selling
2006 was earmarked as a year of growth for Woolworths. An aggressive store roll-out programme was put in place to respond to customers’ demands for a more convenient shopping experience and to bring Woolworths closer to new markets as our customer base broadens.
During the year 14.4% more food footage was added, offering a more convenient shop to more of our food customers, whilst 6.4% more clothing and home footage was added, introducing the Woolworths brand to new markets. The compact format of Woolworths Food stores is proving a key advantage and this, together with the customer focused full-line store design, has generated additional sales in the new locations.
New format Home & Food stores were opened in two locations, Willowbridge (Cape Town) and Design Quarter (Gauteng), and these new and unique trading formats, successfully combining home, food and a restaurant experience under the Woolworths brand have been well received by customers. Further locations for this store format are now under investigation.
2007 focus
The store roll-out programme continues with a focus on convenience – new Woolworths food convenience stores in suburbs closer to customers’ homes and continued momentum behind the roll-out of the Engen Food Stop convenience format. A modest modernisation programme will be continued into 2007 with some spend allocated to the extension of certain key stores which currently overtrade.
Full-line stores will be opened in select regional malls, bringing the brand to customers who have previously had to travel to experience Woolworths – the first full line store in Soweto opens in Jabulani late in 2006 with a further flagship store in Maponya Mall in 2007. We are excited by the opportunities of this new market.
| Woolworths trading space | ||||
| June 2005 m2 |
June 2006 m2 |
% change 2005 - 2006 |
Projected June 2007 m2 | |
| Total Footage | 389 645 | 422 367 | 8.4 | 448 136 |
| clothing and home | 302 259 | 321 602 | 6.4 | 333 925 |
| food | 84 849 | 97 065 | 14.4 | 110 511 |
| coffee | 2 537 | 3 700 | 45.8 | 3 700 |
| Number of stores | 274 | 309 | 12.8 | 366 |
| corporate | 149 | 173 | 16.1 | 207 |
 full line |
84 | 93 | 10.7 | 100 |
| clothing and home |
5 | 6 | 20.0 | 6 |
| food |
60 | 74 | 23.3 | 101 |
| franchise - SA | 74 | 84 | 13.5 | 107 |
| franchise – international | 51 | 52 | 2.0 | 52 |
managing our stores
Strong footage growth over the year presented significant challenges around ensuring a pipeline of talented retailers to take up the new positions created by the quantum of new store openings. Attracting, developing and retaining this talent will continue to be the major focus this year and Woolworths current accredited learnerships, in both management and sales advisors, are being strongly supported to develop this pipeline.
Woolworths remains committed to improving the levels of customer service and trialled different service approaches during the year. Assisted self selection will remain the basis of Woolworths service delivery – ensuring that a sales consultant is on hand when a customer needs assistance, and making it easy for customers to find what it is they are looking for. This service ethos will be supported by a focus throughout the business on effective product availability on the sales floor.
In all Woolworths retail operations, in line with our sustainability focus, energy usage is carefully monitored and targets are set annually in an attempt to drive down energy usage in stores. Health and safety continues to be a key concern for both customers and employees and the policy and processes are regularly reviewed and updated to ensure continual improvement and compliance with current legislation.
2007 focus
More than 13 000 people are employed on the selling side of Woolworths and 2007 will see a focus on the development of a compelling employment proposition ensuring greater stability in the team.
Customer satisfaction remains key to building sustainable selling formats and service will remain a focus next year with a special emphasis on ensuring that we improve our check-out experience for our customers with more tills available and more staff deployed.
As Woolworths continues to expand retail footage, building design principles will include consideration of customer and employee well-being, as well as issues such as energy efficiency, water, waste and biodiversity management, local sourcing of equipment and materials and noise management.
franchise stores
Woolworths local franchise sales have continued to perform well above the market in both clothing and home, and food. This growth has been driven by continued attention to product availability and the catalogue across all stores. Great strides have been made with the appointment of BEE franchisees who now represent 34% of our franchisees (14% in 2005).
We will continue the expansion of the South African franchise stores in appropriate locations and formats.
Sales in our Africa and Middle East franchises have improved over the last 12 months with double digit growth being achieved in all countries.
2007 focus
An ongoing focus on attracting successful BEE franchisees to the Woolworths brand in appropriate geographies and profitable store formats will help to build successful black-owned business and supports South African entrepreneurs.
Woolworths will continue to grow the local franchise business profitably.
