the major newspapers, especially with former CEO Roger Corbett sitting on the Fairfax board.
However, I’m more happy to provide some alternative views to the universal gushing that accompanied yesterday’s 26% jump in annual profit to a record $1.63 billion. Woolworths are a disgrace at so many levels it is difficult to know where to start.
First up, Australia’s biggest poker machine operator continues to mercilessly exploit problem gamblers without batting an eye-lid. Let’s hope they listened to this extraordinarily combative speech that No Pokies senator Nick Xenophon delivered to the pokies industry annual conference last Sunday.
Profits from the hotels division soared 17% but the company won’t even admit that it has more than 11,000 poker machines and the three paragraphs in the results on corporate social responsibility make no mention of problem gamblers losing hundreds of millions playing with this most dangerous product.
Then you have the question of Woolworths brutally refusing to stock branded goods, forcing suppliers to sell through the company’s own house or “select” brand. This tactic is squashing Australian product innovation.
And what about the way Woolworths screws suppliers on payment terms?
It has become the most notorious middle man in Australia and nothing better demonstrates its market power than these two figures on the Woolworths balance sheet:
Inventories: $3.01 billion
Trade and other payables: $4.8 billion
Woolworths has become a virtual supermarket with negative stock of more than $1 billion as it forces suppliers to wait ever-longer for payment, long after the goods have actually been bought by Australian shoppers.
As was outlined to Deborah Cameron on ABC Sydney yesterday, the sheer brutality of Woolworths partly explains why the likes of Japanese brewing giant Kirin are being forced to bulk up and become giants in the dairy industry. They need scale to stand up to Woolworths.
Finally, there’s the Woolies push to launch a company credit card. Surely Australians don’t need any more access to credit?
Not content with being the biggest pokies, fags and grog pusher in the country, Woolies now wants its customers to spend more so they can profit on the debt repayments.
According to Reserve Bank figures, Australians have 14.24 million credit card accounts, owing a record $44.7 billion, for an average of around $3,140 in each account.
Woolies is chasing one million cards over the next five years, suggesting it wants its customers to chalk up more than $3 billion in debt.
Sometimes you have to wonder why it is necessary. Roger Corbett is a member of the Reserve Bank board, and should be best placed to realise that we don’t want more personal debt.
But then he did make his company the biggest pub and pokie machine operator in the country, so sin and debt are of little concern to him.
*Listen to colourful pokies billionaire and Woolies partner Bruce Mathieson call Stephen Mayne a liar on 3AW in 1997.