Woolworths plans to take greater advantage of the growing number of its food shoppers who also pick up items from other departments.
“What we are seeing, which is really interesting, is the ‘cross-shop’,” CEO Roy Bagattini said this week in an interview after the full-year results presentation.
“We see how much a food shopper spends in some of the other categories, like fashion or beauty, and home, and vice versa. So we are very pleased about that, because it helps us sort of drive what we call lifetime value of the customer in that space.”
Bagattini said one of the big advantages for Woolworths was the frequency with which customers visit its stores.
The number of people that come to our stores is very, very high, and it’s mainly because of our fresh components. About 70% of our business is fresh [food]. So when they come into the store for food, they have the opportunity to cross-shop and buy other things.
— Roy Bagattini, Woolworths CEO
“The number of people that come to our stores is very, very high, and it’s mainly because of our fresh components. About 70% of our business is fresh [food]. So when they come into the store for food, they have the opportunity to cross-shop and buy other things.”
Woolworths will increase its baby and children’s ranges, where there was an opportunity for strong growth.
“We have good credentials already there. We have the quality, you know, obviously, we think that’s a big differentiator there. But more importantly, we have the food customer that likes to shop for children in our stores. So we can drive that up, too.”
Bagattini said in some stores, there will be a wider variety of baby and children products “that go beyond just the basic clothing”.
In the home category, Bagattini said there is a possibility of testing stand-alone stores in the next year. “We sort of have a semi-stand-alone store that we’ve tested already, but we absolutely are going to be testing a couple more stand-alone versions over the next one-two years.”
However, Woolworths will focus on select categories. “We don’t want to be an end-to-end home player, we really want to focus on the things that play to our strengths and that really talk to our customer.”
Woolworths reported a decline in earnings in the year to June as it reeled from poor performances in its fashion, beauty & home (FBH) segment and at Country Road in Australia.
Bagattini said in the first half of the financial year, the company faced late supply constraints and product availability in FBH, but moved swiftly to address the issue, resulting in an improvement in the second half.
“The heavy lifting is behind; one of the things we’ve been focusing on is increasingly making sure the product we put into our stores resonates with the customer.”
The food division continued its stellar performance, with turnover and concession sales up 11% to R52.4bn.
Stephan Erasmus, investment analyst at Anchor, said the tension between growth and profitability best defined financial 2025 for Woolworths. On the surface, the group delivered a respectable 6.1% increase in turnover and concession sales. However, this growth did not translate to the bottom line, where adjusted headline earnings per share declined 19.2%.
“The most pressing concern remains the ability of management to stabilise and turn around Country Road. The significant margin erosion and the impairment charge indicate that a clear path to sustainable profitability is still elusive,” Erasmus said.
Woolworths said there had been sales growth across food, FBH and at Country Road in the first seven weeks of financial 2026.
Erasmus said the data was promising, with caveats.
“The synchronised recovery in sales for FBH and Country Road is encouraging. However, the simultaneous slowdown in the primary profit engine, the food business, comes as somewhat of a negative surprise.
“The investment case for Woolworths in financial 2026 now hinges on stabilising the food business growth rate while ensuring the accelerated growth in FBH and Country Road is profitable and sustainable.”
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