How Woolworths and Coles joined forces to avert COVID-19 catastrophe


The picturesque gardens of a decommissioned psychiatric facility turned out to be the right place to plan for the top of the world.

It was right here within the first week of March the place Coles chief government Steven Cain and his government crew gathered for a long-planned government retreat within the distant Victorian city of Beechworth. They have been there to arrange for the 12 months forward and have a good time steering the $21 billion grocery store big by way of the worst bushfire season in Australian historical past. Little did they know on the time, however Coles, its rival Woolworths and the remainder of the Australian grocery store sector would quickly be consumed by a good larger disaster.

Toilet paper became a precious commodity as panic buying swept supermarkets in March.

Bathroom paper grew to become a valuable commodity as panic shopping for swept supermarkets in March.Credit score:AAP

COVID-19 was not but a worldwide pandemic, and nonetheless largely centred in China. There have been solely a handful of energetic instances in Australia, however fears in regards to the coronavirus have been constructing and holes have been showing on grocery store cabinets as consumers began to hoard bathroom paper and hand sanitiser.

By the top of the Coles retreat, panic shopping for had turn out to be frenzied. “About midway by way of this convention, I realised I used to be spending extra time outdoors on the telephone than inside specializing in the technique session,” Cain says. “By the top of that week, we have been just about full-on.”

It isn’t fairly often the Treasurer telephones you within the first occasion, and it is actually not fairly often he asks you about bathroom paper

Woolworths CEO Brad Banducci

In a world turned on its head by the lethal COVID-19 pandemic, the response from Australia’s supermarkets was nothing wanting extraordinary. It included every day telephone calls between the nation’s high grocery executives; and wartime-esque catastrophe planning involving senior cupboard ministers which almost noticed hundreds of thousands of Australians put onto home-delivered rations.

Rivalries and variations have been put aside in an unprecedented interval of co-operation, with the executives devoted solely to preserving clients fed. Disasters have been averted, shortages of key items have been minimised and the nation’s most weak have been protected.

By any measure, the supermarkets pulled off what appeared at instances like an unattainable process.

The sector mobilises

As Coles’ government retreat acquired underway and as panic shopping for was intensifying, Cain’s counterpart at Woolworths Brad Banducci acquired an surprising name from Treasurer Josh Frydenberg.

“He phoned me and requested, ‘what is going on on with bathroom paper gross sales’?” Banducci says. “It isn’t fairly often the Treasurer telephones you within the first occasion, and it is actually not fairly often he asks you about bathroom paper.”

A whole lot of kilometres away within the quiet South Australian city of Millicent, Doug Cunningham’s was ringing for a unique motive. Because the native managing director of multinational shopper items firm Kimberly-Clark, Cunningham was liable for manufacturing 20 per cent of the nation’s valuable lavatory rolls, and he’d by no means been extra common.

Calls have been flowing in from retailers thick and quick, asking if they may ramp manufacturing up additional, and if he may have the ability to ship inventory by way of any faster. On a dime, the skilled government made numerous modifications, slicing non-essential product traces, altering pack sizes and ramping manufacturing to its most.

Kimberly-Clark MD Doug Cunningham. 11th June 2020 Photo Louise Kennerley SMH BUSINESS

Kimberly-Clark MD Doug Cunningham. 11th June 2020 Picture Louise Kennerley SMH BUSINESSCredit score:Louise Kennerley

“We did that inside hours, which is definitely unprecedented in our enterprise,” Cunningham says. “Usually it might take per week or so, however we simply did it right away.”

The businesses have been transferring quick however flying blind, with no chapters of their disaster handbooks on how one can cope with a worldwide pandemic. In that first week, each Cain and Banducci acquired a direct name from Prime Minister Scott Morrison, inquiring into how the supermarkets have been coping and asking if there was something the federal government might do in help.

In a follow-up name with Frydenberg, it was Cain who planted the seeds for what would turn out to be the Grocery store Taskforce, asking the Treasurer if it might be doable to determine a working physique to give attention to cross-industry collaboration.

Brad Banducci, chief executive of Woolworths.

Brad Banducci, chief government of Woolworths.Credit score:Joel Carrett

“He stated ‘no downside, we’ll type that out’, and true to his phrase he set one up the following day,” Cain says.

A sequence of unprecedented occasions

The Taskforce, headed up by House Affairs Minister Peter Dutton, was then granted authorisation by the competitors watchdog to coordinate and collaborate with out falling foul of competitors legislation.

Earlier than the virus hit, the Australian boss of low cost grocery store chain Aldi Tom Daunt had by no means met nor spoken to any of his shut opponents, regardless of six years within the function. However the usually taciturn government was profuse in his reward for the working group.

Whereas the Taskforce was strictly prohibited from discussing points reminiscent of product pricing, the group shared their plans and greatest practices throughout points like in-store cleansing and social distancing.

