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Woolies survives and thrives on pandemic food trends

The eat-at-home trend and its online delivery foray have made all the difference for Woolworths in a very tough trading environment.

Middle-class South Africans have adapted to the curfew, social distancing requirements and the controversial alcohol ban by using online delivery channels to order tasty meals and other treats that can be enjoyed from the comfort of their homes. 

In a trading update released on Monday 25 January, Woolworths says its online sales grew by 158% in the 26 weeks ended 27 December 2020. Demand for online delivery saw Woolies expand its click-and-collect offering and trial an on-demand delivery service.

The food business was the standout performer, growing sales by 10.9% in the period and 12% in the six weeks leading up to Christmas and New Year.

Price movement was 7.1%, impacted by mix, while underlying product inflation averaged 4.8% over the period — meaning that consumers opted for higher-margin products over grocery staples like baked beans or washing powder.

The eat-at-home trend is paying off for others too. Online meal-kit delivery service UCook recorded a “huge increase” in orders in 2020, according to this article in Maverick Life. The article adds that local online delivery apps like OneCart, Checkers Sixty60, Bottles, Quench and Zulzi have seen a 200% to 500% increase in daily orders since March 2020. 

Meanwhile, stay-at-home consumers ditched their mascara, little black dresses and glittery sandals over the festive period, negatively impacting Woolworths’ Fashion, Beauty and Home business, which saw sales decline by 11.2% over the period. Once again online rose to the occasion, growing by 118.8% and contributing 4% to South African sales….

DailyMaverick.co.za: Read the full article here

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