Woolies Dash dark stores win

Woolworths says its dark store supporting the Woolies Dash on-demand delivery service in Cape Town has been a big success, significantly improving efficiency and allowing the retailer to offer more delivery slots in the area.

A Woolworths spokesperson told MyBroadband that the retailer plans to launch more dark stores and hopes to announce its next dark store soon.

Dark stores aren’t open to the public and are dedicated to fulfilling online orders. The Woolies Dash dark store in Cape Town services the city bowl and surrounding areas.

“The introduction of our first dark store in the Cape Town CBD, servicing the city bowl and surrounding areas, has been a big success,” the spokesperson said.

“The dark store drives improved productivity and efficiency, as the space and format is geared to online picking and our online team can scale to increased demand more easily.”

They added that the dark store enables the retailer to offer a full product catalogue to a larger group of customers.

“We can put more order volumes through a store where we don’t compete with in-store shoppers for either aisle space or product availability,” they said.

“These improvements have contributed to Dash growing by 71% in the last financial year.”

Woolworths launched its first dark store to support Woolies Dash in Cape Town CBD in August 2024, markedly improving product availability in the area.

Woolworths online and mobile director Liz Hilock said the company’s investment in dark stores would improve its customers’ experience using Woolies Dash.

The strategy of using dark stores helps eliminate the need for online orders through Woolies Dash to compete with in-store customers, by providing a dedicated space to store products and fulfil on-demand orders.

“The dark store eliminates this competition, and customers enjoy quicker delivery, thanks to a dedicated environment designed to be online-first,” Woolworths said.

The retailer plans to open more dark stores across the country.

“Investing in dark stores is testament to our focus on creating a future-fit omnichannel offering, that leverages and transforms existing assets to continuously improve our customer’s experience,” said Hilock.

Woolworths started trialling its on-demand delivery service in 18 stores in Cape Town, Durban, and Johannesburg in December 2020, and Woolies Dash has shown strong growth in recent years.

It has also significantly contributed to the growth of Woolworths’ other online business assets.

At the time, Hilock said the retailer had observed strong online sales growth in the prior year, adding that Woolies Dash would add a same-day delivery service to its online offerings.

“Woolies Dash complements our already expansive online service, from our scheduled delivery service with a broad regional footprint to our drive-through click-and-collect service, and now our same-day service with Woolies Dash,” she said.

Woolworths’ annual results for the year ended 30 June 2024 reported strong online growth for most of its business assets.

Woolies Dash led the charge despite the retailer facing several trading obstacles during the year.

It attributed its growth to increased penetration of the Woolies Dash service, which grew by 71.2% in the financial year.

Online food sales grew by 52.8%, contributing 5.5% of the retailer’s total sales in South Africa.

Woolworths also reported significant online growth in its fashion, beauty, and home business segments, with sales growing by 30.4% and contributing 5.6% of the retailer’s total sales.

Its online growth came despite facing challenges that negatively impacted trade, including threats from international players like Shein and Temu in South Africa.

“Whilst our Fashion, Beauty, and Home business continues to make steady progress on a number of its strategic priorities, trade was impacted by the weak macro environment, poor availability, and increased competition from the disruptive entry of international online retailers,” Woolworths said.

Despite these challenges, Woolworths says it consistently sees sales growing by over 50% in food and beauty, home, and fashion.