The sense of crisis swirling around iconic Australian supermarket chain Woolworths Ltd erupted into the open on Wednesday as the retailer slashed its profit forecast and said its chief executive would step down.
The country’s biggest supermarket operator also said 1,200 jobs would go as it headed for its first annual profit drop in at least 19 years amid tough competition and falling market share.
Investors welcomed the surprise departure of under-pressure Chief Executive Grant O’Brien, who said he would retire after less than four years in the job. Woolworths shares jumped almost 3 per cent, outperforming the broader market.
"The recent performance has been disappointing and below expectations. I believe it is in the best interests of the company for new leadership to see (growth) plans to fruition," O’Brien said in a statement.
Woolworths said it had launched a global search to replace O’Brien, who would remain in the role until a successor was appointed.
O’Brien faced intense scrutiny after the Australian supermarket giant ceded market share to arch-rival Coles, owned by Wesfarmers Ltd, and cut-price newcomers like Germany’s Aldi, leading to its first quarterly sales decline in more than 20 years in the third quarter.