How Woolworths’ brand reputation could be impacted by warehouse strike

After filing more than 2200 individual disputes with the Fair Work Commission to dispute Woolworths’ new productivity framework, 1500 warehouse workers have been on strike since November 21.The United Workers Union is asking for a pay rise and the abolishment of the productivity framework that mandates disciplinary action if warehouse workers fail to achieve a 100 per cent score for every task they complete.But according to one industry expert, the current UWU strike should not be viewed as an isolated incident separate from Woolworths’ other headline-making actions and allegations this year. “The strike is yet another symptom of big supermarkets myopically pursuing profit,” Jim Ritchie, strategy director and partner at brand agency US+US, told Inside Retail.“Woolworths’ inability to ‘read the room’ shows a lack of empathy for everyday people and a failure to grasp current customer sentiment,” he continued.While the UWU’s strike is advocating for workers’ rights, it could give consumers another reason to question if a supermarket duopoly is benefitting them.An already fragile reputation smearedAs reports of empty shelves and stock shortages at some Woolworths stores circulate, consumers’ attention is once again being drawn to the alleged profiteering of “The Big Two”.According to Ritchie, Woolworths has found itself in a “toxic trifecta” if the aforementioned events are viewed from a reputation management perspective.“Woolies is accused of rorting its customers, not paying their workers fairly, and presiding over empty shelves. Not a good look at all,” he stated. From Ritchie’s perspective, Woolworths’ current hardline stance against workers is only further reinforcing the public perception that the company consistently prioritises profits over people. “[Woolworths] has, by its own actions, placed itself squarely at the centre of a societal debate about wage stagnation and the cost-of-living crisis. From here, it has some serious bridges to rebuild,” emphasised Ritchie.In a statement to the media, United Workers Union national secretary Tim Kennedy highlighted the rising cost of living as a key reason these pay increases are needed.“A safe workplace that treats workers as humans, not robots, and fair pay increases to help workers survive the ever-growing cost of living, is what is needed to end this strike,” stated Kennedy.“Woolworths have been gouging families at the checkout and gouging workers in their pay packet for too long – it’s time they shared the profits around,” he added.Consumer sentiment is contagious The strength of the duopoly means that Coles could become roped into the public discourse over employee wages, despite not being involved in the strike.“And this isn’t good news for Coles either. Woolies might be in the limelight, but the close association between the two brands in consumers’ minds means the fallout is contagious,” Ritchie continued. As Woolworths and Coles duke it out to outdo each other at the bottom of Roy Morgan’s most trusted brands list, German-born Aldi has prevailed as Australia’s most trusted supermarket.When it comes to “The Big Two”, consumer sentiment remains low.“Beyond crumbling consumer sentiment, Woolworths – and Coles for that matter – will be wanting this issue resolved as positively as possible,” Ritchie concluded.“In the wake of the ACCC actions, there were some quiet murmurs that the government might consider breaking up the duopoly – if public sentiment continues to sour at current rates, those murmurs could grow much louder,” he added.