Woolworths Food under serious pressure in South Africa

Woolworths has its work cut out for it as the retailer hopes to improve the performance across its various businesses.

The company recently announced a strategic pivot to focus more on its food business, which continues to outperform other divisions.

In its latest results, the group reported above-market turnover at Woolworths Food, with concession sales growth of 5.7% in the 2026 financial year.

By contrast, its Fashion, Beauty, and Home (FBH) division saw more modest turnover and concession sales growth of 4.4% over the same period.

Reflecting on the results, Woolworths Group CEO Sam Ngumeni said heightened economic pressure and weak consumer demand had weighed on much of its operations.

“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.”

Woolworths described its food business as its “strongest competitive advantage and primary engine of both brand equity and value creation”.

As the group reorients its focus around Woolworths Food, it said its other divisions will serve to reinforce the customer proposition and support its ecosystem.

In an interview with 702, Ngumeni said this reorientation aimed to return Woolworths to its roots.

“Woolies always stood for quality, innovation, and sustainability,” Ngumeni said. “At a Woolworths brand level, the one part of our business that best represents that is food.”

“When we worked through crafting a strategic way forward for the group, the one area of the business that is distinctively different to the market is the premium food business.”

Ngumeni, who served as Woolworths Food CEO for two years, said its returns profile was the gold standard not just within the group, but also in the wider South African food sector.

Not giving up on fashion

While Woolworths Food has continued to outperform, the group’s fashion business has lagged behind as the market has become increasingly competitive.

While FBH saw overall growth of just 4.4%, the Home business delivered 11.7% growth, and Beauty grew 7.9%.

The group said these two sectors serve as the most commercially viable extensions of its food business as it expands into a broader “lifestyle” segment.

Despite the lacklustre performance of Woolworths’ fashion division, Ngumeni said the reorientation around food did not mean the company was taking a step back from clothing.

Instead, he said it served to set a benchmark of standards which Woolworths’ other divisions, including fashion, would aim for in future.

“Although we’ve made good progress, there is still work that we need to do in terms of quality and resetting the quality conventions for that business,” Ngumeni said.

“What we are doing is making sure that it understands the role it plays in this ecosystem and delivers up to the brand experience that is best reflected in our food business.”

Woolworths recently announced a return to full-year profitability for its struggling Country Road division in Australia and New Zealand, despite economic headwinds.

While the apparel sector in these countries stabilised during the first half of the financial year, rising interest rates due to the war in the Middle East weighed on consumer footfall and spending.

Market speculation points to Woolworths potentially selling the Country Road Group in Australia, a move which Benguela Global Fund Managers CEO Grant Nader said would be smart.

This would allow the group to focus more of its attention on its South African fashion business, better supporting the reorientation toward food.

“You can’t just shut down the entire fashion business,” Nader said. “You have to figure out a way to streamline, monetise, or fix it.”

“Exiting would free up significant management attention and capital, allowing them to focus on South Africa.”