Woolies’ worker strikes deal $190 million blow to profits
Woolworths has copped a $190 million hit to profits and suffered a double-digit operating earnings slump after shelves were stripped bare during a two-week worker strike in December. And it warned the pain isn’t over yet, flagging further declines for the June half.
Net profit fell 20.6 per cent to $739 million and earnings before interest and tax (EBIT) declined 14.2 per cent to $1.45 billion in the six months to 5 January due to a fall in the volume of groceries sold, and the supply chain costs of stocking shelves during the industrial action that shuttered distribution centres in Victoria and NSW, the supermarket giant said in a statement to the ASX on Tuesday.
While it was still early in the June half, chief executive Amanda Bardwell said the company expected EBIT to suffer a “mid-single digit decline” in the current six-months period. “Cost-of-living pressures for customers persist,” prompting consumers to seek out bargains and shop across the different supermarket chains to find the cheapest options, she said.
Bare shelves in a Melbourne Woolworths in late November: The strike has cost the company dearly.
The grocery giant claimed that the fall in Australian grocery sales would have only been 5 per cent if not for the strike action.
“The team has worked incredibly hard to recover from the supply chain disruptions caused by industrial action in November and December,” Bardwell said in the company’s earnings release to the ASX on Tuesday morning.
“In Victoria, sales have not yet fully recovered, but availability and customer metrics are returning to pre-disruption levels with ongoing efforts to regain customers.”
Overall, Australia’s biggest supermarket chain’s sales rose 3.7 per cent to $35.9 billion and online sales increased 18.3 per cent to $4.7 million.
Customer metric scores, which plummeted during 2024 amid accusations of price gouging, had actually been improving for the $38 billion supermarket giant before the company was hit by the Australian Competition and Consumer Commission (ACCC) legal action, the interim report in September, and the strikes in November and December.
More to come
