Workforce deficits in NSW and Victoria disrupt distribution centres, causing widespread product shortages
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Last modified on Thu 2 Sep 2021 13.32 EDT
Both major supermarkets are feeling the strain of the east coast Covid-19 outbreaks, with thousands of staff forced to isolate and positive cases at distribution centres leaving some supermarket shelves bare.
Coles’ chief operations officer, Matthew Swindells, told Guardian Australia that at last count, 1,800 staff in New South Wales were in isolation and 1,200 more in Victoria, confirming localised disruptions to supply were now commonplace.
“What you’re seeing is just this gradual reduction in workforce size in manufacturing, distribution and in stores. Depending upon which store you then go to, you can see material impacts in availability.”
Swindells said that while measures like segregating the workforce into “Covid bubbles” were mitigating the worst of the disruptions, distribution centre teams were being taken out of action and that had the most direct effect on supply.
“They’re what I would describe as tactical issues – they’re at a point in time, and then you can recover it. But we were just getting them more often, so customers and team members would see a higher frequency of issues in stores.”
Fortunately the shortages were generally short-lived, Swindells said.
“It moves quite quickly. We improved fresh food availability in NSW this week … but at the same time I know that there are 20 or so stores that, at a store level, got worse. And part of the challenge for the team is that could change again tomorrow. It’s a bit like supply chain whack-a-mole. But we just keep going.”
The Sydney outbreak, in particular, has necessitated a major overhaul of Coles’ distribution strategy.
“We have never used our national network to supply before … Normally the NSW DCs [distribution centres] supplies NSW stores and Queensland DCs supply Queensland stores,” Swindells said. “Right now we’re looking at every single state helping to supply New South Wales, including Tasmania. That’s unheard of.”
Woolworths has also reported around 3,300 staff isolating and out of action, with CEO Brad Banducci stating in an email sent to all customers that employees were “feeling the impacts of Delta very directly”.
Banducci confirmed its Sydney distribution centres – all of which are located in the western hotspot local government areas – have also been affected, resulting in stock shortages.
“You may have noticed some gaps on the shelf this week, or substitutions in your online order,” he wrote.
“Unlike 18 months ago, this is less to do with surges in customer demand (AKA ‘the toilet paper wars’) and more because of the extra pressure on our distribution centres, with over 500 of those team members needing to self-isolate as close or casual contacts. The good news is that these team members, having tested negative, are starting to be cleared to come back to work.”
A spokesperson for the Woolworths group confirmed this number was now down to “fewer than 200”. These disruptions have resulted in Woolworths automatically allowing product substitutions for NSW and ACT online orders due to “demand pressure”.
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“We know this isn’t ideal, but it does mean there’s less chance of missing out on an essential item. We’ll revert to your preference as soon as we possibly can,” Banducci wrote.
He also confirmed that the rollout of a new collectibles line, Bricks, would be delayed in NSW and ACT stores “to help those teams prioritise food and essentials”.
Looking towards the future, Swindells said that given the seemingly low rates of transmission in supermarkets and rising vaccination numbers, governments should start considering how contact tracing and isolation methods could be adjusted.
“We do need to start thinking about the processes and the risk versus the disruption … we don’t have a high number of people that contract Covid in the supermarket, nor do we have a high number of team members that contract Covid in a supermarket,” he said.
NSW Health recently stopped listing, or issuing blanket isolation orders for, every low-risk exposure site in greater Sydney, which often included supermarkets. Swindells said Coles was in close contact with every state health department but this change was not the result of these conversations.
The Coles executive also warned that Australia should “understand and learn from the ‘pingdemic’” overseas, referring to a period several weeks ago in the UK where the National Health Service contact-tracing app was “pinging” so many fully vaccinated people, telling them to isolate, that it caused workforce shortages, and potentially a drop in the app’s usage.
“They didn’t see the benefit of that vaccination plan,” Swindells said. “We need to learn from that and understand ‘what is our new norm?’… so when we are vaccinated, there is a return to some sense of normal operating standards. I think that’s the key.”
A spokesperson for Woolworth confirmed rapid antigen testing had now been rolled out across all Sydney distribution centres to help avoid outbreaks and that “more than 80%” of all NSW distribution centre staff had now had at least one vaccine dose.
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