economic
| 2006 | 2005 | |||||||
| Rm | Rm | |||||||
| Value added | 15 143.0 | 12 988.9 | ||||||
| Less: Cost of sales | (9 340.4) | (8 027.1) | ||||||
| Cost of services and | ||||||||
| other operating expenses | (2 344.6) | (2 018.2) | ||||||
| 3 458.0 | 2 943.6 | |||||||
| Distribution of wealth: | % | % | ||||||
| A | To employees as salaries, wages | |||||||
| and other benefits | 1 699.6 | 49.1 | 1 460.0 | 49.6 | ||||
| B | To government as income tax | |||||||
| (including deferred tax) | 409.0 | 11.8 | 299.5 | 10.2 | ||||
| C | To lenders as finance costs | 243.9 | 7.1 | 152.7 | 5.2 | |||
| D | To shareholders | 474.2 | 13.7 | 384.2 | 13.1 | |||
| E | Depreciation | 269.9 | 7.8 | 254.5 | 8.6 | |||
| F | Earnings retained | 361.4 | 10.5 | 392.7 | 13.3 | |||
| 3 458.0 | 100.0 | 2 943.6 | 100.0 | |||||
contribution to South African economy
Woolworths continues to create wealth across a broad spectrum of the South African economy, at the most fundamental level by generating direct employment and career opportunities for over 15 000 people and indirectly, through our manufacturing and processing network.
More than 90% of goods sold in our stores, by volume, are manufactured in South Africa and we continue to be determined to encourage local manufacturing wherever possible. International sourcing is only encouraged where the right technology and quality is not available locally, or comes at a premium to the customer.
During the year Woolworths was one of the retailers that gave input to the development of a sector strategy under the dti to assist in building the competitiveness of the local industry.
2007 focus
The clothing industry in South Africa is a focus area for government with measures being considered to protect this industry. Woolworths remains committed to buying as much clothing as possible from local suppliers and is concerned that government intervention in the form of quotas on Chinese imports will only provide short-term relief to an industry that needs to focus on improved productivity. Woolworths will continue to work with stakeholders to find solutions that meet the needs of South Africa’s growth initiatives as well as the needs of South African consumers for quality product, innovative technology and value-for-money pricing.
