Business

Woolworths is making a big change in South Africa

Jonathan Hoyle

 ·2 Sep 2026

Woolworths says it will be “reorienting” itself around its Food business, which is outperforming its other segments and giving it a major competitive edge in the South African grocery market.

The group reported modest growth in earnings for the year ended June 2026, with its Food segment outshining its other businesses.

Woolworths operates in several retail sectors in South Africa and abroad, including food, clothing, and homeware.

The company has a major footprint in the country, with over 34,000 employees in its South African operations.

In the 2026 financial year, Woolworths saw its turnover increase by 4.3% year on year to R84.5 billion, with growth in every business segment.

Its Earnings Before Interest, Taxation, Depreciation, and Amortisation (EBITDA) also grew modestly, by 2.8% to R8.9 billion.

Woolworths had a slight drop in its earnings per share, which decreased to R2.63, but headline earnings per share (HEPS) rose to R2.82 from R2.68.

One of the group’s best-performing segments was its Woolworths Food section, which increased its turnover by 5.7%.

The group said it had also made “continued market share gains” in South Africa’s grocery and supermarket industry.

The growing market share comes as Woolworths has opened 13 new grocery stores in South Africa, increasing its total trading space to over 291,000 square metres.

While its food sector grew strongly, other areas, such as its home and beauty segment, saw only modest growth.

This segment increased its revenue by R650 million year-on-year, representing a 4.3% rise to R15.8 billion in revenue for 2026.

Country Road, an Australian fashion brand owned by Woolworths, returned to full-year profitability in 2026.

The group said this was due to benefiting from repositioned brands, a deliberate focus on sales quality, and the business’s reset operating model, which reduced costs.

Following Woolworths Food’s outperformance, the company said it would focus on repositioning itself in the food sector, given the segment’s strong performance.

The group said it would be “reorienting around its market-leading premium Food business – its strongest competitive advantage and primary engine of both brand equity and value creation.”

“Carefully selected adjacent categories will strengthen the customer proposition and the group’s own ecosystem.”

As part of the Group’s reset to reorient around its Food business, the group said that its Home and Beauty categories will act as an extension of Food into a broader lifestyle proposition.

Still room for improvement

Despite the solid results, the group’s CEO, Sam Ngumeni, said there was more to do.

“While our results reflect the resilience of our portfolio and the strength of Woolworths Food, it is not where we want to be,” Ngumeni said.

“We are clear on the opportunities and the actions required to unlock greater value, and we are moving decisively to improve performance across the group.”

“We have already made progress, and that stands us in good stead for the year ahead.”

Woolworths said that, despite a strong start to the financial year, the war between the United States and Iran created a difficult trading environment.

It said that the war’s knock-on effect on consumer fuel prices raised inflation concerns in South Africa, muting consumer spending.

“The war in the Middle East drove higher fuel prices and inflation, weighing on consumer confidence and demand while adding to operating costs,” it said.

“The resumption of interest rate increases in both South Africa and Australia further constrained household spending, with consumers placing greater emphasis on promotions and essential purchases.”

The Woolworths Financial Services division also posted solid results for 2026, with the book growing by 5.6% year-on-year to the end of June 2026.

But this, too, was impacted by the war.

“The deteriorating macroeconomic environment in the second half resulted in higher impairment coverage, with the annualised impairment rate for the year increasing to 7% from 6.1% in the prior period,” Woolworths said.

Woolworths’ financial services section ultimately contributed R228 million in profit to the group, a 5.6% year-on-year increase.

Woolworths 2026 financial results