Woolworths blames Middle East conflict for sluggish performance
· Citizen
Premium retailer Woolworths has blamed the conflict in the Middle East for its sluggish performance during the second half of its financial year.
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In the group’s trading update for the 52 weeks ended 28 June 2026 released on Thursday, Woolworths said it had a good first half of the year; however, the second half presented a more challenging operating environment, as the conflict drove fuel prices and inflation higher.
The second half of the year saw consumers with less money to spend and Woolworths’ operating costs increasing.
“This, coupled with the resumption of interest rate increases across South Africa and Australia, saw consumers increasingly prioritise promotional offerings and essential purchases,” said the retailer.
Growth slows down in second half
Group turnover and concession sales for the period grew by 4.3%, and by 4.8% in constant currency, with positive sales growth in all segments of the business on a full-year basis. Growth in the second half, however, slowed to 3.3%, reflecting a particularly challenging final quarter.
In South Africa, the retailer delivered turnover and concession sales growth of 5.4% for the year.
Trading momentum moderated to 4.1% in the second half, with particular weakness in the fourth quarter, reflecting the impact of a strong comparative base, softer consumer demand and disruptions to trade.
“This impact was more pronounced in Fashion, Beauty and Home,” said Woolworths.
Woolworths Food delivers
The retailer’s food division delivered turnover and concession sales growth of 5.7% and 3.7% on a comparable-store basis. It attributed this growth to “the quality and innovation of our product offering and an ongoing focus on an elevated in-store customer experience”.
“Price movement averaged 4.7% (3.9% excluding meat) for the period. Sales growth softened to 4.4% in the second half, as a result of slower growth in select produce and grocery categories.
“Revenue through the Woollies on-demand service grew by 19.6%, with the online channel contributing 7.3% to SA Food sales. Net trading space increased by 3.5%, and by 2.5% on a weighted basis, on the prior period.”
Fashion, Beauty, Home
The retailer said its Fashion, Beauty, Home division’s turnover and concession sales increased by 4.4% and by 4.0% on a comparable-store basis.
“While trading momentum accelerated in the first half, the war in the Middle East had a pronounced impact on demand, particularly in the fourth quarter, resulting in H2 sales growth slowing considerably to 2.6%,” said Woolworths.
The Home division delivered strong growth of 11.7%, supported by an “enhanced Homeware offering”. Beauty grew by 7.9%, Woolworths said, despite increased competition in the category.