Woolworths — fastmoving.co.za - Retail South Africa

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Introduction
Woolworths was founded in 1931 by Max Sonnenberg. His belief that success lies in providing customers with superior quality merchandise at reasonable prices has been instrumental in establishing Woolworths as one of South Africa’s leading retail chains – a benchmark for excellence and an icon of quality.

Woolworths core philosophy is underpinned by quality, offering customers consistently high quality merchandise at affordable prices and incorporating innovative developments across the business. Building lifetime relationships with customers remains critical to the business’ success, ensuring that we understand their needs and meet these needs with ever increasing consistency.

Group Structure
Woolworths Holdings Limited is an investment holding company and one of the top 100 companies listed on the Johannesburg Securities Exchange. Its core business focus is the provision of retail and financial services to upper and middle income groups mainly in South Africa but also in Africa, Australia, New Zealand and the Middle East.

Woolworths operates through the following subsidiaries:

Woolworths (Proprietary) Limited – a respected chain of over 330 retail stores and (including more than 150 franchise stores) offering a selected range of quality clothing, food, homeware, beauty and financial services under its own brand name in South Africa, Africa and the Middle East.

Country Road Limited – is based in Australia and offers apparel and homeware in its own retail stores and through concessions in a major Australian department store. It is listed on the Australian stock exchange and operates in Australia, New Zealand and South East Asia.

Store Numbers
Within the Woolworths group, there are corporate owned stores and franchised stores. Whether corporate or franchised, Woolworths operates three main formats; Woolworths department stores, Woolworths Food (Food Only) and Woolworths Food Stops (convenient stores), which are franchised to Engen Petrol station owners.

Store Name	2003	2004	2005	2006	2007
Owned	123	136	149	173	200
Franchised	103	119	125	136	145
Total	226	255	274	310	345

Group Sales

Group	04	05	06	2007
Turnover (bn)	10.649	12.221	14.208	17.377
Headline Earnings (mn)	650.5	781.9	835.0	1025.3

Estimated Grocery Market Share

Chain	2005	2006	2007
Pick n’ Pay	24.2	24.3	23.8
Shoprite	22.9	24.2	23.8
Spar (SA)	15.2	15.3	14.9
Massmart	12.1	12.0	11.8
Metcash	11	11.1	10.9
Woolworths	8	8.5	9
Sub Total	93.4	95.4	94.2
Other	6.6	4.6	5.8

International
Today, Woolworths is a retail chain that extends throughout Africa and into the Middle East, trading through more than 300 stores. Woolworths influence also extends to Australia with a majority share in the Australian retail chain, Country Road.

Group Strategy
Woolworths is very active when it comes to new initiatives, pilot projects and the development of its private label ranges and store concepts. For 2007, Woolworths is looking at improving its café and in-store restaurant offering, while also rolling out a bakery section in its larger stores with food sections. In the health & beauty sections of its stores, new private label cosmetic ranges and improved branded cosmetics section are designed to attract more customers.

Convenience food stores and full-line stores will drive growth in emerging markets in townships and urban centres. Food Stops on Engen forecourts are being rolled out aggressively and it is anticipated that there will be more than 40 Food Stops by the end of 2008. Woolworths is also looking at opening smaller stand-alone food stores to cater for the growing number of consumers looking for quality foods. As mentioned above, private labels ranges will play a dominant part in this strategy.

Woolworths has become the first South African retailer to commit itself to energy reduction targets. Chief executive Simon Susman has committed the retailer to reducing its “relative carbon footprint by 30%” over five years. Asked how Woolworths would achieve a reduction in transport emissions when its food business was growing as much as 25.9% a year, Mr Susman said the reduction was based on existing levels of emissions, adding that growth of the business would not be compromised. He said Woolworths had taken the decision to help protect the country from the ravages of global warming because customers expected the company to take the lead on environmental issues.

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