South Africa

Woolworths’ big online shopping drive

Woolworths

Woolworths released its results for the 52 weeks ended 26 June 2022, which revealed a 1.7% increase in turnover to R80.1 billion and a 0.8% increase in profit before tax to R5.2 billion.

The company declared a dividend of 149.0 cents for the reporting period, a 125.8% increase on the prior year’s 66.0 cents.

Woolworths is accelerating its investment in its digital platforms as part of its strategy to grow the company and remain competitive.

It has a strong position in the South African retail market, offering food, fashion, beauty, and homeware products.

Liz Hillock, head of online and mobile at Woolworths, said in October 2021 that they had invested over R1 billion in their digital capabilities in three years.

“We’re now accelerating this investment to support the exponential growth of our digital channels,” she said.

These investments are starting to show results, with strong online sales growth across Woolworth’s local and Australian operations.

Online sales grew by 16.4%, contributing 12.4% to the group’s total turnover and concession sales over the year.

However, a large part of the group’s online sales came from Australia and New Zealand.

  • David Jones’ online sales increased by 28.7% and contributed 22.8% to total sales for the year.
  • Country Road Group’s online sales increased by 4.6% and contributed 31.6% to total sales for the year.

In South Africa, the contribution of online sales to total sales is significantly lower.

  • Woolworths’ fashion, beauty, and home online sales grew by 13.2% and contributed 4.4% to South African sales.
  • Woolworths Food’s online sales increased by 45.4%, contributing 3.2% of South African sales.

The online sales data revealed that 22.8% to 31.6% of sales in Australia and New Zealand come from online shopping.

In South Africa, online sales only account for between 3.2% and 4.4% of total sales.

It shows tremendous potential to increase online sales in South Africa, especially since Woolworths serves high-end customers who shop online.

Woolworths Roy Bagattini said they are planning R10 billion in capital expenditure over the next three years, with an up weighted focus on digital, data, and online capabilities.

As part of the focus on online sales, Woolworths will double their Woolies Dash fulfilment stores over the next few months.

They will also integrate Woolies Dash into the Woolies app, improving the omni-channel experience.

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