Woolworths Group has taken a $50 million hit to food sales over the past two weeks due to an ongoing industrial dispute, with no resolution in sight as the crucial Christmas trading period approaches.
The dispute, which centres on a pay increase demand of 25% over three years from the United Workers Union (UWU), has led to significant disruption at four key distribution centres—three in Victoria and one in New South Wales. Striking workers have caused stock shortages across supermarkets in Victoria, southern NSW, and the ACT since 21 November, leaving customers facing empty shelves and limited availability of chilled, ambient, and frozen goods.
Negotiations at a standstill
Woolworths claims it has engaged “in good faith” with the UWU for the past four months. However, talks remain deadlocked. The company’s CEO, Amanda Bardwell, apologised for the inconvenience caused to customers, thanking them for their patience during the disruption.
“We sincerely apologise to all of our customers for the inconvenience caused by the inconsistency of supply across some product lines in some of our stores in Victoria, southern NSW and ACT,” Bardwell said.
Woolworths has implemented emergency measures, including leveraging alternative distribution networks and working directly with suppliers to replenish store inventory. Despite these efforts, the company anticipates further financial and operational impacts if the strike continues.
Economic impact
The $50 million sales loss has already dented Woolworths’ Australian Food division, though the company has not yet adjusted its earnings forecast for the half-year to December. Current EBIT projections remain between $1.48 billion and $1.53 billion, down from $1.595 billion during the same period last year.
“The full financial impact at this stage is unknown,” the company said. “It will be dependent on the duration and extent of the ongoing industrial action across the affected sites, and the time taken to rebuild inventory ahead of the Christmas trading period.”
Union and productivity clash
Woolworths has pushed back on the union’s demands, labelling them “materially above inflation” and incompatible with maintaining affordable prices for customers. The company has highlighted the union’s demand to eliminate performance standards as a major sticking point, arguing this hampers its ability to maintain supply chain efficiency.
In contrast, Woolworths’ latest pay offers would raise hourly rates at affected sites to approximately 40% above the Storage Services Award, according to the company. Despite the Shop, Distributive and Allied Employees’ Association (SDA) endorsing an agreement at one Melbourne centre, UWU picketing has reportedly prevented the site from reopening.
What’s next?
With Christmas just weeks away, the stakes are high for Woolworths to resolve the industrial action swiftly. The dispute underscores the fragility of Australia’s supply chain during peak retail periods and the growing tension between corporate and labour interests in an era of inflationary pressure.
For updates, visit Woolworths Group’s website.
