Woolworths strike costs Dan Murphy’s, BWS owner Endeavour $25m in lost sales

The owner of Dan Murphy’s and BWS has so far lost $25 million in sales due to the 17-day strike at Woolworths distribution centres that led to stock shortages at the alcohol retailer and grocer.

Woolworths earlier this week flagged a $140m hit in lost food sales up to December 8, with about $90m added since the previous update when it flagged an initial impact of $50m.

Endeavour has followed suit and in a statement after the market closed on Tuesday said it had been “adversely impacted by approximately $25m”.

It warned sales would continue to be impacted while stores are replenished.

Woolworths provides warehouse services to Endeavour, including at two distribution centres in Victoria.

Endeavour was a spin-out of Woolworths’ liquor division and listed on the Australian Securities Exchange in June 2021.

“The full financial impact at this stage is unknown as it will depend on the time required to restore inventory levels in both our stores and distribution centres,” Endeavour said on Tuesday.

“The loss of sales from stock-outs may be exacerbated by the timing of the disruption, given the importance of December trading to the groupʼs first half result.”

Endeavour said the shut down of the facilities during the industrial action impacted stock availability in some stores, particularly in Victoria, Tasmania and southern NSW.

“To mitigate the impact, Endeavour group initiated a number of contingency plans including building inventory at stores, leveraging the wider distribution network and accepting direct to store deliveries from some suppliers,” it said.

Endeavour — which also owns hotels group ALH — said the one-off impact was not factored in the guidance provided last month.

Chief executive Steve Donohue said team members were working to replenish affected stores as soon as possible.

“I would like to thank our customers for their patience and our supplier partners for their support during the past few weeks,” he said.

Woolworths warehouse workers at four distribution centres in Victoria and NSW went on strike on November 21 seeking better pay and safety conditions.

One of the major issues was Woolworths’ new framework system that tracked workers’ productivity and logged their performance each shift using an algorithm.

Over the weekend, Woolworths struck a deal with the United Workers Union that will provide staff members with an 11 per cent wage increase over three years.

It’s well short of the 25 per cent pay increase the union had been seeking.

Woolworths is also estimating a one-off loss of as much as $60m in food segment earnings, but earlier this week warned the full extent of the financial impact was not yet known.

The strike action limited the availability of items such as nappies, toilet paper and drinks.