Today, Woolworths is a South African retail chain that extends, through franchise partnerships, throughout Africa and into the Middle East, trading through more than 400 stores. Woolworths Holdings influence also extends to Australia with a majority share in the Australian retail chain, Country Road.
The Group undertakes an integrated approach to strategy and business planning, which aligns the strategy, the medium-term plan, and the operating plan and ensures that key targets are cascaded throughout the organisation.
• To be a customer -centric business
A significant amount of work has been done to define who the Woolworths customers of the future are and to identify what is important to them. We have defined a single business-wide view of the Woolworths customer, based on the customer’s mindset, wants and needs as informed by lifestyle segments. Customer segmentation and shopping habit information is integrated into our merchandise cycle and informs our branding, design, buying and allocation decisions.
• To be a brand value -driven business
We have modernised our branding, and for each of our sub-brands, we have challenged their purpose and alignment to the main Woolworths brand. Our plans are to ensure that our brand and its values are understood throughout the organisation and that those values are ingrained, both in our products, and in our service in stores: delivering Value with Values to make the Woolworths Difference.
• To build strong profitable customer relationships
Our WRewards loyalty programme was launched in September 2010 and has significantly exceeded our expectations, driving card acquisition and increased card spending. Customers are delighted with the instant savings offered by our loyalty programme. WRewards remains our key strategy to increase the lifetime value of our customers – enabling us to reward loyalty and gather information to further understand customer needs and align our total customer proposition.
• To get our formats right
We need to ensure that our products andmstores best meet the needs of the Woolworths shopper. To address this demand we have defined a format strategy across both Food and Clothing and General merchandise that defines location, space, range and service principles, based on our target customer. In Food, the most significant part of this intent is to enlarge existing stores to support our supermarket and regional centre concepts. We will however continue to roll out our smaller format stores to support customer convenience.
Our first supermarket (in Nicholway, Johannesburg) is planned to open in April 2012. At 2 500 m2, the store will be significantly bigger than any of our existing ones and will offer not only extended ranges, but an extended in-store experience.
• To grow our product dominance Clothing and General merchandise
Great progress has been made in creating dominant headquarters assortments underpinned by “The Difference”. The focus on Womens’ footwear and accessories, Lingerie and Babyworld has resulted in significant market share gains. The re-launch of our Re: and studio.w subbrands has been extremely successful, attracting a younger and more modern customer. Our plans are to continue to deliver product leadership in terms of quality and innovation throughout our ranges, delivering on-trend fashion at value, beautiful basics and reaffirming Woolworths as the market leader for innovation in comfort, convenience, safety and protection and sustainability.
Our Food business is synonymous with quality and innovation and we have greatly improved our value perception. Our Value with Values positioning in Food has been well-received by our customers where we have gained market share. To support our larger format strategy, we are expanding our ranges to enable our customers to complete their main shop, introducing larger pack sizes and new categories. Our branded Key Value Item (KVI) range will also be extended.
• To enable a multi -channel world
Our business and brand is well-positioned to take a leading role in the trend towards multichannel retailing. In the last year we have invested significantly in upgrading our internet shopping site. Our plans are to optimise and further expand our online offering in terms of products, information, services and delivery options. We will develop social commerce platforms integrating our social media marketing for the convenience of our customers.
• To expand our footprint in Africa
Our plans are to materially grow our presence in Africa. The focus will be on expanding our presence in existing countries of operation, whilst establishing a presence in Nigeria, Angola and Mauritius. We will open 19 stores in 2012 and have a target of more than 100 stores by 2014. We intend to integrate the international business into our existing processes to build a sustainable supply chain and to ensure consistent costeffective availability.
• To lower the cost of doing business
Our plan is to ensure that each business unit understands its “cost-to-sell ratio” and develops a sustainable plan to improve productivity. As part of these plans we will focus on addressing underperforming stores and improving the profitability of underperforming merchandise groups. We will also extend best practices in non-trade procurement more widely in the company to drive further cost-savings.
• To simplify our business model
A key business decision made last year was to re-acquire our franchise stores. The franchise business model added costs and complexity as well as a lack of consistency in the way our brand was experienced by the customer. At this point, approximately 75% of our South African franchise stores (measured by turnover) have been re-acquired.
