Woolworths chief Brad Banducci could find himself on the outer with some members of the CEOs club after he called for an increase in retail workers’ wages to keep up with the rapidly rising inflation across the industry.
In retail giant’s third quarter trading update on Tuesday, Banducci said he backed the proposal from the Australian Retailers Association for a lift in the minimum wage in line with the Reserve Bank’s underlying rate of inflation when the next national wage review is handed down in June.
The underlying rate of inflation was 3.7% in the year to March according to the Australian Bureau of Statistics consumer price report at the end of April. the headline rate was 5.1%.
“Importantly, we want to acknowledge the cost-of-living pressures that are being felt by our customers and our team,” Banducci said in the statement.
“We also support the Australian Retailers Association’s position for an increase in team member wages that keeps pace with underlying cost-of-living increases.”
Banducci’s remarks are at odds with other retail bodies and fellow supermarket executives, with Coles’ boss Steven Cain warning last week of the danger of wages rising in tandem with inflation, as he called for an increase in immigration rates to offset rising prices.
Lifting immigration is favoured by many businesses as a way of putting a lid on wage rises. The problem is that immigration levels are low and will remain low with students and tourists from China unable to travel because of Covid.
In its third quarter trading update on Tuesday Woolworths reported inflation across its food business of 2.7%, lower than rival Coles’ 3.3%.
in the update Woolworths revealed a solid March quarter performance with rising 9.7% across the business to $15.1 billion.
This included comparable store growth of 4.4% at the company’s key supermarket division to $11.4 billion.
Woolies also said its online sales jumped 33% to $1.456 billion in the quarter, compared to the third quarter of 2020-21.
The company’s New Zealand Food business “had a very challenging quarter. The impact of Omicron, which was felt later in the quarter, led to supply chain disruption and out of stocks that peaked in March” Banducci said.
Total sales increased by 3.8% to $NZ1.861 billion ($A1.736 billion) despite lower item growth, with average prices increasing by 3.6%, and eCommerce sales increasing by 18.3% to a sales penetration of 13.6%.
Big W sales fell 3.5% to $989 million, “impacted by lower customer mobility early in the quarter as well as cycling growth of 18.3% in the prior year.” eCommerce sales increased 21.2% with sales penetration of 9.4%.
The mixed sales results made it a bit easier to understand why Banducci said the quarter had been challenging, with floods, supply chain disruptions and high levels of COVID-related absenteeism hurting the supermarket’s performance and standing with customers.
“The continued impact of Omicron as well as widespread flooding has resulted in another challenging quarter for our business and the communities we serve,” he said.
“Despite the unfailing efforts of our teams, high levels of COVID-related team absenteeism and the disruption to our broader supply chain resulted in inconsistent customer shopping experiences and negatively impacted our customer metrics.
“Pleasingly, in recent weeks, we have begun to see more stability across the Group but store stock service levels remain below normal levels.
Banducci pointed out that the timing of Easter negatively impacted reported sales growth but given the current volatility and COVID impact in both periods, but unlike other years “we have not reported Easter-adjusted numbers.”
Woolies shares edged up 0.3% at $US38.44.
