SYDNEY, AAP – Retail giant Woolworths has endured one of its most challenging trading periods following the emergence of the highly contagious Delta variant of COVID-19.

The supermarkets operator said its stock flows and operating rhythm were rocked by the scare in the first six months of fiscal 2022.

“The first half of F22 has been one of the most challenging halves we have experienced in recent memory due to the far-reaching impact of the COVID Delta strain,” chief executive Brad Banducci said on Tuesday in a market update.

He said the costs of trading in a COVID environment would affect first-half earnings.

Woolworths, which will release its first-half results in late February, expects to see a direct cost hit of $150 million in its Australia Food division in addition to direct costs of between $60 million to $70 million.


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Australian Food earnings before interest and tax are forecast to be between $1.19 billion and $1.22 billion, compared with about $1.33 billion in the same period in fiscal 2021.

Mr Banducci also saw challenges in Christmas trade, namely sourcing goods due to the supply chain difficulties of the pandemic.

“It’s not going to be an easy ride into Christmas,” he said during a call with analysts.

“We’ll have a white knuckle ride – not in demand, but in having the stock there for them to buy.”

Consumer electronics and some toys were proving difficult to source for Big W stores.

The retail giant will also book a bonus payment for staff of between $35 million and $40 million as a way of saying thank you for their efforts during the pandemic.

Shares in the company on the ASX were down 8.5 per cent to $37.08 at 1144 AEDT.