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Speaking to media after Woolworths' annual meeting on Wednesday, chairman Gordon Cairns and chief executive Brad Banducci said the supermarket group had been "playing catch-up" on capex in recent years, stepping up investment on store refurbishments and supply chain improvements after a period of under-investment.

However, as it came closer to completing the final phase of the program – rolling out new software in distribution centres – net capex would start to fall and there was scope to invest in prices while returning funds to shareholders.

"We've gone through a period of catch-up," Mr Cairns said. "As we move forward we'd like to see the capex program come back to a more normalised level."

"It's not as if we need to spend the money on capital – we have an effective store replenishment program, we have invested significantly in WooliesX – maybe the time now is to reward shareholders."

Analysts and investors have been expecting competitive pressures in supermarkets to ease after Woolworths' $1 billion investment in price in 2016 and 2017 and following Coles' demerger from Wesfarmers. 

However, Mr Banducci suggested Woolworths had no plans to take its foot off the pricing pedal and said Coles' listing "doesn't change anything ... unless they materially alter their strategy".

"There's a lot of pressure out in the community right now – the fuel price has come off somewhat but there's a lot of pressures with interest rates and paying principal on your home [loan]," he said.

"We have to all continue to deliver value so I don't think we're less focused on value."

Mr Cairns, the chairman of Origin Energy, said rising energy costs and subdued wages growth had added to the strain on household budgets.

"Our role is to make sure our products are more affordable for our customers," he said, "so the one thing they don't have to cut back on is their budget on food."

Woolworths is still reviewing capital management options after selling its fuel business to the EG Group for $1.72 billion earlier this month.

"We haven't decided what we're going to do and it will be nice to get the proceeds," Mr Cairns said.

"We have $2.3 billion of franking credits and clearly we want to use up some of those," he said.

"You can reward shareholders in terms of earnings per share and return on capital employed and total shareholder returns and there's a way you can also get franking credits to them – it's just a question of saying where is the balance."

Mr Cairns confirmed Woolworths would review options for Big W once it had returned to profit but would not be drawn on rumours the retailer was looking at selling its 75 per cent stake in pubs and clubs group ALH and its Endeavour Drinks business.

"Once [Big W] is fixed up we've got optionality. Having lost $100 million last year we have some ways to go before it's fixed up," he said.

Mr Banducci told shareholders there were "enormous opportunities" to improve the business this year, while Mr Cairns, who was re-elected at the meeting, used his address to emphasise the retailer's "community credentials".

"At a time when the community is losing trust in big business, I think it is important that Woolworths speaks up, and proudly displays its credentials," he said, citing the removal of single-use plastic bags and reducing carbon emissions by 10 per cent from 2015 levels.

The company is the largest owner of poker machines in the country. Mr Cairns said the company was committed to "harm minimisation" and was making a number of changes to its business following two external reviews.

ASX-listed online market place company Trade Me has attracted the interest of a cashed-up offshore buyer. 

Proving the apple doesn't fall far from the tree, Street Talk understands the former Fairfax Media-owned online business has received an indicative offer from an offshore financial investor, which is keen to take the company off the ASX and NZX boards. 

Sources said Trade Me is quietly dealing with the proposal which was made in the past week. 

Should the company reject the proposal, it's bound to be on high alert in case the tyrekicker returns. They know that it is rare for a financial type to walk away after a first rejection. 

Investment bank Goldman Sachs is around the situation, lender sources said. 

Trade Me is a New Zealand online marketplace business with $NZ250 million revenue and $NZ164 million EBITDA in the 2018 financial year. 

The company's shares trade on both sides of the Tasman and it has about a $2 billion market capitalisation. Its biggest shareholders include Australian fund managers Hyperion Asset Management, Investors Mutual and entities linked to the Commonwealth Bank of Australia. 

Trade Me was formerly owned by takeover target Fairfax Media, which is publisher of The Australian Financial Review. 

Fairfax Media spun the business off in December 2011, before selling out completely one year later in deals where the proceeds were used to pay down head company level debt.

The business is chaired by former Fairfax chief executive and former All Black David Kirk.

Trade Me has two major operating segments, its general items marketplace as well as its classifieds business, which includes jobs, cars and property. Its shares are not cheap - they trade at 19-times forward profit and 11.6-times forward EBITDA, according to S&P Capital IQ. 

