Woolies pledges no price rises from increased freight costs due to floods, as concerns turn to supply shortages
By Jayne Munday | January 13, 2011
Woolworths claims higher freight costs from the Queensland floods will not lead to an increase in grocery prices, as concerns turn to stock levels and supply issues over the coming months.
With bread, milk, eggs, meat, poultry and produce running low, Woolworths says the major challenge continues to be the delivery of stock throughout Queensland.
The supermarket giant has so far closed nine supermarkets in Ipswich and Brisbane, and two Big W’s due to power outages and staff shortages caused by flooding that has left 75 percent of Queensland a disaster zone.
“We are working in conjunction with other major retailers and the Queensland Government on contingency measures to maintain supply of essential provisions to communities across the State by any means possible,” Woolworths said in a company statement this week.
“In terms of general product pricing, Woolworths will not raise any prices to offset the increased freight costs resulting from the floods.”
Stores to the north and west of Gympie are only receiving sporadic deliveries, while Woolworths assures the majority of Brisbane metro stores continue to receive daily deliveries.
However, coastal shipping options are limited given the closure of the Port of Brisbane, and many supplier production facilities in Queensland are also closed due to flooding, power outages and staff issues.
While a number of fruit and vegetable lines have been affected by flooding, the Queensland produce season has largely come to an end.
As a result, Woolworths does not expect there to be any broad impact on prices in the short term.
However, it remains concerned about the potential supply challenges in April and May when the Queensland season is due to recommence.