Woolies’ online grocery sales surge
Woolworth’s trading update for the 20 weeks ended 12 November 2023 has revealed that the increased penetration of its Woolies Dash food delivery service resulted in a significant increase in online sales.
The Group’s revenue increased by 4.7%, while online food sales surged by 46.2%. Online food sales contributed 5% to total sales in South Africa.
“Space grew by 2.7% over the prior period, while Online sales increased by 46.2%, contributing 5.0% of South African sales driven primarily by increased penetration through Woolies Dash (our on-demand offering),” said Woolworths.
However, it noted that in-store food sales were the primary driver of its food sales growth.
It added that this was despite a weak economic environment in the country.
“The economic environment in South Africa remains weak, exacerbated by the country’s energy crisis, which continues to have a pronounced impact on both business and consumer confidence,” said Woolworths.
It also provided an update on its Fashion, Beauty, and Home business.
While trading space for the business reduced by 0.2% compared to the prior period, online sales grew by 23%, contributing 5.2% of South African sales.
“The Group’s turnover and concession sales from continuing operations for the 20 weeks ended 12 November 2023 increased by 4.7% and by 3.9% in constant currency terms,” said Woolworths.
It said this was notwithstanding several external factors in addition to the difficult economic conditions in South Africa.
The external factors included the Western Cape taxi strikes, congestion at ports, and the impact of the Avian Flu on the availability of key products.
It noted that these figures exclude its David Jones business, which it disposed of in the prior period.
“Group turnover and concession sales on a total basis (including the contribution of David Jones in the prior period, which is therefore non-comparable) decreased by 22.4% on the prior period,” it said.
Woolies Dash — Woolworths’ online on-demand grocery delivery service — competes with the likes of Checkers Sixty60, Pick n Pay asap!, and Zulzi in South Africa.
Although Checkers Sixty60 has dominated the sector, services like Woolies Dash hope to close the gap.
Sixty60 is the largest grocery delivery app in the country, and with Woolworths only offering the Woolies Dash service out of 78 branches, it doesn’t have nearly the same reach as Checkers’ app.
Despite this, Woolworths reported a 150% increase in Dash sales over the past financial year.
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