Woolworth supported by food sales as clothing declines

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Woolworth supported by food sales as clothing declines

Published Date: 2020-11-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Woolworth supported by food sales as clothing declines

The retail group says trading conditions across its operations continue to be impacted by Covid-19.

Woolworths says sales continue to be impacted by fewer visitors to large shopping centres, as well as its CBD and airport stores. However, groceries continue to hold up.

In a trading update for the 20 weeks to 15 November, the retail group said the recovery of its Australian operations had also been hampered by a stage 4 lockdown in the state of Victoria from early August until late October, which resulted in unplanned store closures.

Woolworths Food continued its positive momentum over the 20 weeks with volume growth and market share gains despite trade restrictions and disruptions after it temporarily closed some shops due to Covid-19. Sales grew by 10.6%, with underlying product inflation of 4.7% for the period. It said a recent announcement to cut prices of some key product lines would temper price movement going forward.

Its Fashion, Beauty and Home division continued to be affected by the constrained environment. Following a smaller than usual winter clearance sale and a big drop in demand for formal wear, sales dropped 14.6%. However, it said the launch of its summer ranges and an early start to Black Friday promotions resulted in positive sales growth in the last three weeks of the period.

In Australia, the shift to online shopping partially offset the impact of the 12-week lockdown in Victoria. Sales at its David Jones department store chain declined by 11.7%, also affected by lower demand in formal wear, with other categories performing relatively better. Excluding the Victoria stores, which traded 76% down on the prior period, the balance of David Jones grew 6.7%, with online sales jumping 65%. Country Road was also impacted by the Victoria state lockdown, with a 10.9% decline in sales. Excluding Victoria, the balance of the Country Road business grew by 6.5%, with online sale growth of 55.7%.

In total, group sales for the period increased by 3.5%, supported by the weaker rand/Australian dollar exchange rate, but declined by 2% in constant currency terms.

The retail group's shares fell 4% to R38.77 yesterday.





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