Woolworths has a market-leading food business, not only in SA but in the world, according to group CEO Roy Bagattini, saying the company will direct more resources in refurbishing its estate.
The group’s food business reported concession sales growth of 11% for the year to end-June, crediting the growth to increased footfall and average basket size, supported by “ongoing innovation and enhanced customer experience”.
Bagattini said the food business was widening the gap between the group and its rivals.
“We are growing the gap between our food business and that of Checkers on every single metric. Our food business is the strongest in the sector and we continue to stretch the gap between us and the rest of the pack,” he said.
“Our food business is one of the best in the world. It is not easy to replicate what we have achieved. Our private label offering is unrivalled in the industry.”
Woolworths has reported a slump in annual earnings, weighed down by its Australian operations that overshadowed strong trading in SA.
The group reported a 23.9% decline in headline earnings per share (HEPS) to 268.1c for the 52 weeks to end-June compared with the comparable 52-week period.
The group said its Country Road Group (CRG) business reported a loss after heavy promotional and discounting activity, high import costs and weak consumer demand in Australia.
While the group’s overall turnover and concession sales increased 6.1% to R81bn, CRG sales fell 5.4%. Essentially, Woolworths sold about R1.56bn of goods per week, including turnover and concession sales, during the period.
The company said that after its separation from David Jones, CRG underwent restructuring and reconfiguration at an unfavourable time that led to profit margins falling.
Even though CRG managed to cut costs slightly, sales dropped so much that the business still lost profitability. Woolworths said the fixed costs did not shrink enough to match the weaker sales, so the decline hit harder in the second half.
In contrast, Woolworths SA posted stronger growth. Food sales rose 11% supported by higher volumes and strong online demand. The fashion, beauty and home division gained momentum in the second half, with beauty growing nearly 15% and fashion returning to positive volume growth.
The diverging performances in Australia and locally left the group’s bottom line under pressure, with Woolworths absorbing more than R917m in impairments in CRG.
The weaker earnings also led to a 29.2% dip in shareholder payouts, with the group declaring a total dividend of 188c per share.
The group warned that consumer spending was likely to remain constrained across both geographies, though it expected recent investments and stronger local momentum to support a recovery in the year ahead.
Update: September 3 2025
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