Investor’s bombshell Big W call

Woolworths has been encouraged to ditch Big W and abstracted from New Zealand operations arsenic investors assertion the 2 are contributing to nett losses.

The Australian Financial Review reports First Sentier Investors portfolio manager Dushko Bajic spoke astatine a Sydney forum this week, wherever helium said he’d projected the determination to Woolworths CEO Amanda Bardwell.

Mr Bajic, whose steadfast has invested successful Woolworths, reportedly told Ms Bardwell “we would conscionable emotion you to beryllium a elemental Australian supermarket”, and claimed Woolworths profits should beryllium higher than Coles, who dissimilar the Woolworths bash not person retail stores.

“Reinvest backmost into your business, your prices, and marque the astir of your superior supermarket locations (this) won’t beryllium capable to beryllium matched by your competitor,” Mr Bajic said.

But a Woolworths Group spokesperson said determination were nary plans to merchantability Big W oregon the New Zealand Supermarkets Business.

“New Zealand Food and BIG W had a challenging twelvemonth impacted by value-conscious customers cross-shopping and trading down but some businesses made bully advancement connected their translation plans with improved Customer scores and point maturation successful Q4,” the spokesperson said.

He besides claimed Big W has “destroyed capital”.

Blackwattle Investment Partners portfolio manager Ray David besides said Woolworths should beryllium performing amended than Coles.

“We are advocates of simpler leaner business, arsenic sometimes the essence of strategy is choosing what not to do, and we would invited immoderate strategy that simplifies the concern that brings a greater absorption connected the core,” Mr David told the AFR.

Woolworths has undergone a melodramatic driblet successful profit, bringing successful $108m arsenic of August 28 according to Sky News.

This is simply a 93 per cent alteration from past year, and comes amid $1.5bn successful losses arsenic a effect of the company’s New Zealand division.