Woolworths bosses are giving up a third of their salaries to pay staff extra during the coronavirus lockdown

Woolworths has published a trading statement outlining how Covid-19 and the country’s lockdown are currently affecting its business.

The group said that the impact of the virus is being felt across all markets in which it operates ,and it is now ‘considering strategic options’ to best mitigate the impacts of the crisis and to ensure the appropriate robust response in this developing situation.

“In recognition of the challenging circumstances, the WHL Board, group chief executive officer and senior executive team members have decided to forego up to 30% of their fees and salaries over the next three months,” the group said.

“The savings arising from this will be used to provide additional financial support to staff who find themselves in extreme hardship as a result of the current crisis.”

The group said that it has also implemented a range of initiatives from alternative working hours to more flexible practices, including work-from-home, leveraging a full suite of technology tools.

“During the current lockdown period we will continue to remunerate all our staff, and those who are part of the essential workforce will receive an additional appreciation payment for the duration of the current lockdown period,” it said.

How Woolworths has been hit by the coronavirus lockdown

In line with the lockdown regulations, Woolworths said that it has temporarily closed its fashion, beauty and home stores and continues to operate only its food stores.

The group said that the majority of its food stores currently remain open and that it has strong supplier partnerships to ensure a consistent supply of products.

“The period immediately prior to the lockdown saw unprecedented demand on specific products that consumers considered essential. This demand has begun to moderate, as shopping patterns are re-set and as confidence in the food supply chain grows,” it said.

“Significant focus is being placed on our online business in order to contend with significantly increased demand.”

Sales in the four weeks to the end of March have increased by 27.6% on the prior comparable period compared to a growth of 7.5% in the preceding nine weeks of the second half.

Despite this jump, Woolworths noted that the shift of customer spend to essential products, as well as the compulsory closure of stores during the current lockdown period, will have a material impact on the segment’s results for the second half of the financial year.

“We are however encouraged by the growth of our online channel which remains available to customers, notwithstanding that order fulfilment can only be effected post the lockdown period,” it said.

Sales in the four weeks to the end of March declined by 27.8% on the prior comparable period, compared to a 1.9% increase in the first nine weeks of the second half of the financial year.

Woolworths said it expects these issues to extend to its financial services segment (WFS), which will be impacted by the closure of stores, drop in disposable income and lower interest rates.

“This combination of factors will reduce revenue and increase impairments for the second half of the financial year,” it said.

“We are currently considering debt relief measures, reassessing our risk appetite and parameters, making alternative payment opportunities available to our customers and reducing operating expenses.”

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