Woolworths Group Ltd (ASX: WOW) shares have been hit hard in 2024 and are down nearly 20% so far this year.
The stock has been weighed down by concerns over legal action from the regulator, softer-than-expected financial performance, and industrial action threats.
Despite the challenges, analysts suggest a mix of cautious optimism and consolidation ahead for the supermarket giant.
What's next for Woolworths shares? Let's see.
Woolworths shares latest: Legal and industrial challenges
Woolworths is under scrutiny by the Australian Competition and Consumer Commission (ACCC) over alleged anti-competitive practices. These include misleading pricing and negotiations with suppliers.
The regulator has accused the company of misleading discounts and exploiting its bargaining power with suppliers. According to The Australian Financial Review, this is creating legal overhangs that could pressure the share price further.
Woolworths is currently fronting an inquiry led by the ACCC into the supermarket sector. Executives finished their second day of grilling from ACCC lawyers yesterday.
Meanwhile, the United Workers Union has threatened strikes at Woolworths' distribution centres, raising fears of "empty shelves" in the lead-up to Christmas.
Workers are demanding wage increases to keep pace with the rising cost of living, but Woolworths' current pay offers have yet to satisfy union demands, according to The Australian.
Woolworths has implemented contingency plans, such as increasing stock levels and redistributing resources across its network, to mitigate potential supply chain disruptions.
We shall see what the outcome here is (*chews popcorn*).
What are analysts saying about Woolworths shares?
Bell Potter analysts have given Woolworths shares a hold rating, noting that its FY25 outlook is one of "consolidation".
The broker highlighted headwinds in discretionary businesses such as Big W but expects the food business to remain strong. This comes as Australian households shift towards in-home consumption, it says.
It also noted Woolworths' significant investments in automation and customer fulfilment facilities, which could pave the way for future growth once operational costs stabilise.
Bell Potter has a price target of $31.75 on the stock, which is marginally ahead of its current trading price.
Foolish takeaway
Woolworths shares remain a mixed bag. On the one had, you have the stock heavily depressed in 2024. On the other, the business is catching multiple headlines for the wrong reasons. Finally, brokers are split.
What's clear is that the pressures of everyday living are being felt by all. Rising costs of food and groceries are a part of this debate.
In the last 12 months, the stock is down 14%.
