Australia's leading supermarket chain, Woolworths, announced on Monday that it has reached an agreement with unionized workers to increase wages, effectively ending the strike action that had disrupted service levels at its stores nationwide.

Last month, hundreds of workers began an indefinite strike over pay and working conditions at Woolworths' distribution centers, with initial negotiations failing to yield a resolution. The new agreement, endorsed by the United Workers Union on December 7, includes an 11% wage increase over three years and addresses concerns related to performance metrics, Woolworths said.

Following the announcement, Woolworths' shares rose nearly 2% to A$30.09 by 12:30 GMT, marking their largest intraday gain since November 19.

The industrial action resulted in significant financial impacts, with Woolworths estimating a one-time loss of A$50 million to A$60 million in its Australian food division due to lost sales and higher stock losses. The company also reported a cumulative sales shortfall of A$140 million since the strike began.

Woolworths expects its Australian food segment to experience continued sales and profit challenges in the second quarter as it replenishes stock levels in distribution centers and stores ahead of the busy Christmas season.

Phillip Kimber, executive director for consumer research at E&P Financial Group, viewed the resolution positively, noting that the wage increase aligns with Woolworths' anticipated annual growth of around 4%. "The sales and EBIT impacts appear to be one-off in nature. We will maintain our current forecasts until further updates in February," Kimber stated.

Operations have now resumed at Woolworths' four key distribution centers in Victoria and New South Wales, bringing an end to the industrial disruption.