Woolworths Thought for food
A trading update from The Dapper One, which reveals that for the first 20 weeks of the FY we have no choice but to call ’21, the business grew sales +3.5% YoY. And it would have been less if not for Woolworths Foods, which saw revenue increase +10.6%, or +9% on a like-store basis. This performance has prompted Woolies to allocate an extra +1.4% of net space to the food business, which we presume to be a generous allocation, and is aiming at upping this to +4% over the next three years, even as it reduces the footprint of its fashion, beauty and home departments by -1.5%. It is also looking at ways to increase the size of some of its small and medium-sized Food stores, now a pillar of the old portfolio. Over the next three years, the business will spend R750m of its R1bn allocation on price reduction in the food business
– no doubt resulting in its continued growth. In Australia, in the meantime, a return to the stage 4 lockdown has seen a decline of -11.7% in sales at the embattled David Jones acquisition.
Comment: Excellent to see Woolies polishing the jewel in the crown. Its food category is, we’ve always said, a world beater.