Endeavour Group loses $25m in sales due to Woolworths strike

Endeavour Group predicts sales losses of $25 million following Woolworths' recent warehouse strike action, with Dan Murphy's and BWS stores in Victoria, Tasmania, and southern NSW to be particularly affected.

Despite Woolworths Group selling off its last remaining stake in Endeavour Group in September, the supermarket group still provides warehouse services to the drinks business, including at two of the four distribution centres involved in the strike.

After 17 days, the strike action was officially resolved on Sunday 8 December, at which point the three Victorian and one NSW distribution facilities were reopened.

"I would like to thank our customers for their patience and our supplier partners for their support during the past few weeks,” said Steve Donohue, CEO of Endeavour Group.

“I would also like to acknowledge our team members in stores and in our support office who are working to replenish affected stores as soon as possible.”

On top of the estimated $25 in losses experienced over the last few weeks, Endeavour Group anticipates further impacts to revenue over the nearing festive period. In a statement issued to shareholders, it said the full financial impact at this stage is unknown, as it will depend on how smoothly the Group is able to restock inventory both in store and in the distribution centres.

Additionally, Endeavour also told shareholders that losses may be exacerbated by the timing of the disruption.

Woolworths Group has estimated a $140 million drop in sales over the period, and has outlined a similar forecast for further losses over the quarter.

"With just over two weeks until Christmas, we are now moving products out of the DCs and onto supermarket shelves as quickly as possible for our customers,” said Amanda Bardwell, Woolworths Group CEO.

“We are fully focused on restoring stock levels and getting products to stores where they are needed most, with stock levels to gradually improve as we seek to provide customers with a great shopping experience this Christmas.”

Tim Kennedy, National Secretary of the United Workers Union, said that all stock issues resulting from the strike could have been avoided by the supermarket group.

“In terms of shortages on shelves and Woolworths’ statements about the impact of the strike, we have consistently said that Woolworths is in a position to end this strike right now by agreeing to a reasonable outcome with workers,” he said.

“Today, warehouse workers at Woolworths have saved Christmas, but more importantly, they have challenged one of the most significant threats to worker safety and well-being as we enter a new AI-surveillance era of work. And they have won.”

The final resolution of the strike will see a wage increase of 11% for the Woolworths distribution centre team workers over the course of three years. Additionally, the resolution also addressed workers’ concerns about the Woolworths Framework, with a new clause to be added to workplace agreements that ensures that the workers will not be disciplined for the speed that they can work at.

“This dispute is important because it was about the right of workers to have input into how AI algothrimic systems can be used to set the speed of work to undertake surveillance at work, and ensure a system that is transparent, fair and respects fundamental humanness of people,” said Kennedy.

“Breaking the link between measuring the speed of workers and automatic discipline if they fall behind is a significant achievement of the workers, and a sign that workers will have a say about how work is regulated as we move from the industrial age to the AI digital age.”

Amanda Bardwell added, “we are pleased to have endorsed offers and a competitive wage for our team at the four Distribution Centres subject to industrial action over recent weeks.

"We would once again like to apologise to our customers for this disruption and thank them for their support. We know it has been frustrating shopping in our stores and online in recent weeks in Victoria, the ACT and parts of NSW. I would like to sincerely thank them for their understanding and patience."

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Steve Donohue reflects on final full year as MD, CEO of Endeavour Group