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Australian supermarket giant Woolworths plans to add another 7,000 employees in 2014 to its current 180,000 workers by opening 108 more new stores across the country.

Woolworths had opened 40 new stores in the past 6 months, and previously announced it would open 45 more. However, the number has been changed to 68 more.

The announcement is seen as an extension of the ongoing battle of the grocery giants as rival Coles also unveiled last week plans to open 70 more new outlets until 2017. With its additional investment of $1.1 billion in these new stores, Coles would create 16,000 new jobs.

Smaller grocers are trying to catch up with the two giants, with Alsi and Metcash expected to also open 30 new supermarkets yearly.

The 7,000 new jobs to be created by Woolworths would range from customer service positions to senior management level posts.

However, analysts have warned the store growth of supermarkets could be unsustainable. The ideal of new stores should only be 45 new mid- to large-format supermarkets a year, said Morgan Stanley analyst Tom Kierath.

But not all of the new Woolworth outlets would be groceries. Some would be liquor stores, Big W discount variety stores and home improvement chains Master and Home Timber & Hardware.

The Australian government, though, would surely welcome the creation of more jobs by the grocers given the worsening unemployment rate in the country which stood at 6 per cent in February even though 47,000 new jobs were added that month.

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With that addition, the unemployment rate should have gone down, but more Aussies were added to the ranks of jobseekers as the participation rate went up 0.2 per cent to 64.8 per cent.