After ‘chopping off all our limbs’, Brad Banducci is ready for a new Woolworths
By Dominic Powell
In the few quiet moments when he’s not feeding half of Australia, Brad Banducci has been doing yoga and listening to vinyl – often at the same time.
The usually composed executive turns animated when showing off his latest two acquisitions – the Okie and Troubadour albums by reclusive American guitarist J.J. Cale – purchased recently from a shop on Smith Street in Melbourne’s trendy suburb of Fitzroy. His daughters have just bought him Paul Simon’s Graceland too, which he plans to give a spin later that night.
Woolworths boss Brad Banducci has been thrust into the spotlight during the COVID-19 pandemic.Credit:Wolter Peeters
It’s a recently acquired and somewhat therapeutic passion for the head of Australia’s largest supermarket chain Woolworths, and not a surprising one given the turmoil of the last 18 months which has thrust Banducci into the national conversation and placed unprecedented scrutiny on the operations of a business many Australians take for granted.
From the early days of toilet paper shortages all the way through to the Delta-driven pressures of the past few months, Banducci has been fronting TV cameras, co-ordinating with competitors and fielding phone calls from the highest levels of government (including a concerned Josh Frydenberg worried about the toilet rolls). It’s a marked change of pace for an executive who shuns the spotlight when possible, and he reflects on his role over the past year with a token self-effacing tone.
“It’s not about any individual, it’s the organisation, the people, the culture and the purpose. I think the last 18 months has brought out the best in Woolworths,” he says. “Management teams come and go, but Woolworths will be here for a very long time, and I think this has really made for a better business.”
But the challenges for Banducci and Woolworths are far from over, with half the country in lockdown and the potent Delta strain wreaking havoc on local supply chains. Through this, the grocery giant itself is embarking on a new era of growth, having demerged its $10 billion Endeavour Drinks division and set its sights on a new online-focused and tech-laden ‘food and everyday needs ecosystem’ model.
It’s an ambitious reimagining of the 98-year-old company and one even Banducci himself admits he’s had reservations about at times, but it’s a move he believes must be made to keep the business thriving in the disruptive 21st century.
“We provide food and everyday essentials for households. Those are the two anchors and everything else is up for negotiation,” he says. “If you’re not careful you’ll end up just like a bank and get disintermediated on the way through…and generally that doesn’t go so well.”
From Boksburg to BCG
Banducci’s agreement to speak to The Age and The Sydney Morning Herald for this profile is a rare piece of introspection for the executive, who has never done a sit-down interview in his six years as Woolworths’ boss. “I’m much more comfortable talking about Woolies than myself,” he quips.
And even so, actually sitting down with Banducci was not possible due to the pandemic: our chat takes place over two separate Zoom calls, one from an Airbnb in Melbourne and the other from Banducci’s home in Sydney’s seaside suburb of Bondi.
He’s quick to explain his reasons for visiting Melbourne during the state’s sixth lockdown. One of his two daughters is recovering from an operation, and he decided to pay for and endure two weeks of “quarantine pain” in order to get down and see her. His return to NSW – by way of a nine-hour drive along the Hume Highway – was far less painful but far more “eerie”.
“There’s no one on the roads,” he says. “But I did see a lot of Woolworths trucks though, which made me feel positive.“
Banducci hails from the gold mining town of Boksburg, half an hour out of South Africa’s largest city Johannesburg. In his youth he worked alongside his father in the “sunsetting” industry of sewing machine sales, boasting that he was the number one salesman at South Africa’s annual Easter Show.
A degree in comms and law saw him go to London and then eventually to Australia on a bursary to study for an MBA, after which he became the first employee of the Boston Consulting Group in Australia. Following a stint in Chicago under the legendary Boston Consulting managing director and retail guru Michael Silverstein he came to New Zealand, where he had his first encounter with Woolworths, doing some consulting work with the supermarket. While in New Zealand, he fostered his love for retail, buying a bakery business and a vineyard, the latter of which he still owns today.
‘We were sort of like the Black Knight from Monty Python’s Holy Grail, chopping off all our limbs.’
Returning to Australia in 1999, Banducci eventually left BCG and became the second hire of payments fintech Tyro – a business that still counts the executive as a top-20 shareholder – sharing a desk with its founder, Jost Stollmann.
“What I got to do there was sit next to an entrepreneur and realise entrepreneurs see the world the way they want it to be, and the mental importance of thinking about the world the way you want it to be,” Banducci says.
“Jost saw us running a large fintech. I saw us sharing a desk.“
After running out of money (having poured it all into keeping Tyro afloat) Banducci went searching for supplementary income, returning to consulting where he helped private equity heavyweight James Carnegie and Archer Capital purchase wine distribution business Cellarmaster from Foster’s.
Brad Banducci in 2016 after taking the reins at Woolworths.Credit:Jessica Hromas
Carnegie says Archer was looking for someone with both “intellectual horsepower” and an understanding of tech-led disruption, qualities Banducci displayed to the point where following the deal’s completion, Carnegie asked him to stick around.
“We were so impressed with Brad during the due diligence that I basically said, ‘how about you come and join us’? That wasn’t, I think, what he expected, but in the end, we were able to convince him to become the CEO.”
“Some people may find it hard to transition from being a consultant to being an operator, but Brad blossomed as an operator. For many years I dreamt of trying to find a deal that I could slot him back into, but I think he might have gone a bit beyond that now,” Carnegie laughs.
Four years later, Cellarmasters was bought by Woolworths in a $340 million deal, and despite Banducci’s own suggestions he be made redundant, Woolworths kept him on as managing director. Four years after that, in 2015 Banducci was appointed chief executive of the whole company.
