How Woolworths Went From 1 Store In Cape Town To Over 700 Store Locations

For over 9 decades, Woolworths has been one of the biggest retailers to ever come out of South Africa, it primarily targets middle class and wealthy consumers.

Affectionately known as Woolies, the company offers a vast number of different retail caterings including fashion, beauty, accessories, food, groceries and full-line homeware.

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Over the years, Woolworths Holdings Limited(WHL) has expanded into a leading retail group, which has a massive presence in the regions of sub-Saharan Africa, New Zealand and Australia.

The company consists of 3 operating divisions: Woolworths South Africa, Country Road Group and David Jones.

Unlike many retailers which go into franchising, Woolworths only operates through a corporate owned basis.

The company currently has 299 full line stores, 52 Fashion, Beauty and Home only stores, 194 food stand alone stores in South Africa and 68 stores throughout the rest of Africa.

Woolworths employs 45 000 employees across 13 countries, which thus makes it one of the largest employers in the African continent.

Like most in the retail world, Woolworths Holdings Limited also has its own range of financial services, which includes personal loans, credit cards and insurance.

Woolworths operates in a very congested market stiffled with competition from all corners of the earth.

On the food side, they have competition from the likes of Shoprite, Pick N Pay and Spar, while on the clothing side of things, it competes with the Foshini Group and Mr Price.

Despite this massive competitive environment, Woolworths profit margins are superior to most of those retailers.

Just this year alone, the company has increased its sales by R85.9 billion. This mammoth numbers were achieved despite covid-19 and July unrest taking place.

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BACKGROUND

In order to understand the story of Woolworths more clearly, let’s go back to the 30th of October 1931, in the dining room of the now closed Royal Hotel, when Max Sonnenberg officially launched the company in Cape Town.

Woolworths hit the ground running and was an immediate success, Sonnenberg had clearly captured the public’s imagination with his dynamic store policies that set the company apart from its competitors.

With the early success Woolworths was having, it was crystal clear Sonnenberg’s new business model had a great potential to expand nationwide but unfortunately, he was lacking in the finance department.

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Expansion In SA

Seeing this dilemma, Sonnenberg’s friend, Elie Susman, stepped up to the scenes by putting his own money for the expansion of Woolworths, this made him the first official business partner.

In 1934, a 2nd store was opened in Durban, which was quickly followed by two more stores in Port Elizabeth. Johannesburg followed suit a year later.

Since then, the company has expanded to the rest of the Provinces in South Africa and consistently built up its reputation for superior quality, exciting innovation, excellent value and over the top customer service.

As the internet was starting to take shape, Woolworths introduced its store card in 1994

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Country Road Group

Woolworths Holdings Limited acquired a controlling shareholding stake in Country Road Group around mid 1997, the remaining shares were bought in 2014.

Country Road was originally established in 1974 as a producer and supplier of women’s casual cotton shirts. In 2004, the company was rebranded and since then, it has evolved into a leading lifestyle brand known mostly for high quality apparel, accessories and homeware.

Over the years, Country Road Group has expanded into a household brand by:

• Launching Trenery in 2009.
• Acquiring Witchery in 2012.
• Acquiring Mimco in 2012.
• Acquiring Politix 2016.

In 2000, Woolworths Financial Services formed a joint venture with Barclays Bank, this provided Woolworths clients with financial products and services.

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David Jones

In 2014, WHL acquired the popular Australian David Jones for $2.2 billion.

David Jones first opened its doors in Sydney around 1838, its get-go mission was to sell the best looking exclusive goods. There’s now over 40 David Jones stores in Australia and New Zealand.

Expansion in Africa

In 2001, Woolworths started venturing outside South Africa and launched 2 stores in Botswana. From the onwards, the company established over 68 stores in 11 African countries including the likes of Swaziland, Lesotho, Botswana, Zambia, Mozambique, Mauritius, Uganda, Kenya, Tanzania and Namibia.

Woolworths has promised to continue adding new stores, as well as extensions and modernisations on the African continent.

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Accessibility

In late 2020, Woolworths announced a R1 billion investment to show its commitment in making its products more accessible to consumers in the next 2 – 3 years.

This investment will include a R750 million into pricing for its foods business and the remaining R250 million for its fashion business.

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In Conclusion….

Max Sonnenberg’s entrepreneurial skills catapulted Woolworths into one of the largest retail chains in the African continent.

He mostly abided by this philosophy, “if you can dream it, you can do it,” and always striving to put the consumer first, staying innovative and engaging with customers on a consistent basis.

As well as recovering from inevitable mistakes in business, the Woolworths brand is certain to continue growing from strength to strength.

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