• To improve our availability
Our intent is to continually improve availability in a sustainable manner, enabling customers to shop with confidence. We will continue to invest in improved systems and processes to improve availability. In Food, we will fine-tune our store catalogues and in Clothing and General merchandise we are improving our speed of inventory movement through the supply chain, optimising our allocations and improving our size profiling.
• To improve our sourcing capability
We have spent a significant amount of time and effort optimising our value chain across the business to drive higher margins. In Clothing and General merchandise we have increasingly moved from import agents to dealing directly with foreign manufacturers. At the same time we have rationalised the number of suppliers with the top 30 now accounting for over 70% of our business. These initiatives have resulted in significant margin gains. We have shortened our merchandise cycle by eight weeks – a major improvement. We have set up an office in Shanghai that will be used for sourcing, technical integration, production management, product development support and monitoring quality standards for Clothing and General merchandise. We will continue to drive down the number of weeks in the merchandise cycle, allowing us to reduce the risk in the fashion business and bring fashion trends to customers earlier and with more confidence. Fast response mechanisms have also been built into the cycle for certain merchandise categories.
Our strategic intent is to establish a leading Employee Value Proposition that will attract, engage and retain our best talent and ensure our people are inspired and committed to the company vision and strategic plan.
• Establish a non-negotiable commitment to EE
Establish a non-negotiable commitment to transformation and BEE by focusing on EE transformation through focused sourcing and retention, talent identification and the development and promotion of a culture of delivering on EE targets.
• Develop capability , succession and career pathways
Develop our workforce and structures to support the delivery of the strategic plans and grow our next generation of leaders from within.
• Establish a performance motivated culture
Increase accountability and proactively manage, recognise and reward performance aligned to the delivery of the strategic plan.
• Enhance values -based leadership
Increase the focus and commitment to demonstrating behaviours consistent with the
• Attract outstanding talent
Deliver a compelling employment brand that will attract outstanding talent with a strong cultural fit which demonstrate the Woolworths valuedriven behaviours.
Our Good Journey Business
Sustainability is recognised as a vital part of the Woolworths Difference by our people, our suppliers, our customers and other stakeholders. Our sustainability initiatives are embodied under the Good Business Journey and we have set and communicated our targets. We are on track to substantially achieve our original 2012 objectives and have set updated targets through to 2015. We have made good progress in addressing the sustainability impacts of our own operations and are now focusing on the lifecycle of our products to ensure that we centre our attention on the impacts of food production and the use of textiles products by customers – the areas that have the biggest energy and water impacts in the value chain.
The Good Business Journey focuses on six key areas that we believe are priorities for a retailer operating in South Africa: sustainable farming, water, energy, waste, social development and transformation.
• Sustainable farming
The focus of our work in the Food supply chain will be on extending our Farming for the Future programme to 50% of the Food business by 2015, thereby reducing pesticide, chemical and fertiliser usage further and building soil quality. We will continue to appropriately manage the impacts of farming and fishing on bio-diversity.
South Africa is a water scarce country and we will also focus on water reductions and the management of waste water in our Food supply chain.
We will continue to focus on energy efficiency in our own operations with a target to reduce relative energy usage by 40% from our benchmark year. We are designing textile products to assist customers to save energy and water in their use of these products.
Woolworths has made a commitment that all packaging will be recyclable from 2015 and 50% of food packaging will contain recycled content. In addition to this, customers will be able to make use of recycling facilities at every Engen/WW site and over 120 locations.
• Social development
Our social development focus is to contribute to South Africa’s education through our EduPlant programme, teaching children about the growing of food and providing them with food so that they can learn. Our efforts through the Making the Difference programme and MySchool further support the education focus. We aim to increase contributions from the MySchool programme to R50 million per year by 2015.
We have achieved our target of becoming a Level 4 BBBEE contributor by 2012 – a year ahead of target – and will work hard to maintain our status given the changes to some categories of the DTI scorecard. We aim to increase communication to customers, staff and other stakeholders around sustainability to create a deeper understanding of these important issues.
Our banners / stores
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