WOOLWORTHS (SOUTH AFRICA) REPORTS POSITIVE TRADING UPDATE

PUBLISHING DATE

South Africa-based Woolworths has reported a positive trading update for the 26-week period ending December 27, 2020, with its performance driven by its food operations.

The retailer said group sales fell by 0.5% at constant currency terms but rose by 5.3% excluding exchange rate effects. Woolworths said the results showed the ‘improved trading momentum across all businesses over the final six weeks of the reporting period’.

COVID-19 continuing to impact on operating environment
Woolworths said its stores continued to feel the effect of COVID-19 restrictions at the end of 2020. This had led to ‘significantly reduced store footfall, particularly in larger shopping centres and CBD locations’.

Jon Wright, Head of Insight for EMEA at IGD, said: “In its home market, Woolworths said ‘weak macro and consumer confidence has been exacerbated by COVID-19’. 

“Despite the headwinds Woolworths said its food division ‘remained resilient’, with sales up by 10.9% in total and by 9.4% in comparable store terms. The company said its food division had seen further volume and market share gains, ‘driven by innovation, convenience and the focused price investment strategy’.”

Net space growth had added a further 0.4%. Underlining the positive impact it had enjoyed in the last six weeks of the trading period, the retailer said sales had risen by 12% in that period alone.

Woolworths said price movement was 7.1%, impacted by mix, while average product inflation stood at 4.8% over the period. Its previously announced programme of price investment on key lines remained a strategic focus and had, it said, been positively received by shoppers during the timeframe.

Positive influence from online sales
Woolworths said its online channel accounted for 2.2% of its food sales, following growth of 158.5% in the trading period. 

Wright said: “The expansion of its click and collect service and the trial of an on-demand delivery service had underpinned the channel’s growth during the timeframe.

“Despite the switch to online buying, Woolworths reported the gross profit margin at its food division was 0.2% higher to 24.8%. The retailer noted the increase came ‘notwithstanding further price investment, due to higher rebates, improved waste and distribution cost efficiencies’.”

As a result, adjusted operating profit rose 23.2% to €85.6 million, returning an operating margin of 8.2% for the half-year.

SPAR International
Meanwhile, SPAR International has highlighted the efforts made by SPAR Namibia, which is continuing to improve in-store facilities and services across its 30 stores to ensure customers nationwide enjoy a quality shopping experience.

The SPAR operator has been upskilling its retail teams in all service departments to provide support and assistance to customers, while boosting job satisfaction among team members. With a combination of three SPAR Express convenience stores, 22 SPAR and five SUPERSPAR Supermarkets, there are store formats to suit all customer types and shopping missions, the company said.

The larger SUPERSPAR Supermarkets offer in-store dining facilities, where possible, with barista coffee facilities completing the offer. Customers can also enjoy a wide range of freshly prepared meal solutions. In-store bakeries and butcheries in all SPAR Namibia supermarkets underscore the focus on fresh, as do the wide fruit and vegetable assortments.

Store upgrades
SPAR Namibia has invested in upgrading stores to include modern light fittings and attractive displays. In combination with the high-quality materials used, these fittings add to the store’s overall atmosphere and highlight the varied assortments on offer.

Digital signage is increasingly used to promote special offers and inform customers about premium products on offer.

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