From a 1930s dining hall to one of the biggest household names in South Africa
When talking about South African retail giants, Woolworths often comes to mind for many, with the 92-year-old retailer sporting a market cap of nearly R63 billion across 11 Southern African countries.
However, the retail giant specialising in food, fashion, beauty, and home has come a long way from operating out of a dining hall in Cape Town.
Woolworths South Africa’s origins can be traced back to Max Sonnenberg; an immigrant originally from Kaiserslautern, Germany.
Two of his uncles, Charles and Isaac emigrated to Griqualand West (now part of the Northern Cape) to join the early diamond mining industry there, and Sonnenburg’s family persuaded him to follow their example in 1891.
Upon moving to South Africa, Sonnenberg dipped his feet in numerous sectors: being a politician, a Member of Parliament (MP) in the Jan Smuts Government, a trader, and most notably, an entrepreneur.
Of his many ventures, he had a vision to create a store that offered high-quality goods at affordable prices, a concept inspired by a successful American retail chain, the now-defunct Woolworths.
Thus, alongside his son Richard, the Sonnenbergs opened the doors to the first Woolworths in Plein Street, Cape Town, in the dining room of the recently closed-down Royal Hotel.
The first Woolworths store sold a wide range of products such as haberdashery, jewellery and tools. Customers could not walk around the shop and browse but were rather assisted from behind the counters.
Despite the havoc that plagued global economies due to the great depression, Woolworths kicked off in South Africa.
Three years after the opening of its first store, a second branch opened in Durban.
It was clear that the new business had the potential to expand nationwide, except for a lack of capital.
Sonnenberg’s friend Elie Susman put up the money for the expansion of the business into the Transvaal and became Sonnenberg’s business partner, with another two stores opening in Port Elizabeth and Johannesburg a year later.
In 1936, Woolworths listed on the Stock Exchange, with shares costing R2 each.
Max’s son, Richard succeeded his father as chairman of Woolworths and forged an agreement with British store chain Marks & Spencer to sell Woolworths’ merchandise on an expanded basis. (According to another source, it was Max himself who signed a different agreement in 1947).
By the late 1940s, South Africa’s textile industry was dominated by a focus on blankets. Woolworths wanted to change this, and in 1952, the company expanded its business by investing in textile industries and investing in their own mills.
In 1953, Woolworths became one of the first large retailers to speak out against the Apartheid government.
When the Apartheid government passed the Amenities Act, which outlined that there must be separate amenities for different races, Woolworths took a stand by refusing to have separate amenities on their premises.
Former Woolworths CEO Simon Susman said that “it was the result of a deeply based value system that to this day directs our actions. Doing what is right, not what we are told.”
Innovation continued in 1960, with Woolworths becoming the first retailer in South Africa to stamp use-by dates on food.
In 1974 Woolworths also became the first South African retailer to introduce sell-by dates on food packaging. They were also the first retailer to offer pre-washed lettuce and machine-washable wool.
From 1982, Woolworths ditched the Princess Lables, and began promoting their private labels for food and fashion.
In 1987, Woolworths opened its first store outside of South Africa in Francistown, Botswana, and in 1994, Woolworths launched its store card and established Woolworths Financial Services in 2000 with Barclays Bank.
Woolworths advanced convenience retail by becoming the first major South African retailer to offer products in the 24-hour convenience market, sporting dozens of Woolworths food outlets at Engen garages nationwide.
Woolworths Holding Limited (WHL) acquired Country Road Group in stages between 1997 and 2014, expanding it into a diverse lifestyle brand with additional acquisitions of Trenery (2009), Witchery (2012), Mimco (2012), and Politix (2016).
In 2014, acquiring David Jones disrupted Woolworths’ investment case. While resources were diverted to Australia, the food division thrived, surpassing its cost of capital and gaining market share.
In March 2023, WHL sold David Jones, significantly reducing liabilities and reallocating capital. In April 2024, Woolworths acquired a 93.45% stake in Absolute Pets, enhancing its position in South Africa’s pet care market.
Woolworths has come a long way from operating out of a former dining hall in Cape Town, now sporting group revenue of R76.5 billion in the year ending 30 June 2024 and a market cap of nearly R63 billion.
It operates in South Africa and a further ten countries in Southern Africa, employing 32,675 people and 3.2 million active loyalty members.
When speaking about what they think has contributed to their longevity, Woolworths wrote that the company’s rich heritage, focus on the community and constant innovation are the main reasons as why it remains such a large retailer.
“At Woolworths, we really pride ourselves on our rich history. I think the South African market really identifies with that.”
“Our core values give us a competitive edge because you can really see the impact we have made in the country.”
“So, for instance, we were among the first local retailers to provide our employees with benefits that weren’t offered by some of our competitors at the time, such as a pension fund, medical aid and maternity leave. I think our customers really identify with that,” they added.
Additionally, they say that “not only do we pride ourselves on our hygiene standards and high-quality products, but we also make sure that we take care of you as a customer when you walk into one of our stores.”
Director at Woolworths South Africa Zyda Rylands previously wrote that “I think Woolworths isn’t afraid to take leaps and to push boundaries in the company.”
“That’s another characteristic of the business; we’re not afraid to challenge ourselves. We don’t just accept that we’re a market leader; we’re constantly researching and reinventing how we can optimise it and make it better,” added Rylands.
Read: The international food chain that became a South African icon
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