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Woolworths plans to double the number of Engen forecourts offering its After Dark food delivery service as it looks to grow its online business.
The retailer has just more than 100 Engen forecourts in its network, with CEO Sam Ngumeni saying the group aims to double the footprint in the medium term.
The expansion is part of Woolworths’ broader strategy to refocus on the food business by using convenience, coffee, food-to-go and partnerships to attract customers and increase the number of shopping occasions.
After Dark, which is available on UberEats, allows customers to order food for delivery until midnight, has 80 sites and more than doubled revenue year on year.
The retailer is also using the platform to offer products from adjacent businesses, including W Café and its other convenience propositions.
Ngumeni said the group saw significant “runway” to expand its café and coffee businesses, both through “physical locations and as tools for customer acquisition, frequency and engagement, and incremental growth”.
Strategic partnerships, particularly with Uber Eats, are also becoming an important part of the model. The partnership gives Woolworths access to an established customer base and delivery infrastructure without requiring the retailer to replicate the network itself, Ngumeni said.
Woolworths is preparing to overhaul its online and delivery business Dash, which has been struggling while rivals gain market share.
The objective is to “fundamentally alleviate customer friction” from the customer journey and make the online proposition more convenient and relevant.
A new digital officer role has been created to tackle legacy technology architecture and help deliver a more seamless customer experience across Woolworths’ physical and digital channels.
The shift comes as Woolworths sharpens its strategy around its premium food business, which remains its strongest competitive advantage.
Woolworths’ total revenue for the year to June rose 4% to R83.4bn. Profit was down 5.1% to R2.3bn. Revenue from the food division was up 5.5% to just more than R54bn, while profit before tax was up 2.9% to R3.3bn.
Overall online sales accounted for 7.3% of Woolworths Food sales in South Africa in the year to June, while on-demand delivery revenue increased 19.6%.
Woolworths Fashion, Beauty and Home delivered revenue of R15.7bn up 4.3%. Adjusted profit before tax was down 16.9% to R1bn. Home delivered standout sales growth of 11.7% supported by an enhanced Homeware offering, and Beauty grew sales by 7.9%.
As part of the group’s reset to re-orientate around the Food business, “Home and Beauty are categories that translate most readily into commercial momentum as an extension of Food into a broader lifestyle proposition,” said Ngumeni.
He said “carefully selected adjacent categories will strengthen the customer proposition and the group’s own ecosystem.”
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