Woolworths targets women with ‘premium’ liquor offering

Woolworths is targeting female clients with its new liquor offering after its data indicated its client base needed a home to buy its liquor. It is a move that homes in on a well-heeled market that has been lucrative for rivals such as Checkers.

CEO Roy Bagattini said the group has already rolled out about 20 WCellar stores, with more in the pipeline.

“Our Woolies customers do spend a lot on alcoholic beverages, but they spend this with our competitors. We would like to offer our client base an environment where they can buy their alcohol,” he said.

Woolworths, which has set the bar high for product quality and customer experience, is capitalising on its customer base and brand loyalty, which has the potential to test the strategies of competitors such as Shoprite’s Checkers outlets.

“For us alcoholic beverages is a small part of our business but can be a bigger part ... going forward because we know our customers spend a lot of money on alcohol,” said Bagattini, who was speaking after it issued its annual earnings report.

According to Statista, a German-based data specialist, revenue generated from alcoholic drinks sold in supermarkets and convenience stores in SA amounts to $7.2bn (or just more than R128bn) in 2024.

Other players in the retail industry such as Spar and Pick n Pay have cashed in on SA’s high alcohol consumption.

Woolworths, which is facing stiff competition from Checkers in the premium food market, is not resting on its laurels. It is revamping its food stores, while also looking to be the dominant player in the pet care market.

“We have a very good store proposition. It is still the best in the market. We have many [rivals] trying to be like that. We have decided to raise the bar further and take food retailing to the next level,” said Bagattini, whose contract was extended with no specified end date.

“We have reconfigured the look of the store and put the kitchen right at the centre of the store ... we have moved the bakery at the front, coffee is available as you walk in.

“We have changed the layout a little bit with the feel very premium. We call these stores next generation.

“We have rolled out six of those already. We will be upgrading our fleet to represent that going forward. Customers are loving it. That makes it very difficult for competitors to catch up with us. Just as they think they are catching up, we then up our game.”

The group reported a 17% drop to 352.3c in annual headline earnings per share, blaming the macroeconomic environment, which deteriorated across both SA and Australia.

A final dividend of 117.5c per share was declared, a 23.9% decrease. Turnover and concession sales increased 6.2% and 5.6% on a constant currency basis.

The group recently opened its stand-alone beauty business, testing the market’s appetite.

“We have doubled our beauty business over the last few years. We will double it again. We are holding a very large share of the market today.

“We now have all the big international brands and a number of local brands. We also have our own private label offering called WBeauty, which is about a quarter of this business and growing strongly.”

mackenziej@arena.africa
khumalok@businesslive.co.za