clothing and home

Turnover in Woolworths clothing and home grew by 12.4% (8.2% in comparable stores) with deflation of 1.0%. Market share remained stable at 15.6%.

The focus for 2006 has been on implementing a more consistent taste level across the business through the introduction of a design-led clothing business. Woolworths buyers buy according to a definitive design brief thus ensuring a consistent level of taste across the business.

Linking the role of design with technology has helped to deliver greater product innovation. Great strides have been made in technology, enabling Woolworths to drive innovation and newness to our customers whilst still delivering a quality product. A more strategic sourcing model has helped us significantly re-engineer our value proposition. The proposed quotas on goods and fabric could have a major impact on these values.

There has been a focus on value in Woolworths with special attention given to more competitive opening price points, ensuring that customers receive the best value whilst never needing to compromise on quality. This is evidenced by continued strong volume growth over the past year.

Part of the sourcing strategy has involved identifying centres of excellence offshore to enable us to meet customers’ demands for great quality and innovation at good value. Although this will continue to be a key aspect of the strategy, Woolworths recognises and supports the local South African supply base who continue to be strategically important - driving improved response times, better availability and greater flexibility.

In line with this commitment, we have been working closely with partners in the local clothing industry, including manufacturers, local and national government and other retailers, to develop a more competitive and sustainable local clothing and textile industry. In addition, Woolworths has focused on developing appropriate BEE supplier partnerships in both clothing and food, working towards more sustainable local businesses.

2007 focus

In 2007 Woolworths will continue on the journey towards a revitalised clothing business, providing our customer with the building blocks of the wardrobe and home for which Woolworths is respected. We believe that we have laid the platform for consistent growth across all product areas.

In home the focus is to build on the platform that has been laid in 2006, improving the taste level and delivering this more consistently across the ranges.

We are very excited about the launch of our new beauty offering in October 2006. This will include a re-launched private label offering, with significant innovation, which has been developed on the principles of good beauty and a natural platform. We will also introduce selected brands that offer innovation and customer appeal and are consistent with the Woolworths brand principles.

womenswear

Womenswear focus has been on maintaining and increasing Woolworths market share by:

updating Woolworths classic merchandise with particularly good successes in casual wear;
reinvigorating W-Collection – a key pillar in the total Woolworths offering which encourages food shoppers to shop Woolworths clothing; and
providing availability of core wardrobe items.

lingerie

The key focus for lingerie has been to re-establish the supply base to enable Woolworths to drive innovation back into this category. This innovation is not only focused on significant newness but on fabric, colour and comfort, a driving factor as evidenced by the success of the seam-free lingerie range.

Availability in lingerie was a challenge earlier in the year but this was rectified in winter and the related market share loss is beginning to be reversed with increased availability in core product.

menswear

Menswear continued to lose market share during the year but has just started to see the impact of Woolworths clothing strategy – driving a design-led business, with a more consistent taste level across all the ranges – which is finding positive support from our customers. Strategic sourcing and a focus on technology processes are also providing customers with enhanced quality and value.

Formalwear continues to perform well and this year has seen the setting of the foundation for the re-launched W-Collection, which we see as a considerable opportunity to further entrench Woolworths clothing with our food customer.

childrenswear

The key focus in childrenswear has been to keep pace with growth in the market. It has been encouraging to see an increase in market share in the latter months of the year.

The cornerstones of this success have been:

improved value with no sacrifice in quality;
ability to sell big volumes of the most wanted value items; and
particular success in toddlerwear which has seen large volume growth.

footwear

Ladies’ and children’s footwear have again performed well, continuing to show good growth. Woolworths men’s footwear has been appreciably improved with the range now meeting a taste level that appeals to customers, which is translating into good growth in terms of market share.

Significant rationalisation of Woolworths ranges has led to improved availability across the board. In children’s footwear, the focus has been on safety and comfort and this has been delivered through Woolworths Walkmates range.

accessories

Good levels of growth have been maintained in this fast moving and growing market. A key learning is that this product needs to be continually re-invented, providing a high level of newness to the customer.

home

The focus for the year has been to dominate key categories of the homeware business including bathroom, sheeting, crockery and vases. A W-Collection range was introduced and has been well received. This, combined with good availability and lower prices across the product spectrum has resulted in good volume growth.

cellular and technology

Woolworths continues to offer customers a range of cellular product across 95 stores nationwide. Sales in this category grew at 20% in the past year. Woolworths recently launched Virgin cellular, becoming the first and largest Virgin retail channel and the only retailer to sell all 4 service providers, offering customers a complete choice of cellular service provider.