Woolies to triple sales proportion from Africa
IOL Business - Jun 8th 2012, 08:47
Woolworths expects to more than triple the proportion of sales it derives from African countries north of the borders within seven years as it taps a growing middle and upper class.
The rest of Africa was not currently “a huge part of our business”, Woolworths chief executive Ian Moir said this week. “It’s about 3 percent now. It will get to 10 percent but not for five to seven years.”
Consumer spending in Africa rose at a compound rate of 16 percent between 2005 and 2008 and the continent had more families with an income exceeding $20 000 (R167 527) a year than India, New York-based McKinsey said in a June 2010 report. Woolworths operated 57 stores in 12 African countries outside of its home market at the end of last year and plans to have between 80 and 104 within two years.
The two stores that opened recently in Nigeria and one in Mauritius were performing well and four or five outlets would be operating in each country soon, while expansion into Angola was being explored, Moir said.
Woolworths’ net income surged to R1.03 billion in the six months to December from R775 million a year earlier, as sales gained 11 percent to R14.2bn. Conditions in South Africa were constrained and getting tougher, Moir said on February 16 when the results were released.
Gross domestic product growth slowed to an annualised 2.7 percent in the first quarter of 2012 from 3.2 percent in the previous three months, government data show. Expansion in the wholesale and retail industries eased to 3 percent from 5.2 percent.
Moir said: “The overall market is pretty much where it was in the first six months of the financial year.”
The shares gained 1.8 percent to close at R50.90.
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