CEO and managing director, Woolworths
Born: 1942, in Sydney, New South Wales, Australia.
Education: University of New South Wales, BA; Stanford University, MBA.
Career: Grace Brothers, 1963–1984, started on loading docks but soon moved into management, serving as merchandise director and stores director; David Jones, 1984–1990, director of operations; Big W, 1990–1997, managing director; Woolworths, 1997–1998, managing director, retail; 1998–1999, chief operating officer; 1999, CEO and managing director.
Address: Level 5, 540 George Street, Sydney, NSW 2000, Australia; http://www.woolworthslimited.com.au.
■ Roger Corbett, chief executive officer and managing director of Woolworths, Australia's leading supermarket chain and its most successful retailer, began his career on the Grace Brothers loading dock. Over the years, he picked up marketing know-how from some of Australia's leading retailers, including David Jones (Australia) and Grace Brothers. Corbett also developed a keen understanding of technology and the supply chain, knowledge he used to give Woolies—as Woolworths is affectionately known Down Under—a strategic advantage in its battle for market share.
Under Corbett's direction, Woolies surpassed its chief rival, Coles Myer, in the food-retailing market. In addition to supermarkets, both Woolworths and Coles Myer operate a variety of other retailing outlets, including general and specialty merchandise stores, discount outlets, and liquor stores. Although Coles Myer's retail empire continued, as of 2004, to be the biggest in Australia, Woolworths was slowly but steadily closing in on its rival and, perhaps more important to its shareholders, had managed to post consistently higher profits than Coles in the preceding few years.
The supermarket rivalry between Woolworths and Coles Myer—Australia's two largest food retailers, with an estimated 75 percent of the market between them—had begun long before Corbett took the helm of Woolies. At the outset of the 1980s Woolworths had been the undisputed leader in Australian food retailing, but it fell on hard times by the middle of that decade, even posting a loss in 1986. Coles soon moved into the lead and stayed there for several years. Woolworths, which had built a reputation for its wide variety of fresh produce and other foods, finally overtook its rival and, by the early 2000s, had a solid lead over Coles.
With competition for Australians' food dollars already sharp, the entry of the German grocery retailer Aldi into the mix, beginning in 2001, further complicated the market outlook. Corbett acknowledged Aldi as a serious competitor, but he also said that he doubted that the German company would substantially cut into Woolworths' market share. Aldi, said Corbett, offered a very limited number of grocery items—approximately six hundred to eight hundred—compared with the 25,000 to 35,000 different branded products available on the shelves of the typical Woolworths supermarket. "I think Aldi is a nice operator that seeks a market around the world," Corbett told Richard Salmons of the Age . "It's a very focused and narrow offer."
Next, Corbett faced a significantly reinvigorated Coles, which seemed determined to hold on to its leadership in Australian retailing. However, for every initiative mounted by Coles to steal market share from Woolies, Corbett came up with an innovative counterstrategy not only to protect Woolworths' market share but also to propel Woolies into the lead. When Coles Myer struck a deal with Shell to take over nearly six hundred Shell gasoline outlets across Australia, Corbett struck back. The Woolworths CEO set up a joint venture with Caltex to market gasoline at 450 co-branded Caltex/Woolworths service stations. The Caltex deal expanded the gasoline marketing share of Woolworths, which also marketed gasoline through its 280 Plus Petrol outlets.
In still another round of the continuing face-off between Woolworths and Coles Myer, Corbett in 2003 announced a plan to introduce pharmacies into selected Woolworths supermarkets. These in-store pharmacies, he said, would be operated by licensed pharmacists. The plan immediately drew fire from Australia's Pharmacy Guild, which pointed to the obvious conflict between pharmacists' efforts to discourage smoking and the supermarkets' earnings from tobacco products. However, by year's end, Coles Myer had announced that it was seriously considering following Woolworths' lead.
Corbett, a native of New South Wales, attended Shore School in North Sydney. While at Shore, he was a member of school's rugby team and thereafter remained a big fan of the game. A passionate supporter of Shore, which was also known as the Sydney Church of England Grammar School, Corbett served in 2003 as chairman of the school's council. He later attended the University of New South Wales, where he earned his BA in business administration. Corbett also earned an MBA from Stanford University in Palo Alto, California.
Corbett's career in retailing began in the mid-1960s on the loading docks at the Grace Bros. department store in Sydney's Chatswood neighborhood. He was hired to unload pallets, "unbelievably hard" work as he told a June 2003 seminar sponsored by the Financial Review BOSS magazine. "There was no motorization of the pallets; you just had to pull them, and they were really heavy." It was not long, however, before Corbett's potential as a manager was recognized, and he moved quickly up through the ranks at Grace Bros. Over the next couple of decades he held positions as merchandise director and stores director. It is something of an irony that Corbett's first stop in his long retailing career later became part of the retailing empire of Coles Myer, Woolworths' chief rival. Grace Brothers Holdings was acquired in 1983 by Myer Emporium, which two years later merged with Coles to form Coles Myer.
Corbett in 1984 joined the board of David Jones as director of operations. David Jones, which first opened its doors in May 1838, was Australia's oldest department store and the oldest department store in the world to be still trading under its original name. Corbett remained with David Jones until 1990, when he was hired to serve as managing director of Big W, the discount department store division of Woolworths.
