Sunrise host Nat Barr loses it at Woolworths boss on live TV as she confronts him about major Australia Day ba

Sunrise host Natalie Barr has accused the CEO of Woolworths of trying to make a political statement about Australia Day - prompting the supermarket boss to insist he isn't trying to 'cancel' the national day.

The supermarket giant shocked customers earlier this month when it announced it would not be stocking January 26 merchandise due to declining demand and sensitivities around the day.

In response to the public backlash, the retailer has since taken out full page newspaper ads with a letter penned by the boss insisting the retailer is not anti-Australia Day.

'We aren't trying to 'cancel' Australia Day, rather Woolworths is deeply proud of our place in providing the fresh food that brings Australians together every day,' Woolworths chief executive Brad Banducci wrote. 

The South African born chief executive copped a grilling from Barr when he appeared on Sunrise on Wednesday morning.

'At the end of the day is it your role to tell Australians what they can and can't buy?,' she asked.

Woolworths chief executive Brad Banducci has responded to criticism over the Australia Day merch

In his response, Mr Banducci took a swipe at rival retailers who had slammed Woolworths move.

'The great thing about retailers is that we all make different decisions about what to stock- they've made their decision and we've made ours,' he said. 

'We are focused on providing great value around everyday needs so you can mark the occasion and celebrate the Australia Day long weekend with friends and family. That is our focus.'

Barr asked if there was more to the decision, which Mr Banducci denied, insisting the decision was a commercial one rather than political.

'It is more than that, on this subject, isn't it? It is making a political statement by not stocking Australia Day merch?' Barr asked.

Mr Banducci hit back: 'I don't think that is true.

'We're focusing on what we do best, which is food and everyday needs. 

'There is pressure out there on Australian families and affordability, so we focus on what we do best which is that.'

Barr also took Mr Banducci to task over the newspaper ads, and why the supermarket felt the need to do that.

'It doesn't sound like it has gone down well,' she said.

Woolworths boss  Brad Banducci (right) insists the move was not political but a commercial one

Woolworths issued a full-page newspaper ads in response to the fallout over the decision not to stock  Australia Day merchandise

Mr Banducci defended the ads but conceded communication with shoppers could have been much better.

'It has not gone down badly. It is a decision that we made collectively as a team,' he explained.

'But I do worry for people who feel frustrated, who perhaps don't fully understand our message, there is a risk of them taking out frustrations in store with hard-working staff.'

'I thought it was important to restate our position.

'We hadn't stated it as clearly as with should at the beginning. That is the problem going into Australia Day.'

'If nothing else comes out from this, the clear message is, treat our team with the respect they deserve.'

Mr Banducci added that Australia Day merchandise sales have declined in recent years.

'That space in our store has been shrinking,' he said.

'I'm a deeply grateful first generation Aussie and I'm going to celebrate in the classic way, which is going to a barbecue with friends and family,' he told Barr.

Today show hosts Karl Stefanovic and Sarah Abo (pictured) also grilled the Woolworths boss 

Woolworths insists it decision to strip shelves of Australia Day merchandise was a commercial one with declining sales in recent years

Earlier on the Today Show, Mr Banducci dodged a key question from host Karl Stefanovic.

'So you're not anti Australia today as a company?' Stefanovic asked. 

'Karl, we are a very proud Australian company. We've been around for 100 years. We have 178,000 hard working team members who are going to be in store doing the right thing for our customers on Australia Day, and we're passionate about this country,' Mr Banducci said.

'But you're not anti Australia Day?' Stefanovic asked again.

Mr Banducci hit back saying it 'means different things to everyone' and the supermarket leadership support Australians to commemorate the day in whatever way they wish.

'You must have serious regrets about this?' Karl drilled in.

'I think we could clearly have done a better job of explaining our decision, that's why I'm here,' Mr Banducci replied.

The supermarket giant insist it's not anti-Australia Day or trying to cancel the public holiday

The Woolworths boss says he looks forward to celebrating Australia Day on Friday, just like millions of other Aussies

'I do feel anxious about the impact that this is having on our team. They are proud, hard working Australians, and for them to be seen as anti-Australian or woke is fundamentally unfair.'

Liberal senator Matt Canavan spoke out in response to the Woolworths boss' comments later on in the show.

'Brad is a man under pressure, Woolworths is under pressure and thank you to all Australians for standing up against these unelected corporate elites who think they can dictate at what should happen in this country,' he said.

Senator Canavan believes the retail giant is 'clearly trying to make a political statement' about Australia Day.

Other retailers including Aldi and Kmart have also revealed they will not stock Australia Day merchandise, but rival supermarket chain Coles will continue to sell the items.