23/09/2008 - 10:27

Woolies CEO calls for WA trading reform

23/09/2008 - 10:27


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Woolworths Ltd chief executive Michael Luscombe has joined his Coles rival in calling for the state government to deregulate trading hours in WA at a Perth function today.

Woolies CEO calls for WA trading reform

Woolworths Ltd chief executive Michael Luscombe has joined his Coles rival in calling for the state government to deregulate trading hours in WA at a Perth function today.

Mr Luscombe told a business breakfast that it was time for legislation to catch up and urged new Premier Colin Barnett and his ministry to do away with the antiquated shopping hours.

"...anomalies such as trading hours are a brake on the economy. It doesn't make sense to me to be accelerating and braking at the same time," Mr Luscombe said.

He added that liberalising trading hours would allow time-poor workers to shop when convenient, create a better impression with international visitors and save produce, which was thrown out on Sundays rather than sold.

Mr Luscombe joins Wesfarmers Ltd chief executive Richard Goyder in calling for the deregulation.

The Chamber of Commerce and Industry WA also urged the new government to stand up to various vested interest groups and do what's best for the state by delivering meaningful trading hours reform.

"In 2008 there is no need for Western Australian consumers to be told where and when they can shop. All other States and Territories have embraced trading hours reform, we should do the same," CCIWA chief executive James Pearson said.

Meanwhile Mr Luscombe said shoppers are responding to tougher financial times by being more cautious with their purchases but this has so far not dented the company's earnings.

The slowing Australian economy had not affected the supermarket giant's forecast of net profit growth between 11 and 14 per cent for 2008/09, Mr Luscombe said.

"Unless we see a significant change, we won't be altering that guidance," he said.

"We gave an update for July and the first two weeks of August, and based on that, we were able to say that we haven't seen any great impact on our sales.

"In fact, we had a good start to our financial year but one needs to be very careful not to extrapolate that across the whole year.

"So we remain cautious in our outlook and our guidance in terms of sales and profit for the year takes into account the uncertainty that we face in the marketplace."

Mr Luscombe said the company had noticed a surge in sales of its generally cheaper private brands, including Home Brand and Woolworths Select, as shoppers tried to cut their household grocery bills.

"The sense of looking for value has heightened in the past nine months," he said.

"Customers are doing their sums and recognising that they can have the same quality, if not better, and actually pay less.

"There are certainly sections of the community that are doing it very hard and it is incumbent upon all of us to make sure we don't let that part of our community fall through the cracks.

"There is no doubt that everybody is tightening the belt a little bit and that doesn't have to mean that people have stopped spending: I think they've become a little wiser in spending.

"That's why in the nine months since Christmas, we've really focused on delivering the best value that we can."

Mr Luscombe said the financial meltdown on Wall Street was still playing out.

"I don't think we're out of the woods yet globally.

"But there is no doubt that the action that has been taken by the other central banks around the world will help enormously."

Woolworths retained its dominant position in Australia's retail market and was not feeling pressure from its nearest rival, the Wesfarmers Ltd-owned Coles supermarket chain, Mr Luscombe said.

"Our reading is that we're still holding the lead.

"The last numbers showed us we were about 31 per cent of the food and grocery market and our nearest competitor was in the 20s."

Mr Luscombe said the diversified retail group, which owns Big W, Dick Smith, Tandy and BWS, would roll out about 20 Dan Murphy's liquor stores in WA in the next few years, up from two outlets presently.

He would not comment on speculation that Woolworths sought to acquire the Mitre 10 hardware chain.


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