Woolworths underpayment hits pub, liquor store staff; virus to affect annual profit

Sydney

TOP Australian grocer Woolworths Group Ltd revealed on Tuesday that it had underpaid staff at its pubs and liquor stores division and forecast a decline in annual profit as a Covid-19 shutdown hammered non-supermarket sales.

The embarrassing admission from one of the country's best-known companies follows revelations last year that it had underpaid staff at its supermarkets, and follows similar confessions recently from other giants of corporate Australia.

Woolworths CEO Brad Banducci attributed the underpayments to the complexity of wage regulations, telling analysts it would be an "issue for every major corporate in Australia".

It is the second time this year that the Sydney-based employer of 115,000 people has upped its expected reimbursement bill. Woolworths said it now expected to pay A$390 million (S$376 million) in staff backpay, up from the A$315 figure it gave months ago.

Underpayment scandals have also hit Woolworths' supermarket rival Coles Group Ltd, Commonwealth Bank of Australia and Qantas Airlines Ltd in the past year.

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Woolworths said Australian grocery sales had remained elevated in the June quarter so far, up 8.6 per cent on the same period a year earlier, although that was off the 11.3 per cent spike in the March quarter when coronavirus lockdowns sparked panic buying.

Overall sales were affected by shutdowns of more than 300 pubs run by its ALH division, which the company expected to produce less than half the annual pre-tax profit of the previous year. Annual operating profit for Woolworths would likely come in between A$3.20 billion and A$3.25 billion, compared to the previous year's A$3.29 billion, it said. REUTERS