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Retail giant Woolworths is aiming for a larger share of South Africa’s lucrative fresh food and grocery market, committing to “invest R1 billion in its prices” over the next two to three years, 75% of which will go to reduce food prices. .
The group announced the move on Tuesday, perhaps not so coincidentally to coincide with the release of interim results from its Cape Town-based competitor Pick n Pay.
Read: Pick n Pay H1 Profits Drop
However, the Shoprite Group is likely to follow closely the expansion of its food business, which has been investing heavily in its top-market ladies chain to take on both Woolworths Food and Pick n Pay in recent years.
Woolworths said “an investment of R750 million” is planned in its food business to offer its products “at great value to customers” every day. This includes foods like fresh chicken, which is a basic protein meat in the country.
Investing in its food business makes sense, considering it is Woolworths’ best performing division.
Gauteng, in particular, has seen a proliferation of Woolworths Food stores, both in neighborhood malls and in smaller outlets at Engen fuel service stations.
“While this investment will initially be more visible in our poultry products, we have also implemented more promotions on the basics of daily life in grocery, home care and personal care to make them more affordable for more customers,” says Zyda Rylands, CEO. of Woolworths SA.
Zyda Rylands, CEO of Woolworths SA, says the investment will initially be more visible in the group’s fresh poultry products. Image: supplied
“Our price investment journey over the next three years will help us help our clients who are deeply concerned about the economic impact of Covid-19 on the country and their budgets. Thanks to this effort, we will be able to offer the Woolies products of exceptional quality that our customers love at more affordable prices ”, he adds.
The first phase of the plan begins with a “price investment” of R250 million in the food business and R250 million in the fashion business for this year. Woolworths said the investment is focused on its most popular products.
Their investment in fashion, although minor, is also noteworthy, considering the tendency of South Africans to opt for lower priced casual wear in the face of Covid-19, which is seeing more people working from home or back home.
“Over the past few years, we have embarked on a journey to invest in the prices of key product lines and categories to ensure we continue to provide our customers with the value they expect from us,” says Rylands.
“The Covid-19 pandemic has emphasized this need and therefore has accelerated our price journey, due to the significant impact it has had on our economy and on the lives of our customers and their families. As we know that our customers are under pressure, we are investing even more in our prices to ensure that we remain relevant and accessible, without compromising our quality ”, he emphasizes.
“Through the crisis, we have focused on identifying greater efficiencies in our business, as well as in our value chain, to find opportunities to be more effective and reduce costs,” he adds.
“We have worked closely with our suppliers and partners to ensure we make these mutually beneficial and sustainable operational improvements. We are pleased to be able to pass most of the savings from these efficiencies to our customers, ”says Rylands.