Elsewhere, White & Case, which formally launched in Australia in October 2017, has hired partner Nirangjan Nagarajah from Gilbert + Tobin. Nagarajah resigned from G+T last week after seven years with the firm, as first reported by this column on Tuesday. 

Nagarajah started his career at the Australian Securities and Investments Commission and also worked at the Takeovers Panel between 2008 and 2010. After just under a year at Mallesons, Nagarajah joined G+T in 2011.

Coles Group is expected to trade at about a 10 per cent discount to rival supermarket giant Woolworths when it hits the ASX-boards on Wednesday.

As fund managers and sell-side analysts place bets on what shapes as the biggest game in equity capital markets this year, the smart money is on a $13 to $14 share price for Coles which would imply about an $18 billion market capitalisation and about 18-times forward profit.

The other question is how much Coles stock will trade when it lists on Wednesday, given the likely retail-heavy share register. Brokers reckon funds are likely to add or trim their stakes depending on their growth/value slant, but past deals shows retail investors will largely sit on their new Coles shares.

Where Coles' share price lands will depend on who is buying and who is selling on Wednesday.

Funds have had their retail analysts trying to value the business over the past month, to come up with trading strategies to enact this week. The key valuation yardstick is already-listed Woolworths, which trades at 20-times 2020 financial year profit, on Citi's numbers.

Consensus is Coles will trade at a discount to Woolworths given outlook for its grocery and other businesses, although fundies have differing views on whether that discount should be 5 per cent, 10 per cent or more. 

There'll be plenty of fundies, traders and corporate types watching Coles trading on Wednesday morning. Unlike an initial public offering or secondary market ECM deal, the demerger structure means it's 100 per cent up to the market to find the matching price. 

Brokers Goldman Sachs and Macquarie Capital will no doubt be working hard to sell the deal. The two investment banks have been embedded in the Wesfarmers/Coles camp all year, and introduced Coles' new management team to fund managers over the past month. 

Fundies reckon they'll also keep a close eye on Woolworths' share price, which could also jump around while Coles finds its feet and offer trading opportunities. Meanwhile the Coles camp will be watching out for tricks from its arch rival, in case it seeks to spoil the big listing day. 

As for sell-side analysts, Citi reckons Coles is worth $14.20 a share, Morgan Stanley has a wide range with a midpoint at $11.09, CLSA is also at $14.20 and Deutsche Bank's team is at $13. 

The other question is how much Wesfarmers' shares drop. All things being equal, they should drop by 85 per cent of the value of Coles, given the conglomerate its maintaining a 15 per cent stake. 

First-half earnings for beef producer Australian Agricultural Company have been hit by a decline in the market value of livestock, due to an increase in global beef supply.

For the six months through to September, the company (AAC) booked a net loss after tax of $68.4 million, compared to a loss of $37.7m the prior period.

AACo also booked negative statutory earnings before interest, tax, depreciation and amortisation, posting a first half loss of $82.9m, from a $36.5m loss the prior year.

“The statutory earnings before interest, tax, depreciation and amortisation loss was a result of an overall decline in market value of livestock, including a decline in the lower value composite cattle numbers,” chief executive Hugh Killen said.

“However we have seen a 16 per cent increase in our highest value wagyu herd numbers.”

He added: “The increase in global beef supply, which is likely to extend into 2019, has led to competitive pressure on pricing. However our wagyu revenue for the half was up, driven by increased sales volumes.”

The company said challenging conditions that have impacted operating costs during the period look set to continue into the near term.

Station operating expenses increased due to deteriorating seasonal conditions during the period, resulting in increased feed, supplement and freight costs.

“Our financial performance over the past six months has been impacted by a range of factors including weather and macro trends, yet we continue to deliver against our strategy,” Mr Killen said.

Operating profit increased over the period after the company suspended operations at the Livingstone Beef processing facility in Darwin and the production of beef in its 1824 brand, as sales of non-Wagyu cattle were brought forward and external purchases of cattle for processing were wound back.

“During the half, we continued to invest in our core assets; our land, our herd, and our people,” Mr Killen said.

“We continued to refine our supply chain and pursue greater operational efficiencies in order to optimise our production base.

“We have also invested in marketing our brands and developing our distribution network.

“This has enabled us to continue successfully executing on our strategy to supply the growing demands of high-end markets, both overseas and in Australia, by producing highest premium branded beef at scale.

