Could Pokemon be the reason Coles outperformed Woolies? Brad Banducci thinks so
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Woolworths delivered results well below expectations for the first three months of the calendar year, with group sales up just 2.8%, Australian food sales up 1.5%, and Big W down 4.1%. In comparison, Coles posted a rather pleasing 3.4% rise, with food sales up 5.1% "We were out-traded in the quarter. Let me just own that," outgoing CEO Brad Banducci admitted on an investor call this week. Naturally, he also blamed Pokemon. I'll explain. During yesterday's investor call, Banducci told investors that one of the key reasons the supermarket was "out-traded" during the quarter was their lack of a collectables toy program. Coles, meanwhile, was heavily promoting its own Pokemon giveaways. Since ditching their controversial Little Shop collectables in 2021, mostly due to the disconnect between banning plastic bags and giving away mountains of plastic toys, Coles have moved to cardboard giveaways, which are cheaper to produce, controversy-free, and — according to Banducci — a key weapon in the supermarket wars. He defended giveaway toys way back in 2019, when Woolworths' own Lion King Ooshies were under fire for the same environmental concerns as Coles' Little Shop. "When you look at the number of incidents and the amount of pleasure that's been generated by the Lion King program, the positives versus the negatives are materially more positive than negative," Banducci told the AFR at the time. He really believes in the power of collectables. The thing is, he's not alone in this assessment. E&P Capital retail analyst Phillip Kimber also noted that, while Coles ran a successful Pokemon campaign, Woolworths did not run a collectible promotion, which he said "impacted results." Kimber also pointed to the opposite scenario happening a year ago: Coles had no collectibles, while Woolworths gave away Brick Farm collectibles - "amplifying the impact on growth rates." The business lesson? Never ditch the Ooshies.