Woolworths shares fell by about 9% in morning trade on Wednesday. The drop came after the retailer released a trading update showing that its sales growth has stalled.
The group said turnover and concession sales grew by only 0.2% for the 19 weeks ended 8 November 2026. In constant currency, growth was 0.1%, according to the update.
Woolworths said its 2027 financial year started slowly. It said high fuel prices, inflation and interest rates were holding back what shoppers spend. Customers are choosing promotions and essential items more often, the group said.
The retailer said trading was difficult in both South Africa and Australia. Woolworths South Africa grew turnover and concession sales by 1.6% for the period.
The food business grew sales by 1.9%. On a comparable store basis, food sales grew by just 0.1%. Online sales growth sped up to 24.1% and made up 9.1% of South African food sales.
“We continued to focus on delivering quality and innovation with convenience and value, achieving strong growth in newness,” the retailer said in its Sens trading update.
Woolworths also confirmed it has completed its purchase of in2food, a South African maker of prepared convenience foods. The company was one of the biggest suppliers to Woolworths Foods. Woolworths bought all of its shares but did not share the price it paid.
The group said the deal would “support our gross profit margin to offset the dilution from higher fuel prices and online growth”.
Sales in the Fashion Beauty Home division fell slightly by 0.3%. Prices rose by 1.2% on average over the period, while fashion prices dropped by 0.3%. Homeware sales grew by 6.4% and beauty sales grew by 3.1%, despite more competition in beauty.
The Woolworths Financial Services loan book grew by 4.1% year on year to the end of October 2026. The group said a weaker economy led it to set aside more money for bad debts.
“While we remained disciplined in ensuring quality book growth, the deteriorating macroeconomic environment resulted in a higher impairment coverage,” it said. The annualised impairment rate for the four months to 31 October rose to 7.3%, up from 6.7% a year earlier.
Country Road sales fell by 9.5% for the period. On a comparable store basis, they fell by 8.2%, with all of its brands under pressure.
The group said rising interest rates and the cost of living hurt shopper mood, foot traffic and spending. It said there was heavy discounting across the retail sector. Better stock levels and fewer markdowns helped improve its margin, Woolworths said.
Several Country Road Group brands trade as concessions inside David Jones stores. David Jones has been placed into administration and receivership.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.