Woolworths Food for thought
Alarming news from the Dapper One, which announced this week that it expected half-year profits to decline by up to 17.5%, driven thither by our shaky economy and ongoing political uncertainty, and by competition from new entrants H&M and Amazon down under. Woolies also let it be known that sales had grown just +2.5% for the period through December. Breaking this down, on the home front and relevant to our grocery retail readers, SA food sales remained the strongest performer, up +9.4%, while beauty and home declined -0.2%. Food retail space grew +6.8% year-on-year. In other, more positive Woolies news, the business has received kudos from researchers from Stanford for its ‘Farming for the Future’ initiative, by which farmers supplying Woolies are audited on various criteria, including soil management‚ water use‚ biodiversity‚ waste disposal‚ pest management‚ carbon footprint and environmental laws.
Comment: If we may be so bold: Woolies’ food offering is world-beating, and this is reflected in these otherwise worrying interims. Their clothing programme, conversely, is patchy, and appears right now to be something of a drag on the business.