Woolworths reveals $50m hit from damaging strike
Woolworths says the ongoing strike at several of its distribution centres has cost it $50 million – and costs will keep mounting.
The company revealed the cost in an update to the ASX on Tuesday, as it was also revealed it had filed an urgent application with the Fair Work Commission to stop union members from blocking access to its distribution centres.
Both sides appear to be digging in as the damaging strike nears the end of its second week, with picketers vowing to continue their around-the-clock presence at four Woolworths warehouses until a pay deal is reached.
United Workers Union members have blocked all entrances to a key distribution centre in suburban Melbourne after Woolworths announced plans to reopen.
Plans to bring in staff on Monday never eventuated, but picketers at the Dandenong South site turned away logistics trucks trying to enter.
Two other sites in Victoria and one in NSW are also affected by the industrial action.
Woolworths Group filed an urgent application with the Fair Work Commission on Tuesday.
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“The application comes after the UWU refused to give any assurance of safe passage for team members seeking to return to work at our Melbourne South Regional Distribution Centre yesterday and this morning,” it said.
The application to Fair Work alleges a breach of the Good Faith Bargaining requirements in the Fair Work Act.
The matter has not yet been listed for hearing.
As the dispute has ground on, supermarket shelves across Victoria have been stripped, in scenes akin to the Covid-19 pandemic.
“Until the industrial action is resolved, a further impact to sales is expected. The full financial impact at this stage is unknown,” Woolworths told the ASX.
“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.”
Empty shelves at a Woolworths in inner-city Melbourne on Monday. Photo: AAP
The company says most of the workers at the Dandenong South centre are not union members and want to return to work.
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“Our customers are facing increasingly empty shelves, another union has endorsed our deal, and we are still at the negotiating table with the UWU,” a Woolworths spokesperson said on Monday.
“As long as they continue to block access to our site, our customers will continue to face shortages on shelves in Victoria.”
The company and union returned to the negotiating table on Monday.
“We are hopeful of a breakthrough because our workers deserve to be safe at work,” UWU national secretary Tim Kennedy said.
Workers are protesting against “unrealistic performance expectations”, which they claim lead to frequent injuries. They are also demanding better wages, and an agreement that workers at different sites are paid the same amount.
Woolworths told the ASX the UWU demands would mean pay increases of more than 25 per cent over three years.
“[This would be] materially above inflation, at a time when Woolworths Group is actively working to keep food and groceries
affordable for customers facing ongoing cost-of-living pressures,” it said.
It also said the union’s demands about performance standards would mean the company could not manage productivity.
“The use of labour standards to manage productivity is common practice in supply chains globally and in Australia,” it said.
Woolworths said it had used “a range of contingency plans” to keep stores stocked, including building inventories and even having some suppliers deliver directly.
“However, due to the extended disruption, some Woolworths supermarkets in Victoria, ACT and NSW are experiencing stock-flow limitations on some lines, impacting product availability of ambient, chilled and freezer lines for customers,” the ASX update said.