Since then, Banducci has overseen a boom time for Woolworths, more than doubling the company’s share price, growing its food business by $10 billion and clawing back market share from Coles. This has come with his fair share of faults too, most notably the business’ $390 million wage underpayment scandal, and the complete governance failure of the now-axed Darwin Dan Murphy’s store.
Throughout his varied and diverse career, Banducci comes back to the concept of ‘sliding doors’ frequently, pointing out that many of the twists and turns which brought him to the head of one of the country’s largest retailers were fortuitous or coincidental.
“The accidental CEO has been my life path,” he says. “But I do believe in sliding doors and I believe in culture. There has to be a purpose when you work, and there’s got to be more to a job than just what you do.”
‘Chopping off all our limbs’
Banducci took the reins of Woolworths during a troubled period for the retailer, with the business’ share price in the doldrums and its supermarkets division losing ground to arch-rival Coles. The company’s board was fractured and its key divisions were bleeding money – most notably its doomed hardware arm, Masters.
Shortly after his appointment, Woolworths announced it would exit Masters after weathering billions in losses at the chain. This was followed by the sale of the company’s fuel business to EG Group in 2018 and then in 2019, the announcement of the sale of its drinks and hotels arm Endeavour, a $10 billion business and Banducci’s original stomping ground.
The Endeavour sale was a bittersweet moment for the leader, which he likens to a child growing up and leaving the nest. But its demerger cuts to the heart of a broader concern held by Banducci: was Woolworths becoming the great shrinking retailer?
“There’s always been a bit of fear at Woolies, or maybe a little bit of anxiety, that we were going to shrink to greatness,” he says. “We were sort of like the Black Knight from Monty Python’s Holy Grail, chopping off all our limbs.”
“But we realised if we just rethink what we do, actually there’s enormous growth for Woolworths. When we talk about our ecosystem, it’s not doing anything radically new, it’s just redefining what we do today.”
“At BCG, Michael Silverstein used to say ’if you think you’re ex-growth, you haven’t defined your market correctly.”
Woolworths chief executive Brad Banducci and chairman Gordon Cairns.Credit:Dallas Kilponen
Banducci is now slowly piecing together his vision of the ‘new’ Woolworths, investing half a billion dollars in food services company PFD and hiking the business’ stake in data analytics firm Quantium. He’s also drawn on some of his entrepreneurial history, establishing a venture capital arm at the grocer and making a number of investments in retail-adjacent startups. Currently, he’s interested in on-demand food delivery, hinting that the supermarket could make a move there in the future.
“If you want to stay relevant in Australia, you have to participate broadly, you can’t just do one narrow thing,” he says.
‘The accidental CEO has been my life path. But I do believe in sliding doors and I believe in culture. There has to be a purpose when you work, and there’s got to be more to a job than just what you do.’
Banducci’s approach has won him plenty of fans among those who have worked alongside him, with colleagues and friends praising his capability, leadership and personable nature. Woolworths’ chairman, Gordon Cairns, is profuse in his praise for the chief executive.
“Brad’s totally transformed the business. If you look at Woolworths now and then look at it five years ago, they’re radically different. And that’s because of Brad,” Cairns says. “When we discovered that we’d underpaid our salaried staff, Brad immediately offered to give up his bonus. He spontaneously said ‘I’m accountable, I’m going to give it up’.”
“When you’re a values-driven organisation, it’s easy to write that on pieces of paper or whatever, but you always get tested. And it’s when you get tested you see the true hallmarks of a leader.”
Even Roger Corbett, Woolworths’ former chief who has reportedly disagreed with Banducci’s management style in the past, says he appears to be doing a good job. “Clearly, during his reign, the share price has been very high, so obviously, the markets view him very highly. The share price has done very well, and I think he deserves credit for that.”
Others who know the CEO say he matches his personable profile with fierce competitiveness, pointing to Woolworths’ market-leading position as an indication of Banducci’s drive to win.
Banducci says competition – especially with rival Coles – makes his job exciting, but notes he likes to remind himself that it should be for the sake of the customer, rather than any corporate point-scoring.
This applies to Woolworths’ recent sustainability push too, he says, with shareholders recently quizzing the executive if his business would be able to beat Coles in the race to become Australia’s most sustainable supermarket.
“My answer was: I don’t know if we can, and I don’t care if we do. Because I think it’s just good for Australia to have two of the leading retailers in the country trying to create a better tomorrow,” he says. “I mean, I’d like to think we get our nose ahead, but actually, that’s not the point.”
“The good thing about having radical daughters in their 20s is that they’re into it. They’ve been challenging me on packaging and food waste since they were 16.”
A dangerous moment
Amid his weeks of store visits, board meetings, yoga sessions and strategising, the Woolworths boss’ current focus is preparing his company for the Christmas period and navigating the persistent challenges of COVID-19. This year, he says, is harder than last, with a lot of the novelty of lockdowns wearing thin on consumers.
“The pressure is just as intense in the supply chain [this year] for ourselves and our competitors, and it’s not as obvious to consumers that that’s the case. If you listen to consumers everyone’s just frustrated, and the excitement of being at home and it being a bit of an adventure has long worn off,” he says.
“Consumers are a little more tired, our team are more tired and there’s still a lot of pressure, and I think that makes for a dangerous moment.”
But with vaccination rates steadily improving Banducci is cautiously optimistic (a favourite term of his) about November and December through to the rest of next year and beyond to 2024, when the company will celebrate its 100-year anniversary. He’s already thinking about how he wants Woolworths to look when it hits this milestone.
“There’s no one big thing that makes a great retailer, there’s 100 small things. But we do want to be seen as this company that cares, that you can trust, that’s very eco-friendly, very inclusionary and a very contemporary business.”
“We’re in our 98th year now, and we want to get to the ton being vibrant and energetic, and focus on the world we live in, not the world we’ve come from.”
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