Woolworths boss warns of potential stock shortages in Victoria by Christmas

The head of supermarket giant Woolworths Brad Banducci warned the Victorian government its stores in the state could suffer from stock shortages by Christmas if restrictions on grocery supply chains aren't eased.

Mr Banducci made the comments in an industry roundtable with the state government hosted by the Business Council of Australia on Wednesday night.

Woolworths chief executive Brad Banducci has warned the Victorian government about stock shortages in the lead up to Christmas.Credit:Louise Kennerley

The Age and The Sydney Morning Herald have been told by multiple sources that Mr Banducci warned the government if supply chains were not operating at 100 per cent capacity over the coming months, individual stores could start to see stock shortages across certain products, similar to what was experienced in March and April.

This could lead to broader shortages across the Victorian network as customers shop around to find what they need.

Supermarkets are currently running at reduced capacity in their distribution centres and warehouses due to the Victorian government's restrictions on supply chain operations which required businesses to drop staff by a third.

The industry secured some concessions from the government after they warned the restrictions could cause food shortages across the state, however, the retailers are now concerned on how the strained supply chains will cope with the Christmas rush.

Fred Harrison, who operates 50 independent IGA supermarkets in Victoria, said supply chains were currently "fraying at the edges" and voiced similar concerns to Mr Banducci.

"We're starting to see warehouses not keeping up with stock requirements," he said. "It is right on maximum, so any extra volume, which you normally get in the spring and summer, that's the problem."

"We're going to struggle for Christmas hams this year."

Mr Harrison said independent wholesaler Metcash, which supplies IGA stores, had raised similar concerns.

In a statement, Mr Banducci said Woolworths recognised Victoria was facing a "unique challenge" and was working with the government to reduce movement around the community to prevent the spread of the virus.

"As part of this, we’ve shared data-driven insights on anticipated shopping behaviour in the lead up to the busy Christmas season to help inform policy-making as it relates to our supply chains," he said.

"We remain committed to working closely with the Government to help reduce community movement wherever possible, while also ensuring Victorians have access to their essential needs in a COVIDSafe environment this Christmas."

Major supermarkets, including Coles, Woolworths and Aldi, were recently granted approval from the competition regulator to work together on issues such as food supply until March next year.

More to come.

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