food

The food business continued to experience strong growth during the year under review. Market share at the close of the year reached an all time high of 8.5% (2005: 8%).

growth

Food sales were up 22.5% on the previous year (2005: 19.4%) with growth in comparable stores of nearly 12%. The strong like-for-like growth demonstrates that we are consistently gaining ground in building an improved main shop experience for our customers and that our convenience food stand-alone format continues to satisfy customers’ shopping needs. Additional growth was achieved through an aggressive rollout of our convenience stores.

Food inflation remained relatively low during the year, averaging 4.2% (2005: 3%).

the good food journey

Woolworths continues to focus on offering customers healthy, natural and superior food products. Despite operating in an ever-more competitive environment, this focus on good food, innovation, quality and convenience has paid dividends.

Whilst the fresh produce business remains the Woolworths stronghold and is the greatest contributor to turnover, the extended grocery offering and limited selection of branded products has contributed to the strong growth and to meeting customers’ main shop needs.

During the year focus was placed on analysing the customer basket from core to luxury and assessing the gaps – new ranges and products were launched to fill these gaps. The year saw an expansion in our product ranges, focussing on themes such as traditional, authentic, handmade or homemade and steam cuisine, all with delicious, simple, healthy ingredients. The good food journey continued, encompassing our ever expanding organics offering, our first-to-market “Flavourburst” and “Discovery” ranges in fresh fruit and vegetables and the considerable innovation and advancement introduced in dairy.

2007 focus

To continually and significantly shift Woolworths market share and further strengthen our core value proposition, the predominant focus of the food business will be to provide a superior quality, innovative product with availability levels our customers can trust.

With Woolworths limited assortment formula, absolute availability remains our biggest challenge in growing this business and considerable focus has been directed on improving the quality of our planning and cataloguing.

Value, both in terms of product differentiation and price, remains a key issue and the ongoing repositioning of real and perceived value and price perceptions is ongoing.

As we grow our business, the importance of the calibre and strength of our supplier base is increasing – building capacity is fundamental in supporting our aggressive growth targets whilst continually striving to improve our quality standards. Woolworths suppliers are integral and vital partners on this journey to consistently deliver the healthiest, most delicious food to South Africans.

Woolworths technologists work with suppliers to encourage them to use the most up-to-date sustainable farming and production methods. Complementing this, we have significantly bolstered the calibre of our food procurement team with a focus on technology, food innovation and improved planning skills, which will continue.