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2022-07-26

Woolworths points to massive growth in online food delivery in South Africa

The latest financial data from retailer Woolworths shows remarkable online growth in South Africa for both the food and fashion segments.


Staff Writer | Business Tech

The group on Tuesday (26 July) pushed out a trading statement showing a marginal (1.4%) increase in turnover and concession sales for the 52 weeks ended 26 June 2022, and 2.6% in constant currency terms.  Audited group results for the 52 weeks ended 27 June 2021, showed turnover and concession sales amounted to R85.9 billion.

Online sales in the current reporting period grew by 16.4%, contributing 12.4% to the group’s total turnover and concession sales over the year.

Woolworths noted that trade during the first half of the year was severely impacted by the extended lockdowns in Australia, and to a lesser extent by the civil unrest in South Africa, “which makes the full-year trading result non-comparable to that of the prior year”.

Trade during the second half showed an improved run rate across all businesses, with group turnover and concession sales growing by 4.9%, and 5.6% in constant currency terms, respectively, despite the impact of load shedding on the group’s operations in South Africa.

For its South Africa operations with fashion, beauty, and home accounting for 267 store locations, and food – 452 stores – Woolworths said that its FBH business grew second half turnover and concession sales by 6.5%, with full-priced sales growing by 8.8%, supported by new winter ranges, ‘market share gains in our must win categories’, and a stronger performance from the rest of Africa.

Sales for the full year grew by 5.4% and 7.3% in comparable stores, while trading space declined by 4.5%, supporting a double-digit increase in trading densities. Price movement averaged 6.0% over the full year and remains positively impacted by reduced markdown, Woolworths said.

Online sales, it said, grew by 13.2% and contributed 4.4% to South African sales. This was up from a year ago report for the 52 weeks to 27 June 2021 showing that online beauty sales grew by 114.4%, contributing 4.1% to overall sales.

Woolworths food division grew turnover and concession sales in the second half by 4.6%, with trading momentum improving throughout the period as Covid base effects eased.

Sales for the full year grew by 4.2%, and by 3.1% in comparable stores, “reflecting the impact of the high base and the return to out-of-home consumption, an increasingly competitive backdrop and low product inflation across key categories”.

Price movement averaged 3.5% for the full year, with underlying product inflation contained to 3.9%, as a result of continued price investment. Space grew by 1.8% relative to the prior year.

Online sales, it said, increased by 45.4%, contributing 3.2% of South African sales, “driven by the continued rollout of our on-demand online offering”. In the year-ago reporting period, online food sales grew by 117.9%, contributing 2.3% to local food sales.

Woolies Dash is the group’s delivery service available to customers who are within 5km of the store from which the service operates, with all deliveries charged at R35.


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