New Zealand dairy giant Fonterra is cutting carbon emissions at its Brightwater milk processing plant by converting the coal boiler so that it can be co-fired with wood.

Minister of Energy and Resources, Hon Dr Megan Woods, officially switched on the newly converted boiler at the plant today.

The dairy multinational has come under public pressure in recent years to cut the use of coal boilers for drying milk.

The conversion reduces the amount of coal used and cuts carbon emissions at the site by around 2,400 tonnes a year.

Last year Fonterra developed a Road Map to Transition to a Low Emissions Future with the Ministry for the Environment.

Robert Spurway, Fonterra COO global operations, says the conversion is part of a wider plan to reduce emissions across all sites.

“We’ll take what we learn from this conversion and apply it to our longer-term co-firing strategy for other boilers across the country. Brightwater shows what’s possible when it comes to reducing our reliance on fossil fuels.”

“We’re serious about meeting our targets to reduce carbon emissions by 30 per cent by 2030 and net zero by 2050 across all New Zealand operations. Achieving them will involve a combination of energy options and energy efficiency gains,” Spurway said.

Andrew Caseley, EECA’s chief executive, said that the project demonstrates the power of co-firing.

“Co-firing has wide potential for replication with other businesses that use coal boilers, with the ultimate goal of replacing fossil fuels with renewable energy,” Caseley said.

The 2018 Australian Women in Wine Awards (AWIWA) recognised top women in the wine sector at an Awards Day in Sydney.

The award giving body recognised Kate Goodman, owner of Goodman Wines / Penley Estate, with “Winemaker of the Year”; Nicole Pitman, Kingston Estate owner as “Viticulturist of the Year” and Sarah Marquis, CEO of Mollydooker Wines as “Owner/Operator of the Year”.

“It’s a tremendous honour to be recognised as a valuable contributor to the industry I am so passionate about, and in doing so help the community organisations we support through the success of the business,” Marquis said.

Marquis is the businesswoman behind Mollydooker’s, Lefty, Family and Love series of wines and the Velvet Glove Shiraz with her former husband. In May 2017, she took full ownership of Mollydooker Wines and took the family business to the international wine landscape. Under her leadership, Mollydooker Wines has also won the Business SA 2017 Regional Exporter Award. Currently 80 per cent its production each year is exported around the world.

“I immediately took steps to increase the level of professionalism in management and to realise Mollydooker’s full potential,” said Marquis. “By cultivating a collaborative working environment, introducing accountability and empowering my team we have been able to grow all aspects of the business.”

The award recognises business owners who has made an outstanding contribution to their companies and the Australian wine industry. The Australian Women In Wine Awards is an awards platform for women in wine. In its 4th year, the awards recognises the contributions of women in the Australian wine community, who inspires the new generations of women in wine.

2018 Australian Women in Wine Awards winners:

• Winemaker of the Year – sponsored by Tonnellerie Saint Martin
  • Kate Goodman, Goodman Wines / Penley Estate

• Viticulturist of the Year – sponsored by Wine Australia
  • Nicole Pitman, Kingston Estate 

• Owner / Operator of the Year – sponsored by WineWorks Australia
  • Sarah Marquis, Mollydooker Wines

• Workplace Champion of Change – sponsored by Winemakers’ Federation of Australia
  • Lara Simic, Winestate Publishing

• Cellar Door Person of the Year – sponsored by Platinum Bags
  • Janine Carter, Voyager Estate

• Researcher / Innovator of the Year – sponsored by Angove Family Winemakers
  • Dr. Jacqui McRae, Australian Wine Research Institute

• Marketer of the Year – sponsored by Denomination 
  • Lynda Schenk – Purple Giraffe

• Woman of Inspiration – sponsored by Irvine Wines
  • Tamara Grischy, Langtons

Australian consumer confidence is bouncing back according to the latest research by ANZ-Roy Morgan.

The research group reported this week a 2.6 per cent rise, indicating recovery from the dive seen during the Wentworth by-election.

ANZ-Roy Morgan said that performance is positive in financial and economic conditions.

“Consumer confidence registered its third consecutive gain after the sharp fall recorded during the Wentworth by-election weekend. In fact, confidence has more than regained that fall and is at its highest level since late July,” ANZ’s head of Australian Economics, David Plank, commented.

“Last week’s RBA Statement on Monetary Policy was quite upbeat on the Australian economy. At the same time, the Bank’s message of no near-term hikes in the interest rate was reassuring for households. Sentiment might have received boosts from the recent easing in petrol prices and the rebound in equity markets.

