Woolworths and Big W will not sell Australia Day-themed merchandise in their stores this year with "broader discussions" surrounding the date cited on announcing the decision.

A Woolworths Group spokesperson confirmed no additional themed merchandise would be sold in its supermarket or Big W physical stores ahead of the public holiday.

The group said there has been a "gradual decline" in demand.

Similar products are available for purchase on the group's online homewares store MyDeal through third party sellers.

"While Australian flags are sold within BIG W all year round, we don't have any additional themed merchandise available to purchase in-store in our Supermarkets or BIG W ahead of Australia Day," a Woolworths Group spokesperson said in a statement.

"There has been a gradual decline in demand for Australia Day merchandise from our stores over recent years. At the same time there's been broader discussion about 26 January and what it means to different parts of the community."

"We know many people like to use this day as a time to get together and we offer a huge variety of products to help customers mark the day as they choose.

"Woolworths and BIG W celebrate the best of Australia every day, and we're proud to support the farmers, producers, and suppliers who work with us."

The company's move follows Kmart, who dumped Australia Day merchandise from its stores last year.

Major competitor Coles is understood to be selling a "small range" of date-themed merchandise this year.

Woolies retail staff have the option not to work on the day, via regular company policy on public holidays, while support office teams will take the public holiday.