Woolworths Ventures has recorded double-digit sales growth in the half year to December as the company plans to double down on this segment.
The Ventures unit houses Woolworths liquor, WCellar, small clothing format stores, WEdits, pet stores Absolute Pets and coffee shops WCafe, as well as fast food outlets Woolworths Now Now.
Woolworths Ventures is the group “strategic growth accelerator”, said CEO Roy Bagattini.
“WEdits is trading well, delivering like-for-like growth ahead of the main FBH (food, beauty and home) business and growing total sales by almost 50% in the last quarter alone. A truly remarkable performance and the result not just of our continued rollout but how the more curated offer of WEdit and its high-touch service is resonating with our customers,” he said.
Bagattini said WCellar was taking market share from competitors.
The company will also pursue new growth areas for the existing businesses.
Woolworths reported a turnover increase of 5.2% to R41.6bn, while profit before tax was down 23% to R2bn. The group said profit growth was constrained by the strength of the rand, in addition to weaker currencies in some of the African markets in which it operates.
The food business continues its stellar performance with turnover up 6.7% to R26.6bn. Fashion, beauty and home (FBH) grew turnover by 6.1% to R8.1bn. Profit before tax at the food business was up 2.7% to R1.6 billion, while at FBH it rose 3.1% to R601m.
Bagattini said Woolworths South Africa delivered “above-market turnover and concession sales growth of 6.8% for the period, notwithstanding relatively subdued consumer confidence and spend, and despite the easing inflationary and interest rate environment.”
Performance from the food business “is supported by the business’s unmatched expertise in food science and technology, its best‑in‑class cold chain and its unrivalled quality, innovation and sustainability credentials – core fundamentals that continue to set the foods operation apart,” said Bagattini.
The improved performance of the fashion business was largely as a result of the investments made in improving the value chain to ensure stock availability. Woolworths also operates Australia’s Country Road Group, which reported improvement in sales but overall is still under pressure.
Bagattini said in Australia, the prolonged discounting in a high-cost inflationary environment continues to exert pressure on retail footfall and spend. “Against this backdrop, CRG delivered an improved result from that of last year, benefiting from the repositioning of the brand portfolio and the successful restructuring of CRG’s operating model, which continues to be embedded in the business.”
Looking ahead, Bagattini said while the South African macroeconomic environment was showing positive early signs of recovery, inflationary pressures in Australia and the subsequent recent interest rate hike were likely to further weaken consumer confidence in the country, tempering any recovery in Australian retail spend.
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