Industrial action in Victoria costs Woolworths 6.6% market share

Recent industrial action by Woolworths employees in Victoria proved challenging for the supermarket in December

Industrial action taken by Woolworths distribution centre workers in late 2024 has had a significant impact on the supermarket's results in Victoria for December. Initial action began in late November 2024, with the United Workers Union (UWU) going on strike at distribution centres across Victoria over an ongoing pay dispute. The action was ultimately resolved by December 7, but not before Woolworths, BWS and Dan Murphy stores across Victoria and Southern NSW were heavily affected by the supply disruption.

With external sources quoting an impact of up to $50 million in lost revenue as a result, Fonto's Market Metrics showed a material impact on market share and spend within the category.

Market share declined by 6.6 percentage points

The data for consumer grocery expenditure in Victoria told a clear story, with Woolworths losing 6.6% market share for the month of December (compared with December 2023). Coles (+2.1%), ALDI (+2.3%) and IGA (+1.7%) collectively picked up the gain between them with some relative differences in growth for each.

Share of wallet decreased 7.1 percentage points

Often used as an indicator of loyalty, Share of Wallet measures the proportion of total category spend by a customer with that specific brand.

For Woolworths Victoria, their share of the grocery wallet declined 7.1 percentage points from the year prior, with shoppers needing to find other options to meet their supply needs. Victorian consumers who shopped at Woolworths spent just 38.3% of their total grocery spend with the brand, down from 45.4% during December 2023.

Coles, ALDI and IGA customers meanwhile, increased the proportion of their December grocery spend with each retailer, lifting by 1.9, 3.4 and 4.0 percentage points respectively.

Average spend per buyer decreased by $52

The average spend per grocery buyer at each brand also told a clear story of the substitution effect between brands. While the average spend per buyer at Woolworths VIC decreased by almost $52 during the period when compared to December 2023, it increased at ALDI and IGA by $8 and $7 respectively.

Following on from our recent commentary on the benefits of competition in crowded markets, the data tells a clear story of the substitution effect created by supply chain issues for Woolworths in Victoria.

Fonto data

More than 85,000 Australians share their daily financial transaction data privately and securely with Fonto, allowing us to accurately understand their buyer behaviour over time. We also directly survey them shortly after purchases to better understand the 'why' behind their consumer behaviour.

For more information, contact us

Check other blog posts

See all posts