Corbett was an unapologetic adherent to the discount retailing gospel according to the late Sam Walton, the Arkansan who created Wal-Mart, the world's largest retailer. Using some of the same strategies Walton employed to transform Wal-Mart into a retailing giant, Corbett successfully guided Big W into the big time during the 1990s. To help ensure that Big W made no missteps in its efforts to recreate the Wal-Mart magic Down Under, Corbett brought in the American Jack Shewmaker, a former Wal-Mart president. By the late 1990s Big W sales were outpacing those of its biggest rivals—Kmart and Target, both of which operated in Australia under the corporate umbrella of Coles Myer. Corbett generously gave much credit for Big W's success to Shewmaker.
Impressed by Corbett's accomplishments at Big W, top management at Woolworths in July 1997 named Corbett managing director, retail, for the entire group. A year later he became Woolworths' chief operating officer. In January 1999 he became CEO and managing director.
A central tenet in Corbett's management philosophy was the importance of creating a corporate culture that embraced egalitarianism and fostered teamwork. Corbett put a high priority on caring for other people, a concept that he defined as essentially following the golden rule of doing unto others as you would have them do unto you. His strict adherence to this concept helped create a fiercely loyal workforce at Woolworths. Of the importance of teamwork, Corbett told the June 2003 Financial Review BOSS seminar, "Colleagueship is a terribly important part of that process. It's got something to do with what I like to call the aggregate of the whole, that people feel that they belong."
Under Corbett, Woolworths' revenue and net income improved significantly. In fiscal 2000, which ended June 30, 2000, the company posted net income of $176.4 million on revenue of nearly $12.3 billion. Reflecting the worldwide recession in fiscal 2001, revenue dropped to $10.9 billion, but Woolies managed to end the year with a bigger profit ($242.6 million) than in the previous year. Fiscal 2002 brought net income of $317.3 million on sales of nearly $13.8 billion. In fiscal 2003 revenue jumped more than 27 percent, to $17.5 billion, and Woolworths posted a profit of $433.8 million. In addition to shepherding Woolworths to greater profitability, Corbett worked wonders for the company's stock. In 1998 the year before Corbett took over as CEO, Woolies stock, traded on the Australian Stock Exchange under the stock symbol WOW, languished at about A$4.20. In early 2004 the stock was trading just under A$12 a share.
Elaborating on what he saw as the key ingredients to a formula for business success, Corbett told the Financial Review BOSS seminar that in addition to knowing their business and being willing and able to do their homework, business executives must undertake reasonable business management. "You need to have good administration. You need to be able to measure your business. You need to be able to manage your risk."
Central to Corbett's success at Woolworths had been Project Refresh, a business strategy he introduced six months after taking over as CEO in January 1999. Although the company was riding high at the time, firmly entrenched as Australia's leading food retailer, he cautioned Woolworths employees and shareholders against the dangers of becoming complacent. Corbett said that when things were going relatively well was "precisely the best time to refresh ourselves, to reinvigorate the businesses, and to increase momentum," according to a company press release. He called upon employees at all levels to examine closely what the company was doing and to try to come up with ways of doing it better. In the years after the strategy was first unveiled, Project Refresh teams explored virtually every aspect of Woolworths's operations, including human resources, information technology, logistics, organization structure, and the cost of doing business. Tangible byproducts of Project Refresh were major overhauls of the company's technology and supply chain systems.
Speaking to shareholders in November 2003, Corbett predicted that the Project Refresh strategy would generate savings of A$4 billion over the following few years. He also reaffirmed the company's commitment to pursuing its successful low-cost strategy. In an interview with the Sydney newspaper the Age , he said that in the long run the outcome of the ongoing competition for Australians' food dollars would depend upon which company operated the "the most cost-efficient business." Corbett said that while the costs of Woolworths's leading competitors had increased during the first quarter of fiscal 2004, Woolies had managed to cut its costs significantly. He promised that the company's costs would continue to be reduced, saying "the competitive advantage of being a low-cost operation is where Woolworths' future lies, and that will give us our strength in the marketplace."
See also entries on Aldi, Wal-Mart Stores, Inc., and Coles Myer Ltd. in International Directory of Company Histories.
"AFR BOSS CLUB Transcript," June 4, 2003, http://www.afrboss.com.au/events/transcript.asp?eventid=371 .
"Aldi Invades Australian Market," MMR , April 16, 2001.
Downie, Stephen, "Profile: Woolworths' Chief, Roger Corbett," Daily Telegraph (Sydney, Australia), August 27, 2003.
Hedge, Mike, "Vic: Aldi Opens in Victoria," Australian Associated Press , May 14, 2003.
Maiden, Malcolm, "Shedding Light on the Corbett Deal," Sydney Morning Herald , September 22, 2003.
McCombie, Helen, "Woolies Still Going Strong," Business Sunday (television show), November 16, 2003.
Mitchell, Peter, "Woolworths Wins Back Lost Ground, Says Corbett," Sydney Morning Herald , October 17, 2003.
Salmons, Richard, "Corbett Stays at the Helm," Age (Sydney, Australia), July 9, 2003.
"Top 10 Mass Retailers: Excellent, Exciting," MMR , May 28, 2001.
Turnbull, Jeff, and Jonathon Moran, "Fed: Woolworths Strikes Back Hard in Petrol War," Australian Associated Press , August 21, 2003.
Wavish, Bill, "Woolies' Exec Move," MMR , May 12, 2003.
"Woolies Sales 'Excellent,'" Sunday Times (Perth, Australia), December 31, 2003.
"Woolworths Joins Pacesetters," MMR , May 28, 2001.
"Woolworths Momentum Grows," MMR , September 8, 2003.
"Woolworths Strategy Saves 'Billions,'" Age (Sydney, Australia), November 21, 2003.
"Woolworths to Meet Its Projections," MMR , October 20, 2003.