“There is some important data this week that may impact household sentiment, not least Q3 wage data. We think this will be boosted by the rise in the minimum wage and the finalising of some enterprise agreements.”

ANZ-Roy Morgan further reported that Australian households’ perceptions of current financial conditions and future financial situation rose by 3.9 per cent and 2.2 per cent. It is close to the highest level seen since the GFC. Also, current and future economic conditions leaped by 7 per cent and 4.5 per cent respectively.

Meanwhile, the ‘time to buy a household item’ sub-index declined by 3.1 per cent, only partial reversing the prior week’s sharp gain of more than 9 per cent. Four-week moving average inflation fell by 0.1 ppt to 4.4 per cent.

Shanghai | Jessica Rudd returned to a very different China four months ago than the one she left four years earlier.

The author, entrepreneur and daughter of former prime minister Kevin Rudd understands the Chinese consumer better than most. She lived in Beijing with her husband Albert Tse for five years before moving back to Australia to raise her family in 2014, speaks Mandarin, and has her own profile in China as a brand ambassador and online celebrity.

Ms Rudd moved to Shanghai with Mr Tse and their two children in August for a four-month stint where she has been busy reconnecting with a country she is close to personally and professionally. Ms Rudd started he online sales company Jessica"s Suitcase in 2015 after being hounded by friends in Beijing to bring back suitcases full of products from Australia whenever she went back home.

This week, Ms Rudd started a new chapter in her China story when she sold the remaining 45 per cent stake in that business to ASX-listed technology group eCargo and teamed up with Australian wholesaler Metcash to help it sell fresh food into the world's second-largest economy.

Jessica Rudd with her father, former prime minister Kevin Rudd.
Jessica Rudd with her father, former prime minister Kevin Rudd.
"I have seen this market boom in the most exciting ways. Jessica's Suitcase was conceived when I was a young mum in China looking at the lifts in my building which was full of couriers and trying to work out what people were buying and where they were buying it from," Ms Rudd told The Australian Financial Review in Shanghai.

"This was an economy that has gone from cash entirely, from guys walking around with Gucci man purses from full of 100 kuai ($20) notes. I have been in Shanghai for four months and I haven't withdrawn currency once. They have leapt over the credit card trend and leapt straight into payments like Alipay and WeChat."

​"But there is one constant and that is this massive demand from this consumer body for Australian and other goods from overseas."

The spending power of the Chinese consumer will be on display this Sunday.

Singles Day, November 11, was invented by Alibaba and is the biggest online shopping day in China and the world when millions of people are encouraged to splurge online in a sales frenzy that makes the Boxing Day sales in Australia look like chicken feed.

Ms Rudd last week sold the remaining 55 per cent of Jessica's Suitcase to eCargo, where she retains a board seat and an active role in the company.

She is now focused helping eCargo's big push into fresh food into China. ECargo last week acquired an 85 per cent stake in Metcash's export arm, which includes its China business.

Unlike Coles and Woolworths, which have only dipped their toes into the China market, Metcash has been selling food, household, baby, wine and healthcare products to Chinese consumers online and offline for some time. Its focus is on China's so-called 3, 4, and 5-tier cities, which are smaller the more established mega-cities well-known to Australians such as Shanghai and Beijing, but still have enormous populations and a rising middle class.

"Most of China's 1.4 billion people live in the third to fifth tier cities," says Will Zhao, who heads Metcash's China operations. "What we are seeing is an absolute consumer upgrade in those cities. They want better lives and socio-economic outcomes. While there is talk of potential economic downturns, those cities are thriving and growing in double digits."

"We have spent a good part of two years building a strategy to build a platform into those cities to sell Australian products."

Both Mr Zhao, who was born in Shanghai but raised in Australia, and Ms Rudd say they were "terrified" of each others businesses before agreeing to join forces.

"I watched Metcash come online shortly after Jessica's Suitcase came online in 2015 and I was completely terrified. There I was, a start-up retailer googling what a SKU meant and there was this behemoth in the form of Australia's largest wholesale distributor, and it was suddenly entering the market," Ms Rudd said.

"The other big grocers have dabbled at the sidelines but haven't thrown themselves fully into Chinese cross-border ecommerce. They don't have the expertise on the ground.

