‘Destroyed capital’: Investor calls for Woolworths to ditch Big W and New Zealand operations

Woolworths has been encouraged to ditch Big W and separate from New Zealand operations as investors claim the two are contributing to profit losses. The Australian Financial Review reports First Sentier Investors portfolio manager Dushko Bajic spoke at a Sydney forum this week, where he said he’d proposed the move to Woolworths CEO Amanda Bardwell. Mr Bajic, whose firm has invested in Woolworths, reportedly told Ms Bardwell “we would just love you to be a simple Australian supermarket”, and claimed Woolworths profits should be higher than Coles. “Reinvest back into your business, your prices, and make the most of your superior supermarket locations (this) won’t be able to be matched by your competitor,” Mr Bajic said. But a Woolworths Group spokesperson said there were no plans to sell Big W or the New Zealand Supermarkets Business. “New Zealand Food and BIG W had a challenging year impacted by value-conscious customers cross-shopping and trading down but both businesses made good progress on their transformation plans with improved Customer scores and item growth in Q4,” the spokesperson said. He also claimed Big W has “destroyed capital”. Blackwattle Investment Partners portfolio manager Ray David also said Woolworths should be performing better than Coles. “We are advocates of simpler leaner business, as sometimes the essence of strategy is choosing what not to do, and we would welcome any strategy that simplifies the business that brings a greater focus on the core,” Mr David told the AFR. Woolworths has undergone a dramatic drop in profit, bringing in $108m as of August 28 according to Sky News. This is a 93 per cent decrease from last year, and comes amid $1.5bn in losses as a result of the company’s New Zealand division.