Cape Town – Woolworths shares suffered their biggest single-day decline since the Covid-19 market crash in March 2020 after the retailer reported sluggish sales growth, raising concerns about its performance amid mounting pressure on consumers in South Africa and Australia.
The shares fell 8.52% to close at R37.78 on Wednesday, November 11, after dropping as much as 12.2% during trading, according to Business Day.
The sell-off followed the group’s trading update for the 19 weeks ended November 8, which showed that overall turnover and concession sales increased by just 0.2%, reflecting subdued consumer demand.
Woolworths attributed the weak performance to high fuel prices, inflation and interest rates, which continue to constrain household spending in both markets.
In its trading statement, the retailer said the challenging environment had resulted in shoppers “increasingly prioritising promotional offerings and essential purchases”.
Pressure
According to Reuters, the modest sales growth highlights the pressure facing the retailer as consumers cut back on spending amid rising living costs.
Woolworths’ South African food business, traditionally its strongest performer and a key growth driver, recorded turnover and concession sales growth of 1.9%. However, comparable-store growth was just 0.1%, despite average price increases of 3%.
Online food sales provided some relief, increasing by 24.1% and accounting for 9.1% of South African food sales.
The retailer’s Fashion, Beauty and Home division also struggled, recording a 0.3% decline in turnover and concession sales. While homeware sales increased by 6.4% and beauty grew by 3.1%, fashion continued to face pressure, with prices declining by 0.3%.
The group’s Australian operations presented another challenge, with Country Road Group sales falling 9.5%, or 8.2% on a comparable-store basis, as all its brands came under pressure.
The situation has been complicated by the placement of Australian department store David Jones into administration and receivership. Several Country Road brands operate as concessions within its stores.
Trading relationship
Woolworths said it was assessing the implications of the development, adding: “We are in communication with the appointed receivers and managers and are assessing what this means for the continued trading relationship.”
The latest figures come as newly appointed group CEO Sam Ngumeni undertakes a review of the retailer’s businesses to identify areas requiring improvement.
Ngumeni has previously acknowledged concerns about the fashion division, particularly product quality.
“Our customers have been very clear that the quality of the product is probably what we need to get right,” he told Business Day.
The retailer has also completed its acquisition of food manufacturer in2food, which it expects to strengthen its food offering and support profit margins amid rising distribution and online trading costs.
Higher fuel prices
According to Moneyweb, the acquisition is expected to help Woolworths offset pressure on margins resulting from higher fuel prices and the expansion of online sales.
The weak performance also comes amid broader difficulties in South Africa’s retail sector. The Citizen, reported that almost R47 billion had been wiped off the combined market value of the country’s five listed apparel retailers since the beginning of 2026.
Woolworths said it was making progress with its strategic changes and would release its next trading update in mid-January 2027, following the festive season trading period.
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Compiled by Betha Madhomu
