Woolworths Faces Scrutiny from Media Regulator | KOSEC

Industry News

& Articles

Woolworths Faces Scrutiny from Media Regulator

Facebooktwitterlinkedin

In its recent trading update announced last week, Woolworths Group revealed the additional costs that it is likely to incur in the FY20 financial year. Yet, it is apparent that the list is not final. On the 2nd of July, the group’s supermarket division came under the scrutiny of The Australian Communications and Media Authority. Specifically, the media regulator issued a $1,003,800 fine as Woolworths was guilty of breaching the Spam Act 2003.

The Act provides consumers with the right and discretion to opt-out receiving marketing information. However, Woolworths continued to send emails to consumers who had already chosen not to be part of the mailing list. The breaches, which amount to more than 5 million, took place between October 2018 and July 2019. More broadly speaking, the fine represents one of the heftiest fines since the introduction of rules. It also serves as a timely reminder for companies regardless of scale to actively comply with regulations.

Meanwhile, Woolworths attributes the mistake to several factors. Foremost, the group’s spokesperson believes a significant proportion of breaches to households sharing email addresses yet own separate rewards accounts. Consumers falling under this category would then receive two sets of emails. Woolworths also believes that the breaches also reflect the joint result of systems and technical errors previously resolved. Under a court-enforceable undertaking, the Group will identify an appropriate consultant to review its policies, procedures and processes to close up any room for improvements prior to reporting back to the regulator.

More importantly, this is not the first time regulators are coming into the picture. In its recent trading update, the Group cautioned that $105 million would be recorded in H2FY20 to account for expenditure related to ongoing remediation efforts. The amount is on top of the $80 million recorded in H1FY20 reflecting interest and remediation expenditure related to payment shortfalls for salaried staff across Woolworth’s businesses. Currently, the total cost of remediation will amount to that of $390 million.

On a more positive note, the firm has finally been able to sell off its Melbourne property. The property consists of a Woolworths supermarket, BWS and fifteen retail tenancies in The Village Dandenong Shopping Centre. The $29 million transaction represents a yield of 5.2 per cent and also marks the end of a three-year attempt in identifying a suitable buyer. Additionally, the price tag also reaffirms the robust demand in non-discretionary retail businesses.

Meanwhile, trading in the last quarter of FY20 remained strong across all segments except for Hotels. However, because of higher costs incurred through the pandemic, Woolworths Group expects earnings before interest and tax (EBIT) for FY20 to come in between $3,200- $3,500 million, slightly lower than that of $3,290 million. Nevertheless, with the upcoming initiative surrounding an automated distribution centre, the Group’s short-term pain will be offset by long-term benefits and savings.

By Caroline Wong 

Click here for a 7 days access to our Lotus Blue Portal.

Caroline Wong

Caroline Wong is a Research Analyst at KOSEC – Kodari Securities. She writes on markets and focuses on ASX Top 300 companies. Email Caroline at c.wong@kosec.com.au.

Comment on this company

Latest Stories

Macmahon Wins Coburn Mineral Sands Project

Macmahon Holdings Limited (ASX: MAH) has revealed on the 3rd of August, that it has.. …

Magellan Announces Global Equity Fund Restructure

Magellan Financial Group has announced that they will restructure the retail product.. …

Infigen Updates Fourth Quarter FY20 Operations

Infigen Energy (ASX:IFN) releases its quarterly activity report for the three months ending 30 June 2020……

More for you

Origin Energy Posts Resilient Fourth Quarter Results

On the 31st of July 2020, Origin Energy (ASX: ORG) releases its quarterly report which details.. …

Clinuvel Pharmaceuticals releases quarterly activity report

Clinuvel Pharmaceuticals (ASX: CUV) has released strong results in a quarterly activity report……

CIMIC Group Reports HY20 Performance

Cimic Group Limited (ASX:CIM) releases its half-year performance for the six months to 30 June 2020, highlighting……

Fortescue Metals Reports Record Iron Ore Shipments

Fortescue Metals Group (ASX: FMG), as of the 30th of July released their June 2020… …

Macquarie Group Reports fall in profits of 8 per cent

Macquarie Group has reported an 8 per cent decline in profits in the FY20 financial year at $2.731 billion……

Nickel Mines Releases Quarterly Activities Report

Nickel Mines Limited (ASX:NIC) has released a quarterly operations statement for the quarter……

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial