WOOLWORTHS: Woolies Details Make the Difference

Among the South African big five retailers – Shoprite, Pick n Pay, Spar, Massmart, and Woolworths – there is a multifaceted battle underway for market share. Retail in the continent’s most advanced economy is valued at R1.61 trillion, growing at CAGR of 4% between 2022 and 2027.

Across fashion, grocery, technology, home, beauty, financial services, and many other categories, these five command the market. Their size, scope, reach, and routes to market make for a highly competitive environment, but one that effectively serves the vast majority of South Africa’s 60 million people.

How can one gain on the others? What is it that separates the group? For Woolworths, it’s the small details – the Woolies details – that matter.

Recognised as a premium retailer across South Africa and other sub-Saharan African countries, the company boasts more than eight decades of success and 290 fashion, home and beauty stores, and 651 food store locations. More than 33,000 employees help to achieve turnover and concession sales of R76.4 billion.

This success is achieved through a minute focus on details. Stores are modern and well-stocked, customer service is universally above industry standard levels, digital presence is wide and engaging, and trends are embraced.

But one area is particularly strong for Woolworths – sustainability. The company has researched, tried, tested, and refined is sustainability approach, and now the Woolworths sustainability pillars support four key goals. First is to achieve net zero carbon emissions by 2040. Second, the utilise only renewable energy by 2030. Third, to adopt a fully transparent and traceable supply chain by next year. And lastly, to have all own-brand products designed to be reused, repaired, or recycled before the end of next year. 

Within these four elements of a wider ‘Good Business Journey’, launched in 2021, Woolworths has positioned sustainability at its core. “We believe that setting ambitious sustainability goals challenges our own business to do more, and inspires others to collaborate,” the company says.

“Our vision is to be one of the world’s most responsible retailers,” it adds.

Several initiatives are underway, and many have already started having an impact as the company drives ahead on this journey which it believes will help to differentiate it going forward, focusing on the details that customers and stakeholders care about.

REDUCE, REUSE, RECYCLE

In October, Woolworths began a campaign to sell premium South African wine from some of the world’s best vineyards in cans. WCellar, the company’s liquor arm, introduced premium canned wine, offering an alternative to the traditional in an attempt to reach new demographics while bolstering environmental credentials through the use of aluminium cans – infinitely recyclable. Currently, canned wine is experiencing a boom globally with many enjoying the flexibility and ease. Now, with top winemakers contributing to this modern approach, Woolworths is dispelling the myth that the can means lower quality.

“Our customers can trust that, as with our premium boxed wines, we are offering only the highest quality product in a format that suits their needs,” said WCellar category manager, Ian Wilson.

In August, in a similar vein, Woolworths WBeauty announced that it was ready to launch a refillable range of make up products. Designed to reduce unnecessary packaging and waste, while promoting a culture of re-use, this range helps consumers to make a positive choice while losing none of the product effectiveness. 

Eyeshadows, pressed powders, bronzers, blusher, and shimmer brick – across a varied colour palette – can be purchased online or instore nationwide. 

Laura Naidu, Woolworths Beauty Head of Technology and Sourcing, said: “By introducing refillable options, we are not only providing our customers with exceptional quality products but also taking a definitive step towards reducing unnecessary packaging. Additionally, all Woolworths beauty products are made with ethically sourced ingredients, are 100% vegan, and endorsed by Beauty Without Cruelty, ensuring that our WBeauty range not only makes our customers look and feel good, but also contributes to a more sustainable future.” 

While retail teams rolled out these initiatives instore, the facilities team was busy atop the company’s footprint, installing solar panels to generate clean energy. Investments of R17.5 million have been promised across the property portfolio, including R7.3 million per annum at key locations, including the company’s head office and distribution centres in Cape Town and stores in Limpopo and the Eastern Cape. With payback period of four to five years, these projects will feed into the Good Business Journey target of only clean energy by 2030. 

SUSTAINABILITY INVESTMENT

This development addresses the issue of the company’s environmental footprint while also providing increase protection from another significant threat – loadshedding.

“The expansion of the solar installations at Woolworths’ head office building triples the capacity of the initial pilot completed in 2013, adding an additional 357 kilowatts. This will increase the solar energy capacity at the Woolworths head office to 465 kilowatts,” the company said. 

“Through numerous interventions, including the installation of fridge doors in 348 of our food markets, smart technology and energy efficiency practices across all our stores, we have achieved a two-thirds reduction in our stores’ energy intensity over the last 15 years,” it added. 

On the fashion front, a recycling scheme was launched in September which sees shoppers able to drop pre-loved denim items off at selected stores around the country. from here, Woolworths, in partnership with Taking Care of Business (TCB) Remake Programme, will create all new products as part of a circular system, reducing landfill waste. 

TCB hands materials over to budding seamstresses keen on starting their own businesses. They provide business support and financial training, and help to develop micro enterprises that can grow alongside partners like Woolworths. 

“Reducing waste to landfill and supporting circularity are key components of our Good Business Journey, so we are delighted to offer our customers the opportunity to join us and TCB in creating new life for their denim clothes instead of discarding them. To kick start the initiative, we are giving customers with WRewards membership a 20% OFF voucher for their next RE: Denim purchase with each drop-off,” said Feroz Koor, Woolworths Group Head of Sustainability. 

While individually these projects are small and bespoke, when tied together across the JSE-listed organisation, and when backed by the powerful Woolworths brand, they are truly details that make a difference. The proof is offered in two key measures – brand equity and financial results.

PROOF IN THE DETAILS  

In September, Woolworths was labelled as one of the World’s Most Trustworthy Companies by Newsweek. The independent research surveyed 230,000 evaluations across different industries in 20 countries. Already lauded locally by Brand Africa for its work around sustainability, this was another feather in the cap for a Woolworths as it looks to separate itself from rivals wherever possible. 

“Trust in the Woolworths brand is a reflection of our commitment to quality and transparency, and we will continue to meet the high standards our stakeholders expect of us,” said Group Head of Communications, Anika Ebrahim. 

For the period ending 30 June 2024, the company described its financials as ‘resilient’. Turnover and concession sales increased by 4.3%, Woolworths in SA achieved operating profit growth of 5.9%, Woolworths Food showed stand-out performance with highest like-for-like sales growth in sector and double-digit profit growth, and the acquisition of Absolute Pets was completed with great success. 

“Once again, our results have demonstrated the advantages of our diverse portfolio, our trusted brands, key competitive advantages, and the dedication and enthusiasm of our committed teams,” said Group CEO, Roy Bagattini. “We continue to make significant progress against our strategic initiatives, and are on the right course to building a bigger, better, and far stronger business – fortifying our position as South Africa’s pre-imminent retailer and one of the country’s leading brands.” 

For Woolworths, the details certainly make the difference, and as it looks for further growth and a stronger position in the homes and minds of consumers, the small things are adding up to change the equation and, ultimately, the result for this industry leader.