Woolworths reached an agreement with striking workers at four of its warehouses over the weekend, bringing to a close a crippling strike that lasted more than two weeks, however that has not stopped the retailer claiming a $140M hit to their business.

Facing empty shelves in NSW and Victoria  Woolworths claims that a $140 million hit to their bottom line, in total which is a $90 million increase over its last update to the ASX on Tuesday, 3 December.

Woolworths says that Australian food EBIT is approximately $50million-$60 million, which was not factored earlier on into the forecast earnings for H1 F25.

“The full extent of the one-off financial impact is unknown at this stage. Woolworths Group will provide a comprehensive update on the one-off impacts of the industrial action at its half-year results in February,” it admitted in a statement to the ASX.

Although the strike has ended, Woolworths is still in the weeds and says that while all sites are now operational, it anticipates there will be further sales and earnings impacts to its earnings in Q2, due to the time and effort required to rebuild stock levels at both the distribution centres and stores ahead of the busy Christmas trading period.

 

The disruption at Woolworths has forced the country’s other largest supermarket, Coles, to compensate as customers frustrated with the lack of supplies at Woolies turned to Coles.

Together, Coles and Woolies control around 67 per cent of the supermarket sales nationally.

Coles was forced to ask its food and grocery suppliers to ship more goods to its warehouses and even have more staff on hand to handle the extra volumes. It even opened more checkouts at its stores to deal with the surge in customer traffic.

Coles chief commercial officer Anna Croft wrote to food and grocery suppliers advising them of higher volume orders to meet rising demand.

 

“We’re focused on delivering for the customers and communities that depend on us. As we respond to increasing demand, it’s essential that we continue to communicate and work together, especially with seasonal trade now underway,” said Croft in a note to suppliers.

“We recognise this is an evolving situation and appreciate your ongoing support. We ask that you continue your efforts to maintain, and uplift supply, and direct your representative resource into our Victorian stores.”

Woolworths Group CEO, Amanda Bardwell, acknowledged the latest deal with the United Workers Union, with the union winning an 11 per cent pay rise for its workers over three years.

But she cautioned that stocks at Woolies will only improve “gradually”. “With just over two weeks until Christmas, we are now moving products out of the DCs and onto supermarket shelves as quickly as possible for our customers,” said Bardwell.

“We are fully focused on restoring stock levels and getting products to stores where they are needed most, with stock levels to gradually improve…”

“We know it has been frustrating shopping in our stores and online in recent weeks in Victoria, the ACT and parts of NSW.”