Woolworths will prioritise Christmas food as it refills shelves following the warehouse strike

The three-week strike at Woolworths warehouses saw shelves go empty, now the retailer will focus on key Christmas food lines like cooking ingredients and snacks as it restocks shelves.

Woolworths is supercharging its supply chains and putting on extra staff to ensure it has key Christmas food and holiday groceries. Picture: Getty Images

Woolworths is supercharging its supply chains and putting on extra staff to ensure it has key Christmas food and holiday groceries on the shelf ahead of the holidays, with the supermarket conceding to suppliers it is unlikely to completely recover from the recent strike until the new year.

The nation’s largest supermarket has told its food and grocery suppliers that it will be prioritising “key foodlines for Christmas” and lifting delivery volumes by putting on more staff and additional team hours to replenish empty shelves, especially stores in Victoria and southern NSW where many shelves went empty due to striking warehouse workers.

To prepare for Christmas and New Year – a key trading period for supermarkets and especially as cost-of-living pressures means more families will be cooking at home rather than eating out for Christmas lunches and dinners -Woolworths is focusing on ensuring its shelves are full of household packaged foods, ranging from cooking ingredients to sauces, snacks and drinks.

In a letter to suppliers from Woolworths chief commercial officer Paul Harker, and obtained by The Australian, the supermarket boss said with industrial action now over at its four warehouses the supermarket was recovering with empty pockets in shelves being filled. But full recovery would take time.

“While we know the road to recovery will take some time, our immediate focus is on delivering a great experience for our customers this Christmas.

“As part of our recovery efforts, we have identified a number of work streams that will help us deliver Christmas and restore the confidence of customers in VIC, ACT and the Riverina district in NSW. These work streams will continue through to January and the Back-to-School trading period.

“Each day we are seeing improved on-shelf-availability. However, given the significant impacts of the industrial action we expect full recovery to take some time and at the moment our priority is on key food lines for Christmas.”

Woolworths chief commercial officer Paul Harker. Picture: Dallas Kilponen

The protracted strike of Woolworths warehouse workers, which lasted almost three weeks, saw empty shelves proliferate across Woolworths stores as food and groceries at key warehouses remained blockaded by a union picket line.

Earlier this month, Woolworths updated the market to the cumulative costs, revealing it was facing a $140m sales blackhole due to the 17-day strike at its distribution centres, up from the initial estimate of $50m in lost sales advised to the market earlier in the strike.

The strike is expected to slice as much as $60m from the earnings of its flagship Australian supermarket division. Woolworths eventually sealed a deal with the union, United Workers Union, agreeing to an 11 per cent pay rise for its workers over three years – although this was well short of the initial demand of a 25 per cent wage hike over three years.

Woolworths team members at the four Woolworths distribution centres that were recently the subject of the industrial action have all now voted in favour of the new enterprise agreements, and will now receive their new rates of pay and other benefits before Christmas.

However, Woolworths is still bearing the bruises of the strike in terms of the impact on its supply chain and consumer satisfaction, and this will take some time to repair.

To help mobilse the supermarket’s supply chain in the lead up to the busiest time of the year Woolworths has added more ‘work streams’ within the business which includes additional operating hours and team levels across warehouses, as well as utilisation of additional sites to enhance processing capacity. Woolworths is also allowing for additional team hours available to stores where needed to aid high volume restocking of shelves.

The supermarket has engaged state and local governments for flexibility with deliveries of stock out-of-hours where needed, although this has been used sparingly and infrequently.

Woolworths workers on a picket line at the Dandenong South Distribution centre. Picture: David Crosling

In a statement to The Australian, Mr Harker said that since this most recent communication with suppliers the supermarket operator had made “big leaps” in restocking stores through Victoria, ACT and southern NSW.

“Our supermarkets that were impacted by the industrial action have great availability of all your essential products, with availability close to 100 per cent, meaning our customers can easily complete a full grocery shop. Stock levels also remain high in all our stores nationwide.

“Across the country, we have everything in store and online that customers need this Christmas, with an ample supply of fresh fruit and veg, meat, seafood, award-winning Christmas hams, fruit mince pies and bonbons.

“Since the affected sites reopened just over a week ago, they have processed an incredible 7.5 million cartons of groceries, and more than 3,500 truck deliveries have been made to make sure shelves are fully stocked for Christmas.”

The strike at Woolworths warehouses rippled through the $120bn supermarket sector as shoppers opted to fill their baskets at other stores, causing some spill-on shortages.

Coles was forced to ask its food and grocery suppliers to ship more goods to its warehouses and put on more staff to handle the extra volumes as shoppers turned away from Woolworths and triggered a sales surge for Coles. Coles has also opened more checkouts at its stores to deal with the heightened demand and traffic through its stores as its largest competitor faced supply shortages.