Ms Rudd will keep her role as a Lifestyle Ambassador" for Chinese e-commerce giant Alibaba. In China, companies hire Key Opinion Leaders (KOL) are use their social media profiles to generate sales.

"She is an iconic Australian strong-willed lady who is leading the charge bringing quality products coming into china," Mr Zhoa says.

The deal combines Jessica's Suitcase, eCargo and Metcash in China. Ms Rudd says the business will be able to help brands from Australia and other countries break into the China market.

Both are confident China's new e-commerce laws will only help companies selling into via established online stores. While her father has strong views on the way Canberra has managed its relationship with China, Ms Rudd says she is focused on the country's insatiable appetite for Australian products rather than the political "noise".

ECargo and Metcash sealed the deal while attending China's import-themed trade fair in Shanghai last week.

"We are completely inundated because there is steak on the BBQ and people are desperate to get their hands on Australian products," Ms Rudd says.

Ms Rudd and Mr Tse, whose investment fund Wattle Hill is focused on China deals, will move back to Brisbane at the end of the year but she plans to spend a lot more time in Shanghai in the future.

Supermarket giant Woolworths appears to have learned a thing or two from the unprecedented success of its rival Coles’ Little Shop promotion and is now launching a Christmas campaign of its own to lure shoppers through the doors.

Woolworths Christmas Pop-Outs, which is available from this Wednesday, features 12 Christmas-themed cardboard characters that shoppers can build themselves. The characters ‘pop-out’ of a cardboard frame and shoppers can follow the instructions at the bottom of the board to build them.

Characters including Santa, Reindeer, Elves, Gingerbread Man, Snowman and more will be offered to customers as a festive gift with every $30 spent on eligible purchases in store or online.

Three characters will be released each week, for the next four weeks and a collector Christmas tree stand to house the characters will be available to purchase for $3.

Unlike Coles Little Shop, which featured miniature plastic grocery items, eco-conscious shoppers will be glad to hear that Woolworths pop-outs are fully recyclable and Australian-made.

Customers will also be able to see the characters they are getting to help avoid duplication or disappointment and to minimise waste.

Managing director of Woolworths supermarkets, Claire Peters, said that the collection adds something “a little magical” to the supermarket’s Christmas offerings.

“We are really excited to be able to offer Australian families a small gift that captures the fun, imagination and festive spirit of the season with the ‘Woolworths Christmas Pop-Outs’. Christmas is all about spending quality time with family, friends and loved ones and this is a great way for everyone to get together to workshop, build and play with their favourite Christmas characters,” Peters said.

“We believe that kids, parents, grandparents and individuals will be captured by the wonder and imagination of the range and will find ways to make them their own this Christmas – whether that’s as a place card for the dining table or an additional festive ornament around the Christmas tree.”

he “big two” Aussie supermarkets continue to dominate the $15.1 billion alcohol retail sector with hotel bottle shops feeling the pressure, according to the latest research from Roy Morgan.

Woolworths Group takes the largest market share in dollar terms standing at 52.1 per cent worth $7.9 billion, while Coles Group takes the next largest slice of the pie at 15.4 per cent, worth $2.3 billion.

In the 12 months to September 2018, hotel bottle shops lost 240,000 customers, while Woolworths-owned outlets picked up 250,000. Independent retailers and hotel bottle shops struggled to compete, with market share at 10.5 per cent and 9.9 per cent respectively.

Woolworths-owned Dan Murphy’s increased its customer base over the period by 4.0 per cent while its BWS customer base increased by 9.3 per cent.

Coles’ Liquorland experienced a drop of 13.1 per cent in its customer base, while Vintage Cellars’ grew by 18.5 per cent and 1st Choice Liquor remained virtually unchanged.

Meanwhile, ALDI and IGA remained small players in the alcohol retail market, taking market shares of 3.3 per cent and 3.4 per cent respectively.

Roy Morgan CEO, Michele Levine, said that Woolworths “continues to set the pace” making it difficult for smaller retailers.

“This is certainly harming the trade of hotel bottle-shops, which have continued to lose customers. That has to hurt in a retail environment in which total spend on packaged alcohol has been falling throughout 2018,” Levine said.

The Roy Morgan Alcohol Retail Currency Report is based on data collected through in-depth face-to-face interviews conducted with over 50,000 Australians. It shows a number of drivers of buying behaviour including “proximity to other shops, low prices, an easily browseable range and good special offers”.