I by no means thought I would ever be on a name to anybody in authorities round how they may assist us cut back our gross sales. And I hope I am by no means in that place once more.

Coles chief government Steven Cain

This prevented conditions the place clients may prioritise one retailer over one other on account of one chain having shopping for limits when one other did not.

“There have been some actually sensible the explanation why we wanted to search out industry-wide settlement on these kinds of issues…and I believe the federal authorities did very nicely to recognise that,” Daunt says.

At one level, Woolworths directed its personal suppliers to unbiased wholesaler Metcash to assist provide distant Indigenous communities within the Northern Territory. Woolworths had no shops within the areas, however Banducci did not wish to let his provide traces go to waste.

“It was by no means about our gross sales, it was about Australia,” he says.

Coles chief executive Steven Cain.

Coles chief government Steven Cain.Credit score:Luis Enrique Ascui

For 3 weeks throughout the peak of the panic shopping for, Cain and Banducci convened in every day telephone calls at 5.00pm every evening, accompanied by their respective basic counsels to make sure no competitors legal guidelines have been damaged. Comparable, much less common calls additionally occurred with Daunt and Steve Marshall, Metcash’s chief government of supermarkets.

Within the third week of March, the 4 took out full-page ads in main newspapers in an try to quell the unrest amongst consumers, calling for calm and assuring clients provide would return quickly. There was a short second of confusion, Banducci remembers, when deciding the order through which the 4 corporations’ logos could be displayed on the advert.

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“After all, there was just one reply: alphabetically,” he laughs. “However that transfer set a extremely vital tonality that we have been all in it collectively. There wasn’t any point-scoring.”

As March grew to become April, the supermarkets’ high groups have been pulling 18-hour days, seven days per week. Panic shopping for had begun to barely subside, however the virus had not, with Australia’s every day new COVID-19 instances peaking at 460 on the 28th. It appeared to be getting uncontrolled.

That Saturday, Dutton posed a problem to the supermarkets: how might they supply meals to 2 million weak Australians in the event that they have been unable to depart the home? It was the federal government’s worst-case situation, and an unfathomable process for the businesses’ ill-suited on-line supply techniques.

“It was the mixture of a big weak inhabitants, a flu season about to hit, and lots of in isolation on account of danger of an infection,” Cain says. “You could possibly simply conjure up a situation the place hundreds of thousands have been at house and wanted servicing, and the capability within the on the time was considerably lower than that.”

Banducci instantly rang Christine Holgate, the chief government of Australia Publish, to find out what could possibly be completed. On Sunday, along with logistics enterprise DHL, the group organised an $80 field of necessities which the postal service would courier to homes in want. By Monday, the service was stay.

“Turned out we truly solely delivered about 80,000 of those containers, however we have been able to do no matter it took,” Banducci says.

Christine Holgate and Brad Banducci at the launch of the $80 basics box.

Christine Holgate and Brad Banducci on the launch of the $80 fundamentals field.Credit score:Peter Rae

A socially-distanced Easter got here and went, and in its wake, a restoration started. Pantries throughout the nation have been stocked and shopping for limits have been easing off, although the nation was nonetheless devouring some 16 million bathroom rolls per week.

For the executives, the aid could not come quickly sufficient. Provide chains have been totally spent, gnawed to the bone by the stable month of frantic shopping for. Even suppliers’ buffer shares, reserved for emergency instances, had been rolled on to the store flooring.

“There’s sufficient size and inventory in most provide chains to allow some fluctuation, however the demand surge we noticed was so steep and so dramatic, it stripped provide chains across the nation,” Daunt says.

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“I do not simply imply grocery store cabinets, I imply the inventory at the back of the shop, within the distribution centre, and on the manufacturing line. I do not suppose shoppers actually understood the true extent of it.”

On the finish of April, Coles and Woolworths revealed their third-quarter sales figures, a set of document numbers which confirmed gross sales within the month of March alone rose an enormous 30 per cent.

However for each Cain and Banducci, the unrivalled gross sales numbers have been no measure of success. Group belief and buyer satisfaction have been far higher KPIs for the 2 executives as they steered their corporations by way of a second in historical past.

“We speak rather a lot about objective, and we use all these tender phrases, however over the COVID interval Woolworths truly lived its objective,” Banducci says. “My metric of success throughout the course of the disaster was not gross sales or revenue, it was truly doing the fitting factor, rising with our repute enhanced, not tarnished.”

For Cain, navigating coronavirus was a difficult and rewarding expertise with “excellent” performances throughout Coles and the broader . However as gross sales return to regular and the strain subsides, he admits there have been some elements he’d desire to not repeat.

“I by no means thought I would ever be on a name to anybody in authorities round how they may assist us cut back our gross sales,” he laughs. “And I hope I am by no means in that place once more.”

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