By Andrew Starke
Woolworths has come out in strong support of its hotel and gaming business despite a number of shareholders voicing objections to the giant retailer’s poker machine operations at its annual general meeting held yesterday (Nov 26).
The company owns about 11,000 poker machines in 280 pubs and clubs run by subsidiary Australian Leisure and Hospitality (ALH), which Woolworths acquired in 2004.
However, Woolworths’ chairman, James Strong, pointed out that ALH revenue makes up less than two percent of Woolworth’s annual turnover.
He told shareholders that the retailer has no intention of selling its pub operations or reducing its ownership of electronic gaming machines.
Independent senator Nick Xenophon supported the position of a small but vocal minority of shareholders, telling reporters it was ironic that some people “can’t afford to buy food from a Woolworths supermarket because they’ve lost their money on a Woolworths poker machine”.
Both Strong and Woolworths’ CEO Michael Luscombe made it clear at the AGM that Woolworths complied with existing state gaming regulations and was committed to supporting initiatives aimed at helping problem gamblers.
More generally, both Strong and Luscombe warned that ‘frugalism’ is a defining feature of the Australian consumer at the moment.
However this has to some extent benefited Woolworths.
“Our supermarket and liquor businesses captured spending that would otherwise have gone to restaurants,” Luscombe said, adding that it had been a big year for investing in the company’s liquor supply chain systems with two new distribution centres in Melbourne and Sydney.
Woolworths shares were trading at $27.90 at 2:00pm today (Nov 27) compared to $28.00 seven days ago.