South Africa: online growth, investment in prices

Date : 04 November 2020

Jon Wright

Head of Insight - RA EMEA

Following updates from South Africa-based Woolworths and Walmart-owned Massmart, we round up news from the retailers.

Woolworths SA invests in prices…

Woolworths is to invest ZAR1.0 bn (US$61.4m) in prices over the next two to three years. ZAR750m (US$46.0m) will be invested in its food business and ZAR250m (US$15.3m) in its fashion business. In the first phase Woolworths will invest ZAR500m (US$30.7m) split equally between the two businesses.

The retailer said it was targeting the fresh category specifically, including fresh chicken, a key staple protein in the country. It will also spend on its wider offer, with the outlay aimed at helping it to offer great products ‘at great value to customers’. Woolworths will also run ‘ more promotions on everyday basics across groceries, household and personal care to be more affordable to more customers’.

…Following wider review of its strategy

Following on from its results announcement, Woolworths’ new chief executive, Roy Bagattini, has given some insights into how the retailer is aiming to evolve in the short term. Bagattini said its Australia-based David Jones business had ‘not transitioned fast enough’. It was noted the roll out of its petrol forecourt stores through its partnership with BP ‘was progressing well’ and helped offset the fact that the David Jones food business continues to be loss making. The struggles being faced by Woolworths’ Australia business has been balanced by those in its home market, where its food business continues to perform strongly. In its FY results the company said its Food unit’s sales rose 10.7%, while online sales increased by 57.2%.

Massmart makes new appointment…

Massmart has appointed Sylvester John, Walmart North America’s vice president for Last Mile Delivery, to lead its ecommerce team. The retailer said John would be focused on developing the retailer’s wider omnichannel offer and last mile delivery options. In its H1 results Massmart reported Game’s online sales increased by 100%, while its Makro banner’s online sales rose by 84%. Announcing the appointment, Massmart said John’s ‘remit… will be to leverage his experience to assist his Massmart peers in establishing a market leading e-commerce and omni-channel capability within the Massmart group’.

…As Game introduces new look store design in Gauteng

As Massmart looks to evolve what Game offers shoppers, it has opened its first ‘future-ready concept store’, which has upweighted its technology and the store’s look and feel. The store, in the Mall of Africa in Johannesburg, provides free wi-fi, self-checkouts, electronic shelf-edge labels and QR codes to enable shoppers to easily move to find products on Game ecommerce site. The new store design has also expanded the range it offers in apparel, party and children’s products and wellness, amongst others.

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