🦘 Woolworths Prioritising Customers Over Profits, Lendlease Chairman Exits, Aussies Aren’t Going To Spend Their Tax Cut Savings

G’day everyone!

Here’s what we’ve got in store for you today:

• Woolworths Prioritising Customers Over Profits

• Lendlease Chairman Exits

• Aussies Aren’t Going To Spend Their Tax Cut Savings

Let’s have a look at the market snapshot before jumping into the news:

Woolies Prioritizes Shoppers Over Profits Amidst Price Gouging Inquiry

In the heated lanes of Australia’s grocery aisles, Woolworths CEO Brad Banducci is making a bold pledge to prioritize shopper value over chasing hefty profits.

This declaration surfaced during a state inquiry into grocery prices as the supermarket giant faces scrutiny over their $1.62 billion profit in 2023.

Banducci illustrated Woolworths' commitment by pointing to recent price cuts, including a notable reduction in meat prices during last year’s festive season.

Woolworths, which is trudging through a low-margin sector, emphasized achieving a delicate balance among stakeholders — suppliers, employees, customers, and shareholders.

The company, which earned roughly 3.6 cents per dollar in revenue, contends this balance isn't always perfect but remains dedicated to keeping customer costs reasonable.

Banducci also spotlighted a welcome trend: price deflation in Woolworths’ stores, with a 1% drop in average basket prices from January to Easter, amid overall store inflation below 2%.

As Banducci stands by these principles, the inquiry, led by Greens member Robert Simms, continues, following a federal Senate investigation that hinted at probable price gouging within the sector and recommended legislative changes to enhance market competition.

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Lendlease Chair to Exit Amid Investor Pressure, Eyes on Upcoming Strategy Revamp

Michael Ullmer, chairman of Lendlease, is set to retire this November, marking the end of his tenure at the company since 2011.

His upcoming departure aligns with calls from influential groups like Tanarra Capital and Allan Gray, who have been vocal about steering the company towards a more streamlined operation focused chiefly on Australia.

The spotlight is now on Lendlease's strategy meeting scheduled for May 27, led by CEO Tony Lombardo.

Plans to simplify the business model and sell off non-core assets, such as the recent $147 million deal moving its Asian Life Sciences business into a joint venture with Warburg Pincus, are on the agenda.

This move is part of Lendlease’s broader strategy to refine its focus and potentially bolster investor confidence.

While a new chairman with deep roots in real estate is being scouted, rumors swirl around John Mulcahy, former Mirvac chairman, possibly stepping into the role.

Even though Lendlease’s shares dipped slightly following the announcement, Citi analysts suggest that a successful execution of this proposed strategic overhaul could positively influence the company’s market standing.

Aussies to Pocket Tax Cuts, Bucking Spending Splurge

Westpac’s Consumer Sentiment Survey revealed that the majority of Australians are planning on socking away the extra cash from the upcoming Stage 3 tax cuts rather than splashing out on non-essentials.

A savvy 80% of respondents are set to save at least half of their tax cut windfall as they prioritize financial recuperation over retail therapy.

Interestingly, while 30% of those surveyed are planning to save every penny of the tax break, an additional 50% aim to stash at least half.

The forecast?

Only a minor portion, about $4.7 billion out of the $23.3 billion from the tax cuts, is expected to float into the consumer spending stream.

This cautious approach aligns with findings from a similar NAB survey earlier in May, which also signaled a consumer preference for padding savings accounts over indulging in spending sprees.

Furthermore, the survey sheds light on other priorities with 29% of participants looking to manage rising living costs and 22% opting to reduce debt loads.

Amidst lingering concerns over inflation and potential rate hikes, the Westpac consumer sentiment index took a slight dip in May, painting a picture of wary Australian consumers likely to continue their conservative financial stance in the coming months.

Accenture Bolsters Australian Expertise with Strategic Acquisition

Accenture is beefing up its expertise down under with the acquisition of Sydney-based Partners in Performance, a specialist management consultancy in the resources and energy sectors.

This strategic move is aimed at ramping up services in capital projects, energy transition, and decarbonization—critical areas as the world shifts towards more sustainable energy solutions.

Founded in 1996 by Skipp Williamson, a former McKinsey & Co consultant, Partners in Performance has expanded its global footprint with over 500 staff across seven offices worldwide.

This team is well-versed in guiding C-suite leaders, especially in asset-heavy industries like metals, mining, and oil and gas, towards sustainable growth through advanced analytics and innovative practices.

The addition of Partners in Performance promises to enhance Accenture's operational technology, security services, and overall business improvement, bringing long-term value to its clients.

Peter Burns, who leads Accenture's operations in Australia and New Zealand, emphasizes the acquisition's alignment with their commitment to assisting industries reliant on substantial assets.

While financial terms remain under wraps pending regulatory approval, this move marks a significant enhancement of Accenture's service offerings in the growing Australian market.

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