Woolworths Group Ltd., Australia’s biggest supermarket operator, said some store deliveries are being delayed by “COVID-related impacts” on the supply chain. The Sydney-based company said staff and suppliers “are doing all they can to replenish stores as quickly as possible.”

A wave of coronavirus infections in New South Wales, Australia’s most populous state, is hampering deliveries from major distribution centers to suburban supermarkets. The state—which includes Sydney—has recorded more than 100,000 cases in the past five days. 

While the omicron variant appears less severe than previous strains, the sheer volume of infections is disrupting supply chains by grounding essential workers. The soaring cases follow an easing of restrictions in most of Australia, which for much of the pandemic had pursued a COVID-zero strategy while it distributed vaccinations. More than 90% of those over 16 are now fully vaccinated. 

Produce Shortages

In recent days, some Woolworths stores in Sydney had sold out of certain fruit and vegetables, and were running low on other fresh goods. Rival Coles Group Ltd. didn’t reply to an email seeking details on any product shortages. 

Australian businesses are already battling a labor shortage and the crisis is expected to worsen over the next 12 months, according to a survey of 1,600 firms by National Australia Bank Ltd. 

Around four in 10 Australian businesses view the crunch as a “very significant issue,” with the impact the most pronounced in Western Australia, where Premier Mark McGowan is yet to fully open the state’s borders, the survey found.

The most severe shortage was for trades workers, followed by professionals, sales workers, laborers and machinery operators and drivers, according to the NAB survey, which was conducted between Nov. 16 and Dec. 13.

Australian policymakers are hoping the labor shortages will finally spark a pickup in wages growth, which would help push inflation back within the central bank’s 2%-3% target band. The Reserve Bank has left its key interest rate at a record low 0.1% since November 2020.