Despite a challenging trading environment, Woolworths has seen sales growth for the 20 weeks ending 12 November 2023. <\/p>\n\n\n\n
The group’s turnover and concession sales from continuing operations (i.e. excluding David Jones, which was disposed of in the prior period) grew by 4.7% and 3.9% in constant currency terms. <\/p>\n\n\n\n
“This is notwithstanding an increasingly challenging macro-economic backdrop, given the sustained effect of interest rate increases and higher living costs, which are negatively impacting footfall and discretionary spend in both geographies,” the group said. <\/p>\n\n\n\n
“In South Africa, our business operations were further disrupted by a number of external factors, including the Western Cape taxi strike, congestion at the ports, and the impact of Avian flu on the availability of key product lines.” <\/p>\n\n\n\n
When including the contribution of David Jones in the prior period, group turnover and concession sales on a total basis dropped by 22.4%. <\/p>\n\n\n\n
Despite the difficult macro environment, the group said that it remains focused on profitability trading its businesses, which should be supported by robust trade plans going into the festive season. <\/p>\n\n\n\n
Local operations <\/strong><\/p>\n\n\n\n “The economic environment in South Africa remains weak, exacerbated by the country\u2019s energy crisis, which continues to have a pronounced impact on both business and consumer confidence,” the group said.<\/p>\n\n\n\n “However, our unwavering commitment to quality, the ongoing investment into our value proposition, and our intensified focus on execution has further strengthened the trust customers place in our brand.”<\/p>\n\n\n\n The group’s food business showed underlying growth, with turnover and concessions sales up 8.4% and 7.2% on a comparable basis. <\/p>\n\n\n\n This is in spite of the Avian flu outbreak, which has reduced the availability of eggs and poultry. <\/p>\n\n\n\n Online sales increased by 46.2% – 5% of total South African sales – mainly due to increased use of Woolies Dash. <\/p>\n\n\n\n “Whilst the Fashion, Beauty and Home business continues to make steady progress against its strategic priorities, sales performance in the latter part of the 20-week period was impacted by the late arrival of certain summer ranges, arising from congestion at the ports,” the group said.<\/p>\n\n\n\n Turnover and concession sales in this business grew by 1.4%, with comparable store sales in line with last year. <\/p>\n\n\n\n Although net trading space declined by 0.2% from the prior period, online sales grew by 23.0% and contributed 5.2% of South African sales. <\/p>\n\n\n\n The Woolworths Financial Services Book also showed a year-on-year increase of 10.7% at the end of October, primarily due to new accounts and credit card advances. <\/p>\n\n\n\n “The annualised impairment rate for the four months ended 31 October 2023 was 7.5%, compared to 6.2% in the prior period,” the group said. <\/p>\n\n\n\n “While this reflects the strain that consumers are under in the current macro-economic environment, it is reducing from the peak of the last quarter of the previous financial year.”<\/p>\n\n\n\n Country Road Group <\/strong><\/p>\n\n\n\n South Africa is not alone in its difficult trading conditions, with the challenging situation in Australia and New Zealand resulting in a decline in the group’s retail sales. <\/p>\n\n\n\n Country Road Group sales dropped by 8.1% and by 10.7% in comparable stores, but this comes off a particularly high base where sales increased by 36.2% following the end of the Covid-19 lockdowns. <\/p>\n\n\n\n “We are making good progress in the expansion of our wholesale and concession offering in support
of our growth agenda. Trading space increased by 4.3% during the period, while online sales contributed 26.0% to total sales, broadly in line with the 25.8% contribution in the prior period.” <\/p>\n\n\n\n
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