South Africa: Eat-At-Home Trend and Online Delivery Foray Make the Difference for Woolies

analysis

Positive sentiment surrounds SA retail shares after Woolworths advised that it expected positive trading numbers for the six months to December 2020. This follows last week's healthy reports from Mr Price and TFG, which reported solid third-quarter sales and profit numbers after the coronavirus sales slump.

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, retailer 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...

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