Woolworths warns of Christmas grocery shortages from cherries to potato crisps

Christmas favourites could be hard to find in the next six weeks as the boss of Woolworths warns shoppers to brace for fresh grocery shortages.

Woolworths chief executive Brad Banducci says heavy rain has compounded an ongoing supply chain crunch.

Woolworths chief executive Brad Banducci has warned of fresh grocery shortages six weeks before Christmas, saying heavy rain and floods across Australia’s east coast will limit the supply of festive favourites, including cherries and potato crisps.

In a letter to customers Mr Banducci said the supermarket chain was “working hard to make sure we have enough stock of everything” but warned there will be some gaps on shelves.

While past grocery shortages have been attributed to the Covid-19 pandemic, Mr Banducci said heavy rain was to blame for the latest supply crunch, capping off an “uncertain year”.

Cherries are on top of the list - with the rain delaying the start to the season - but Mr Banducci said another fruit should be plentiful: mangos.

“It’s just 46 days to Christmas and counting, with many of us looking forward to a much-needed break and time at home with friends and family. In many ways, Christmas remains a rare constant after another uncertain year, with Covid, floods, other natural disasters, and of course the growing pressures on the cost of living,” Mr Banducci said.

“As the La Nina rains continue on the eastern seaboard, we may see a delayed start to the season for some fresh fruit and vegetables, including cherries and stone fruits. The poor weather, especially in Tasmania, has also impacted supply of frozen vegetables, such as corn and potatoes, and potato crisps. In good news, mango season is upon us with more supply on the way.”

Brad Banducci says there will be plenty of mangoes to go around this Christmas.

Mr Banducci said the poor weather had “compounded ongoing supply chain challenges” and called for patience as Woolworths works to obtain more stock.

“We’re working hard to make sure we have enough stock of everything, but please bear with us if you’re currently seeing some gaps. The poor weather has compounded ongoing supply chain challenges - like shortages in raw materials, pallets and truck drivers - so it’s anything but straightforward.”

While some groceries will be in short supply, they will also be more expensive. Food inflation at Woolworths surged to 7.3 per cent in the three months to September 30, led by large price hikes in fruit and vegetables from the wet weather.

Mr Banducci’s comments are the latest in a series of “expectation setting” remarks business leaders have delivered in the lead up to Christmas.

Late last month Australia Post executive Gary Starr urged people to “get cracking on Christmas shopping” to avoid delivery delays.

It comes four weeks after Australia’s biggest fruit and vegetable grower and wholesaler, Costa Group, warned wet and cooler weather had hit its citrus division - the earnings of which will be “considerably lower than previously forecast”.

In a statement to the ASX, Costa said the “effort to produce a crop in challenging conditions” had meant it had spent more on labour as well as pest and disease and control.

“Adverse weather conditions, including both higher rainfall and cooler temperatures, have persisted. Despite harvest volumes being in line with budget, the previously reported lower quality levels across all citrus regions have continued which has resulted in considerably lower packouts as well as reduced volumes of first grade fruit for export,” Costa said.

“The net outcome to date plus the forecast for the balance of the citrus season is expected to translate into full year EBITDA-S (earnings before interest, tax, depreciation and amortisation) for the Citrus category that is considerably lower than previously forecast.”

But it is expecting overall earnings to be “marginally ahead” of last year’s result of $218.2.

“While we do not expect any additional material impact from recent heavy rainfalls experienced across the country, further downside risk is possible if extreme adverse weather continues.”

Costa said its avocado business should deliver “a modest gain”, following a fall in prices. Elsewhere, it said its berries, tomatoes and mushroom portfolios “perform in line with expected levels”.