Mr Banducci will finish in September after 13 years working for Woolworths Group, including eight-and-a-half years as chief executive.
The announcement has paved the way for Woolworths to appoint its first female CEO, with Amanda Badwell to take the role.
Woolworths Group CEO Brad Banducci will be replaced by WooliesX Managing Director Amanda Bardwell. (HANDOUT/WOOLWORTHS GROUP)
Woolworths and Coles have faced accusations of price-gouging customers, stifling competitors and ripping off suppliers.
Mr Banducci walked out of an interview with the ABC's Four Corners program screened earlier this week after struggling to answer questions about the lack of competition in the supermarket sector.
Woolworths Group chairman Scott Perkins insisted the CEO's departure was not influenced by the criticism and praised him as one of the company's "finest leaders".
Asked about Mr Banducci's resignation, Prime Minister Anthony Albanese said he wanted to "talk about things other than personalities".
"When customers get to the checkout, they should get the lowest prices possible and when farmers are getting less for their products ... the price at the checkout should reflect that," he told ABC radio.
But Nationals leader David Littleproud did not hold back.
"It's about time," he told Sky News on Wednesday.
"The behaviour of Brad Banducci in that documentary on Monday night shows that once you tear away the very shallow exterior of these CEOs, that underneath it is a very deep-seated and very sinister value of the company that he was leading - that was exploiting farmers and consumers."
Woolworths and Coles are under pressure over allegations of price gouging and ripping off suppliers. (Joel Carrett/AAP PHOTOS)
The government has directed the Australian consumer watchdog to launch a probe into prices and competition within the supermarket sector after appointing former Labor minister Craig Emerson to review the effectiveness of the grocery code of conduct.
A Senate committee has also been established to examine supermarket prices.
But Mr Littleproud said the government should go further.
"We should have scaling penalties right up to divestiture powers, where we can actually take away some of their stores within geographical areas, to give more competition and even remove some of the chains that they have," he said.
Ms Bardwell was chosen after an international search.
The managing director of Woolworths Group's e-commerce arm helped take WooliesX from infancy to a $7 billion business.
"Amanda is highly respected throughout the organisation and I know, like Brad, will live our purpose and work hard to achieve Woolworths Group's full potential," Mr Perkins said.
The supermarket corporations are losing their social license. This is exactly what the Greens wanted to achieve with our Senate Inquiry. Now we need Labor to step up and take action to reduce their market domination. — Nick McKim (@NickMcKim) pic.twitter.com/zeGdVs66tRFebruary 21, 2024
But Greens senator Nick McKim said new leadership would not fix the issues in the food and grocery sector.
"Farmers, workers and shoppers are going to keep getting smashed regardless of who wears the CEO badge," he said.
ACTU assistant secretary Joseph Mitchell said Woolworths and Coles were using their market dominance to price-gouge working Australians.
"Brad Banducci has had a bad few days but we are focused on people whose bad days meant struggling to put food on the table or pay their bills due to the pricing practices of the big supermarkets," he said.
MEDIA RELEASE: Woolworths profits show they have far too much power, says ACTU — Australian Unions (@unionsaustralia) pic.twitter.com/M10NjThisAFebruary 21, 2024
The supermarket chain announced on Wednesday it suffered a $781 million first-half loss, including a $1.5 billion writedown of goodwill from its New Zealand supermarkets and $209 million change in accounting treatment of its holdings of Endeavour Group, the alcohol retailer it spun off in 2021.
Excluding those items, Woolworths posted a $929 million net profit after tax for the six months to December 31, up 2.5 per cent from a year ago with sales up 4.4 per cent to $34.6 billion.
Ms Bardwell will be paid $2.15 million a year in fixed compensation and will be eligible for up to $6.9 million a year in incentives.
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