Woolworths has clarified reports the supermarket giant will fly Indigenous flags outside its 1400 stores across Australia in accordance with its Reconciliation Action Plan.

The supermarket giant said Thursday's media reports on its flag policy were incorrect, as a political brawl over the national day on January 26 intensifies.

Federal opposition leader Peter Dutton last week urged Australians to boycott Woolworths after the company said it would stop selling Australia Day products.

Woolworths confirmed on Thursday locations that already display the Australian flag will also show the Aboriginal and Torres Strait Islander flags "outside stores, sites and support offices where practicable", in accordance with the company's RAP.

"We don't plan to add flags outside our supermarkets," a Woolworths Group spokesperson said.

"The locations deemed practicable are those where the Australian flag is already flown.

"The three flags will be flown together at these select sites, just as they are in countless other locations, from primary schools to businesses and other institutions."

The company's main headquarters in north-western Sydney already flies the Australian, Aboriginal, and Torres Strait Islander flags, as do two of its other main national support offices.

Woolworths told the National Indigenous Times on Thursday afternoon it was adding the Aboriginal and Torres Strait Islander flags to sites that currently fly the Australian flag.

Its RAP flag policy did not refer to its stores across Australia, "as they were at shopping centres and other sites that don't fly flags".

"This line in our Reconciliation Action Plan refers to our plan to fly all three nationally-endorsed flags in our locations where the Australian flag is already flown - namely our support offices," a spokesperson said.

"We don't plan to add flags outside our supermarkets."

Woolworths said the specific statement in their RAP referred to displaying flags "where practicable".

Woolworths doesn't have flagpoles at any of the store sites it owns.

At other sites with Woolworth chains, such as shopping centres, respective landlords decide whether to fly flags outside their buildings.

Woolworths launched its RAP in May 2023 "in the belief that our actions will make a meaningful contribution toward reconciliation and closing the gap".

Its recent Australia Day merchandise decision was not related to its RAP.

Radio station 2GB and Sky News were among media outlets on Thursday to incorrectly report Woolworths would fly the flags outside its stores, in accordance with its RAP.