Woolworths New Zealand plans to press on with workforce restructure as part of new operating model to be piloted in upper North Island stores

Woolworths New Zealand is planning to pilot a new store operating model in its upper North Island stores from late May as part of a workforce restructure.

The plan had been in a consulting period but the supermarket giant said on Thursday it had confirmed its operating model changes which now includes the closure of two Auckland stores.  

Woolworths said it had told employees at its Blockhouse Bay and Māngere Mall stores that the two sites won’t be included in Woolworths’ pilot of its new operating model. 

“The leases for both of these stores end later this year and we’ve made the difficult decision not to renew our leases in these locations. This is driven by declining customer demand locally, and considering the ongoing tough economic environment we believe the most responsible path forward is to consolidate in these areas,” a spokesperson said.

The Māngere Mall store will close in September and the Blockhouse Bay store will close in November. Woolworths did not say how many employees across these stores will be affected by the closures.

Woolworths described the key difference with its new operating model being store employees will be able to “collaborate together on tasks, rather than working separately in departments”. 

“This means more team on the store floor helping our customers, making sure the products they need are on the shelves, and improving our overall service,” the company spokesperson said.

Woolworths will be putting $6.6 million into the transition of the new operating model, which will be first piloted in Woolworths' upper North Island stores starting in late May.

The Australian-owned grocery chain, which makes up half of NZ’s supermarket duopoly, has over 185 stores and 20,000 employees across the country, 18,000 of which are store employees.

Woolworths said it had heard “a lot of useful and considered feedback” from Woolworths employees and Workers First Union which it had taken on board.

'Should not go ahead'

Workers First Union said the Woolworths restructure should not go ahead in its current form. 

The union, which has a collective agreement with Woolworths that covers workers in its stores, said the restructure will result in a reduction in income for thousands of Woolworths employees due to the disestablishment of all department management and duty supervisor roles.

Workers First Union’s national retail secretary Rudd Hughes said over 4,400 Workers First Union members would be impacted by Woolworths redundancy proposal in one way or another.

“A bakery or butchery manager will potentially face a decrease of about $15,000 to $17,300 per year, while other department managers will face average pay decreases ranging from nearly $10,000 to $11,700 per year under this proposal,” he said.

While some people in disestablished roles will opt for redundancy, Hughes said it won’t be a viable option in stores based in smaller or more remote regions where there aren’t comparable jobs on offer.

The union is calling for Woolworths to protect the existing pay and conditions of staff in roles due for disestablishment.

‘“Woolworths have the right to pursue a restructure on their own business grounds, but they have not taken on board the most important concerns of workers and are pushing to the same conclusion they’ve always sought – reduced operating costs,” Hughes said.

The union plans to continue engaging with Woolworths over several remaining issues related to the workplace restructure and said it will be supporting individual union members through any redeployment or redundancy process.