FOOD, fashion and beauty giant Woolworths (Woolies), said the third wave had been a setback for the group’s recovery in South Africa as it announced a 9.7 percent growth in sales for the year ended June 2021 compared to a year earlier.
Woolies, whose stores are spread across South Africa, New Zealand and Australia, said its food business continued to be the star performer with a 6.9 percent growth in sales and a 5.7 percent in comparable stores and online sales surged. The price movement was 5.2 percent and underlying product inflation was 4.9 percent.
The food business grew in both market share and volumes, despite the high base a year earlier as a result of panic buying as shoppers anticipated the first lockdown, said Woolies.
Food sales in the second half of the year grew by 3.2 percent and by 16.9 percent over a two-year period.
“While there has been some reversion in customer shopping behaviour, frozen foods and groceries continued to deliver growth. Due to the continued Covid-related trading restrictions trade in cafes, wine and beverages remains negatively impacted,” said Woolies. Online food sales were 117.9 percent higher and contributed 2.3 percent to food sales in South Africa.
Woolies said its fashion, beauty and home segment continued to lag behind and the Country Road and David Jones brands had been solid during the year under review.
“The sales performance at the Woolworths fashion, beauty and home business continues to be impacted by several factors, including the constrained environment, the decline in demand for formal wear, as well as our initiatives to streamline our private label offerings and rationalise unproductive space,”s aid Woolies.
Country Road Group delivered strong sales growth of 13.4 percent over the current year and by 15.3 percent in comparable stores, with second half sales up by 39.5 percent. Sales at David Jones were up by 2.3 percent and by 0.9 percent in comparable stores, with second half sales up by 17.1 percent.
Euromonitor consultant Christell Chokossa said tightened curfews certainly affected operating hours because it compels malls to close earlier, and therefore department stores like woollies. Also, the third wave likely reiterated fear factors. “As a result, shoppers in general and higher-income groups, in particular, tend to be more cautious when venturing into public areas. Besides, the combined effects of projected economic impact and the stagnating unemployment rates probably hindered spending confidence in the process,” Chokossa said.
Woolies, which was not spared during last week’s violent protests and looting, said the consequential level 4 restrictions had further dampened already-weak consumer confidence, which was expected to limit discretionary spend.
“Furthermore, the civil unrest and related widespread destruction of property will also negatively impact economic conditions, consumer sentiment and constrain our ability to trade in impacted areas,” said Woolies.
Woolies said 11 stores had been looted and severely damaged with nine of the 11 stores in KZN and two in Gauteng during last week’s mayhem.
“The rebuild and repair of affected stores is likely to take some time, following the assessment of the damage, and trading will be dependent on the resumption of supply, logistics, and operational activities at these stores,” said Woolies. Its rivals, Shoprite, Spar, Massmart and Pick n Pay were all impacted by the looting in KwaZulu-Natal and parts of Gauteng. Last week retailers including
Pepkor, Massmart, Mr Price, Clicks, the Foschini Group and Truworths also announced that their outlets had been affected and were they counting the cost of the looting and damage.
dineo.faku@inl.co.za
BUSINESS REPORT