NEWS ANALYSIS
How can Woolworths shake off the doldrums?
The just-released trading update from Woolworths points to 2017 being another extremely tough year for a group that was, until as recently as the end of 2015, one of the darlings of the investment community. The outlook for the group, and the sector, is now so grim it is difficult to imagine what management could do to recover its top-notch rating within the next 12 months. "It’s really tough out there, the market is saturated, consumers are under tremendous pressure, Woolworths’ best hope is for a wipeout of the rand, that would boost its income from Australia even if the operations there did not perform," one analyst said. In 2014, Woolworths completed the ambitious R22bn acquisition of the Australian retailer David Jones and was delighting shareholders and analysts with talk of being a substantial player in the southern hemisphere. The biggest acquisition by a South African retailer thrilled Woolworths’ traditional South African shareholder base, who had been concerned that the g...
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