Woolworths kissed R13.84 billion goodbye

Woolworths’ market capitalisation has fallen by R13.84 billion since the start of 2026, with its latest results sending the share price falling again.

On Wednesday, 2 September, Woolworths released its results for the 52 weeks ended 28 June 2026.

These results revealed that Woolworths’ full-year performance was hurt by a sharp second-half slowdown.

While revenue was up 4.02% and turnover and concession sales were up 4.35%, the retailer’s profit for the year dropped 5.05%.

This was attributed to the war in the Middle East, which drove fuel and inflation higher, dampening consumer confidence and demand while increasing input costs.

“This, coupled with the resumption of interest rate increases across South Africa and Australia, saw consumers increasingly prioritise promotional offerings and essential purchases,” the group said.

In response to these results, Woolworths’ share price dropped by 2.25% on Wednesday, extending its year-to-date plunge to 25.32%.

This means Woolworths has seen its market capitalisation decline by R13.84 billion since the start of January 2026, to R40.68 billion.

Despite this decline, Woolworths remains South Africa’s second-largest grocery retailer by market capitalisation, behind Shoprite’s R183.23 billion valuation.

Woolworths’ share price decline has been driven by investors’ frustration with the retailer’s struggling Fashion and Australian units.

For the 2026 financial year, Woolworths reported positive sales growth across all business segments, but most divisions saw declines in before-tax profit.

This includes Woolworths’ crown jewel, its Food business, which grew revenue by 5.55% but saw its before-tax profit dip 1.13%.

The Fashion, Beauty, and Home (FBH) segment saw revenue grow by 4.32%, but its before-tax profit dropped by 45.63%.

The Country Road Group did not follow this trend, with its revenue declining by 1.79% while its before-tax loss improved by 80.93%.

Woolworths also announced in its 2026 results that it plans to reorient its business around the Food division, with the other segments treated as adjacent.

However, this reorientation and signs of recovery at Country Road Group were not enough for some investors, and Woolworths’ share price fell following the release of these results.

Analyst opinion

Sanlam Private Wealth equity analyst Kgomotso Mokabane told Daily Investor that Woolworths’ plan to reorient its business toward the Food division makes sense.

“A stronger orientation towards Food makes strategic sense because the high frequency of customer touchpoints makes it Woolworths’ most dependable business,” he said. 

However, Mokabane noted that additional capital does not automatically translate into profitable growth. 

“Woolworths will need to defend its differentiation as competitors strengthen their convenience, fresh produce, and premium food offerings,” he said. 

Woolworths has historically operated like a monopoly in the premium grocery retail sector, but this has changed in recent years.

Competitors like Shoprite’s Checkers have encroached on Woolworths’ territory, and the success of its Sixty60 offering has heightened competition for higher-income consumers.

Therefore, Woolworths finds itself in a defensive position where it must hone in on its competitive advantage, which is the Food business.

“The strategy should support growth, but its success will ultimately depend on whether Woolworths can gain market share without diluting margins,” Mokabane said.

When asked if investors should be concerned about the Food business’s before-tax profit decline, Makobane said it is not necessarily a structural concern. 

“Some of the pressure came from higher fuel costs and investment in supply-chain capacity, which should ease or generate benefits over time,” he said. 

“The bigger issue to watch is Woolies Dash, where the planned acceleration could initially dilute margins until the channel achieves sufficient scale and better delivery economics.”

In Woolworths’ 2026 results, it reported that its on-demand e-commerce business, Woolies Dash, grew revenue by 19.6%.

Woolworths’ online channel accounted for 7.3% of South African Food sales.

For comparison, Shoprite’s 2026 results revealed that Sixty60 represented 11.1% of its Supermarket RSA sales, which is a larger base than Woolworths Food.

Note that the share prices used in this article were captured at midday on Thursday, 3 September.