Woolworths Group has reported a notable increase in turnover and concession sales for the 18 weeks ended 3 November 2024. Group turnover rose by 6.5%, with a 6.8% increase on a constant currency basis compared to the same period last year.
This growth comes despite varied economic conditions across different regions.
In South Africa, consumer sentiment is on the rise, buoyed by moderating inflation, the beginning of easing interest rates, and the continued suspension of loadshedding. These factors have helped offset the constraints on discretionary spending, leading to a more positive retail environment, the retailer said.
Conversely, the Australian market continues to grapple with high interest rates and elevated living costs, which have dampened retail footfall and spending. The challenging economic landscape has made it difficult for retailers to maintain growth.
Woolworths has shown robust performance, particularly in its Food business, which saw a 12.1% increase in turnover and concession sales, and a 7.3% rise on a comparable-store basis.
This growth is attributed to improved availability, ongoing innovation, and a strong value proposition.
Excluding Absolute Pets, which was acquired in the fourth quarter of the previous financial year, Food sales increased by 9.6%.
Price inflation for the period averaged 6.2%, with trading space, excluding Absolute Pets, increasing by 2.0% on the prior period.
Online sales increased by 36.9%, contributing 6.2% of Food sales, driven by our on-demand offering, Woolies Dash, which delivered sales growth of 54.4% for the period.
The Fashion, Beauty, and Home (FBH) segment also experienced growth, with a 3.5% increase in turnover and concession sales, and a 2.8% rise on a comparable-store basis.
Beauty sales were particularly strong, growing by 20.6%, as Woolworths continues to establish itself as a leading beauty destination in South Africa. Online sales in this segment grew by 36.5%, contributing 6.5% of FBH sales.
The Woolworths Financial Services book saw a slight decline of 3.5% year-on-year by the end of October 2024. However, excluding legal book debt sales, it was up by 2.1%. The annualised impairment rate improved to 5.9% from 7.5% in the prior period.
The Country Road Group (CRG) in Australia and New Zealand continues to face challenging trading conditions. The retail sector is experiencing declines in footfall, intense promotional activity, and a shift in consumer spending towards value brands. Despite these challenges, the pace of decline in footfall is easing.
Overall, the group’s performance highlights the resilience and adaptability of its various segments, particularly in the face of diverse economic conditions. The significant growth in online sales underscores the increasing importance of digital channels in the retail landscape.