Woolworths online food makes inroads among shoppers

Woolworths - Source: Moneyweb

Retailer Woolworths said Thursday (20 January) that group online sales for the half-year financial period ending 26 December grew by 22.4%, and contributed 13.7% to its total turnover and concession sales.

Group turnover and concession sales for the 26 weeks ended 26 December 2021, however, decreased by 2.1% compared to the 26 weeks ended 27 December 2020, and by 0.3% in constant currency terms.

Sales in the last six weeks of the period increased by 3.0%, and by 3.5% in constant currency terms, it said.

Woolworths noted that trade during the period was severely impacted by the extended lockdowns in Australia and by the civil unrest in South Africa.

Trading momentum across all divisions except Fashion Beauty Home (FBH) improved over the last six weeks of the period supported by more targeted Black Friday promotions, positive festive season trade, and the lifting of lockdown restrictions in Australia.

For its food business South Africa, turnover and concession sales grew by 3.8% for the half, accelerating its momentum to 5.8% in the last six weeks of the period.

Sales in comparable stores grew by 2.8%, with price movement of 2.6% and underlying product inflation of 3.7%. Sales growth should be considered in the context of the high Covid-19 base, which benefitted from increased home consumption. On a two-year basis, sales have grown by a cumulative 15.2%, relative to the comparative 2019 period, Woolworths said.

Online sales increased by 55.8%, contributing 3.1% of South African sales, This is up from 2.3% in the prior reporting period ended June 27, 2021, and further supported by the expanded Click-and-Collect offering and the rollout of its on-demand delivery service, Woolies Dash.

Woolworths said its fashion, beauty and home (FBH) business grew turnover and concession sales by 4.2% and by 4.7% in comparable stores, with price movement of 5.4%. Trading momentum slowed in the last six weeks of the period primarily due to womenswear performing below expectations, the group said.

Online sales grew by 19.2%, contributing 4.4% of South African sales, while the ongoing execution of space reduction initiatives reduced the footprint by 6.1% relative to the prior period, resulting in improved trading densities.

The Woolworths Financial Services net book grew by 5.3% year-on-year to the end of December 2021, compared to a 7.8% contraction at 31 December 2020, reflecting the recovery in consumer spend.

Trade-in Australia and New Zealand was significantly impacted by government-enforced restrictions across the region, where we were unable to trade in stores representing 70% of our brick-and-mortar sales base during the lockdown period.

Given the prolonged lockdowns in Australia and, to a lesser degree, the disruptions in South Africa, our results for the current period have been negatively impacted by the lost sales, coupled with the absence of JobKeeper and rent relief which supported the prior-year base.

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