Summer of risk for food retailers with lasting impact of COVID, bushfires

Woolworths, Coles, Aldi and wholesaler Metcash have been warned to prepare for a tough summer with supply chain risks.

Prepare for a tough summer dominated by the lasting impacts of COVID-19, moderate bushfires and wetter than normal conditions that could spark floods and disrupt supply chains.

The nation’s biggest supermarket chains Woolworths, Coles, Aldi and wholesaler Metcash have been warned by the federal government’s Supermarkets Taskforce to prepare for a tough summer dominated by the lasting impacts of COVID-19, moderate bushfires and wetter than normal conditions that could spark floods and disrupt supply chains.

In a conference call held on Wednesday to discuss issues ­affecting the $100bn grocery sector, the attention of the key industry players focused beyond the expected Christmas rush and the summer that could see harsh weather conditions constrict the ability to shift supermarket products around the country.

This national supply chain could be hampered by floods in Queensland and adverse weather conditions in Western Australia that in the past have severed rail lines and transport routes, making it harder to get grocery supplies to these regions. This will be made all the harder by COVID-19 this summer, the taskforce warned.

The Supermarkets Taskforce, under the umbrella of the Department of Home Affairs, was established in March to respond to challenges facing supermarkets arising from the COVID-19 ­pandemic, and to co-ordinate supermarket responses across the nation. It has several working groups and dozens of members spanning government, regulatory authorities, industry associations and companies including the ­supermarkets and national ­retailers.

Between March and May the taskforce met almost 50 times and was crucial in co-ordinating industry reactions and acting collaboratively to meet the demands of panic buying experienced in the early weeks of the pandemic.

Now the taskforce is focused on ensuring adequate supply for Christmas as well as during the peak summer months that could be disrupted by bushfires, wet conditions and floods.

At the meeting on Wednesday, the supermarket industry was particularly updated during the phone hook-up on the possible wetter than normal weather conditions created by the La Nina climate event this summer that, while possibly ending drought conditions, could also cause ­cyclones and floods.

Supply chain disruption

The supermarket industry was warned it needed to be prepared for bottlenecks in parts of its ­national supply chain as possible floods and wet conditions cut off parts of the country, such as northern Queensland and parts of Western Australia.

Within the industry this has meant ensuring that adequate supply of fresh food and groceries were in the right locations before the worst of the summer conditions possibly hit.

Meanwhile, the leading members of the Supermarkets Taskforce continue to work on their COVID-safe protocols for warehouses and distribution centres to prepare for a lifting of stage-four restrictions in Victoria.

Last month the supermarkets warned the Victorian government in the state’s own industry taskforce that suffocating restrictions at key state grocery infrastructure, such as a limit on the number of workers during a shift, could run the risk of food shortages for Christmas.

The Victorian government’s heavy clampdown on workplaces — including the number of workers allowed in a single facility — was feared to be counter-productive to the aims of suppressing COVID-19 outbreaks, as disruptions to grocery supplies and empty supermarket shelves could force consumers to do more than the legally permitted once-a-day shop.

But those restrictions are set to be ease next month and the ­supermarkets industry hopes it can quickly ramp up supplies and capacity to avoid any food shortages for Christmas and disruptions to supplies over summer.