Advisers
Learn
Newsletter
Offers
Podcast
About
  Back
~
2
min read
· Posted on
February 21, 2024

Woolies flags a big ($220 million) summer blowout and yup, that supply chain is still playing up

Woolies have been one of the biggest winners from the pandemic (kudos to panic buying toilet paper)...

What's the key learning?

  • After some big wins in the pandemic, Woolies has announced a $220 million cost blowout
  • Along with supply chain and COVID disruptions, Woolies had to fork out for direct COVID-safe costs and indirect costs like higher fuel prices
  • Direct costs are costs directly tied to a specific good or service, while indirect costs are difficult to attach to a specific product.

Background: Woolies have been one of the biggest winners from the pandemic (kudos to panic buying toilet paper). We're talking a 78% increase in net profits for the full-year to August.

What happened: Fast-forward to the first-half of the new financial year, and Woolies is singing a different (more solemn) tune. They've announced a $220 million cost blowout.

What else: It's all thanks to the ol' supply chain and COVID disruptions. On top of that, the company had to fork out for direct COVID-safe costs and indirect costs like higher fuel prices.

So what's the key learning?

💡Direct and indirect costs are the two major kinds of expenses that companies can incur.

💡We've got:

  • Direct costs: i.e. costs that can be directly tied to a specific good or service (like materials, supplies, wages)
  • Indirect costs: i.e. costs that are difficult to attach to a specific product (fringe benefits, rent and utilities).

💡So, personal protective equipment for production staff is a direct cost that Woolies incurred, while higher fuel prices is an indirect cost.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

Sign Up
A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
© 2024 Flux Technologies Pty Ltd and Flux Media Pty Ltd
All rights reserved.
Explore
HomeLearnPodcastAboutNewsletterFlux at WorkAdvisers
Offers
Home LoansSavings AccountsBank AccountsShare TradingCar LoansCredit Cards
Support
CareersContact usPrivacy PolicyTerms of Use
Disclaimer: Flux Technologies Pty Ltd (ABN 86 634 507 172) is an authorised representative (Representative No. 1283166) of Mozo Pty Ltd who is the holder of AFSL No. 328141. We also provide general advice on credit products under our own Australian Credit Licence No. 530103. The product information presented does not constitute an offer and we are not recommending or suggesting any particular product. Any product advice presented is of a general nature only, and is not to be taken as any sort of advice as it has not taken into account your personal circumstances, objectives, financial situation or needs. Flux may not cover all products available to you. Check out our Credit Guide and Financial Services Guide for more information.

All information contained in the Flux app, www.flux.finance, www.joinflux.com, app.flux.finance and any podcast of Flux Media Pty Ltd (ABN 27 639 804 345) is for education and entertainment purposes only. It is not intended as a substitute for professional financial, legal or tax advice. Flux Media Pty Ltd is the owner of the registered trade mark, 'What the Flux'. While we do our best to provide accurate information on the podcast, we accept no responsibility for any inaccuracies that may be communicated.
No items found.