NEWS - Brad Banducci: Dan's needs to innovate to keep up

Woolworths CEO Brad Banducci has said that Dan Murphy’s needs to reposition the business and innovate in order to keep up with consumer needs, which are changing very quickly.

Banducci made his comments during the Woolworths results presentation for the first half of FY19, which showed a disappointing result for Endeavour Drinks Group (EDG), with a small sales increase and a fall in earnings before interest and tax (EBIT).

“EDG’s result was below expectations, with sales increasing by 1.8 per cent and EBITS decreasing by 6.4 per cent in the half,” Banducci said.

“Steve Donahue has assumed the role of interim Managing Director of Dan Murphy’s and will continue to work with the Dan Murphy’s team to position the for the next horizon of growth. We have clear plans in place focused on localising range, rebuilding the Discovery experience and being digitally-led.”

Banducci said that innovation and improving the delivery of digital products would be key, with Dan Murphy’s looking at the success BWS has had in this area.

“The real issue in the drinks business is the consumer is changing very quickly and we need to innovate our business to keep up with their changing needs.

“The key forms of innovation for our customers are continuing fragmentation of categories and consumer moves to lighter styles and accessibility is key. Then critically important in this category, perhaps even more important than food, is the whole topic of convenience and people wanting it now.”

He added: “BWS has really led the charge for us here, with over 500 BWS’ now with on-demand home delivery. Jimmy Brings has been important for us and shown us what is possible.”

Banducci also gave his outlook for the remainder of the financial year and the challenges that the Endeavour Drinks Group will face.

“We expect the more subdued consumer sentiment to continue through the half, however it would be fair to say that trading to date in the second half has improved on Q2, primarily due to the more settled weather we’ve experienced in most of Australia.”

Overall the Woolworths Group delivered sales of $30.6bn, up 2.3 per cent for the first half, as well as EBIT of $1.4bn, up one per cent and an overall net profit of $979m, also up one per cent on the previous year.