[imagesource: Daily Vox]

Welcome to 2022, where everything costs more and a week without load shedding is cause for celebration.

EskomSePush tells me today is day five without the power going out so we are almost there. Ready the bubbly.

With purse strings tightening across a wide budget range, we shouldn’t be too surprised that Woolworths’ above-market growth in its food business has come to an end.

R100 for a rotisserie chicken? Outrageous.

For close to a decade, reports Moneyweb, Woolworths Food has been growing ahead of the market. This is despite efforts by other chains (especially Checkers) to eat into their bottom line, but the good times may be coming to an end:

A trading update for the year ended 26 June illustrates a business under immense pressure. Even the top-line numbers don’t look fantastic. Sales grew by 4.2% in the 52 weeks, an improvement on the first half (3.8%), but inflation was 3.5%…

Contrast the Woolies update against rival Shoprite’s update from Tuesday (also for 52 weeks to the beginning of July), and it’s clear that one business is doing a lot better than the other.

Sales in Shoprite’s South African supermarkets unit (Shoprite, Checkers and its liquor business) grew by 12.6% on a comparable basis (its prior retail year had 53 weeks). That’s a factor of three greater than Woolies Food! Inflation was 5%, as measured by Shoprite.

Anybody who has ever wandered around one of Checkers’ more upscale stores (the one at the Constantia Emporium, for example) can see it’s going for the Woolies customer. Some things are actually more expensive than at Woolies.

Even Pick n Pay wants in on the action:

Woolworths executives are surely concerned about Pick n Pay’s plan to effectively split its core brand into two so that it can effectively target the higher-end as well as the ‘very’ middle-class shopper.

This strategy is beginning to take shape, with 10 stores already upgraded to focus on either the ‘Project Red’ (middle) proposition or compete head-on with Woolies and Checkers in places like Constantia and Lonehill.

Offer R90 rotisserie chickens on par with Woolies and anything could happen. How about selling ripened avos at a reasonable price?

There’s also the fact that Checkers Sixty60 totally dominates the on-demand grocery delivery game, which has continued to flourish even as life returns to some degree of COVID-19 normalcy.

No pressure, Woolies.

[source:moneyweb]