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Woolworths on cash woes and Coles changing dockets: 5 things you missed from supermarket grilling

Cash access at tills, shrinkflation and which CEO uses their staff discount card were discussed in the Senate supermarket inquiry.

Woolworths and Coles are two of the most recognisable brands in Australia and their respective chief executives were forced into the limelight to answer to allegations shoppers and suppliers have been taken advantage of. One, under threat of jail.

Brad Banducci and Leah Weckert spent hours defending their pricing practices, dealings with Aussie growers and market dominance in the $133 billion supermarket industry during Tuesday's Senate inquiry. The fiery back and forth between Banducci and inquiry chair senator Nick McKim wasn’t the only thing worth paying attention to.

But in case you missed them among the contempt drama - and questions of "what is the return on equity?" - Yahoo Finance has summarised a few other issues, like cash access, a plan to move to digital invoices and a surprising staff discount disclosure.

Coles and Woolworths CEOs have denied they are ripping off Aussie customers and suppliers but also touched on some interesting topics, like cash access and staff discounts in the Senate inquiry.
Coles and Woolworths CEOs have denied they are ripping off Aussie customers and suppliers but also touched on some interesting topics, like cash access and staff discounts in the Senate inquiry. (Yahoo Finance Australia)

Cash struggle in some supermarkets

Staff at Coles were warned they may need to convert to “card only” and restrict customer withdrawals over the Easter long weekend as cash transportation business Armaguard was navigating the threat of insolvency.

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Armaguard was bailed out, but the issue prompted concerns about how resilient the supermarkets would be in the face of cash shortages.

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She claimed the links were “overplayed” and that the leaked memo was due to a “change in deliveries”.

Weckert reiterated Coles commitment to ensuring shoppers can access and use cash in store.

“We are very cognisant, in regional areas, but also in stores which would have a higher proportion of customers that would be on lower incomes, that cash is critical to those cohorts. We are very committed to ensuring the ability to do cash transactions in our stores,” she said.

Banducci dismissed Armaguard as an issue when asked about cash access at Woolworths stores across the country.

He admitted there was a “balancing issue” to ensure there was enough cash in checkouts.

“We are very sensitive to the issue because often our regional stores can be more cash-reliant than some of our city stores. It is an ongoing area of focus for us,” he said.

Is this goodbye to the paper docket?

In a line of questioning about the collection of customer data, Weckert was asked if there were plans to change the way dockets were given out to help customers “look at the value they’re getting when shopping with Coles”.

The answer was yes to digital invoices, but no to downloadable CSV files of everything a shopper had bought.

“That is on our roadmap to deliver that so that will be available to customers imminently,” she said.

This would bring Coles into line with others, like Bunnings and Woolworths, which offer digital receipts.

How much did the CEOs and supermarkets make last year?

How much growers or suppliers were being paid, along with how much customers were forking out for essentials was a big part of the inquiry.

But there were some interesting nuggets about how much the supermarkets and their bosses made.

Woolworths 2023 profit: $1.7 billion

Banducci pay: $2.6 million in base salary, total compensation near $8.4 million

Coles 2023 profit: Just over $1 billion

Weckert pay: Base salary of $.12 million, total compensation $3.3 million

It’s hard to think about those earning more than $1 million doing their grocery shopping, but both were asked if they used their staff discounts.

Banducci said no, but Weckert said she did.

Shrinkflation: Shouldn’t supermarkets be clear?

The Coles CEO copped a few heated questions about shrinkflation and whether the supermarket had a responsibility to tell shoppers when it was happening.

"You'd be aware sometimes the size of a product can decrease by less than 10 per cent and the packaging can remain the same size, even though the weight of the product has decreased," McKim said.

"There are times when it’s between difficult and impossible for your customers to know the size of a product has decreased, but you don’t seem to value them to the extent you want to pass that on?"

Weckert said it was not noted in-store as it rarely happened and claimed customers were "smart and savvy" enough to work it out for themselves.

"If they buy the product regularly, they are going to take note of that,” she said.

Shrinkflation evident in a Ritzcrackers 3-pack which reduced in size by close to 25 per cent.
Shrinkflation evident in a Ritzcrackers 3-pack which reduced in size by close to 25 per cent. (Sarah Megginson)

In some cases yes, there's plenty of social media backlash over shrinkflation online. But McKim said valued customers shouldn't have to take that on.

Unit-pricing, which assists customers in determining the value between product sizes by using a universal weight like 100 grams, was offered as a helper, but McKim said it was too small and something clearer should be noted in store about product changes.

Coles and Woolworths think supermarket sector is competitive

In short, the Coles and Woolworths duopoly represents about 65 per cent of the $133 billion supermarket sector in Australia.

This means many shoppers have little choice but to shop at one of the two major players, and experts have claimed this lack of competition means they have no reason to push down prices.

But when asked about their view of the matter, both CEOs were quick to point at the little guys, well littler.

They said Australian shoppers had the option to take their business to Aldi, Costco, IGA, Bunnings, Chemist Warehouse and even digital giant Amazon.

"Australians have never had more choice, and this is a good thing," Banducci said.

A part of the investigation into market dominance is the concept of land banking, which essentially stops competitors popping up by buying land and not doing anything with it.

Banducci said all land purchases were for developments, be it stores or distribution centres, and denied buying up IGA locations.

Weckert said Coles primarily leases and that their expansion had been “modest” in comparison to other competitors.

Woolworths have denied land banking, claiming all sites purchased are for development of stores or distribution centres.
Woolworths have denied land banking, claiming all sites purchased are for development of stores or distribution centres. (Woolworths)

Banducci said there was “a lot of work ahead” to lower prices for struggling Aussie shoppers, noting there would be better promotion of cheaper products and unit pricing in stores from July.

“You will see us doing much more on things like that. Clearly, we need to do a better job of also calling out our everyday low prices, which gives certainty on essential items," he said.

“It is starting to come through, but we’ve got a lot of work ahead of us, and we need to focus on it.”

Weckert said working to ensure suppliers get paid well had “flowed on to higher prices for customers” and admitted Coles needed to do better to signal price increases.

“If you think across our 850 stores, every store has 20,000 products in it with a ticket on it, and have we necessarily kept up with every ticket change that has resulted from those cost price increases? Probably not.

“There are plenty of examples on social media where people have called that out.

“There is no bad intent there, but we definitely could execute against it better, and we are working towards holding ourselves to a higher level of account on that.”