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Woolworths (South Africa)

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Woolworths Holdings Limited
Company typePublic
JSE: WHL
ISINZAE000063863
IndustryRetail
Founded1931; 94 years ago (1931)
FounderMax Sonnenberg
Headquarters93 Longmarket Street, Cape Town, South Africa
Area served

Botswana
Eswatini
Kenya
Lesotho
Mauritius
Mozambique
Namibia
South Africa
Tanzania
Zambia
Key people
Roy Bagattini (Group CEO)
Hubert Brody (Chairman)
ProductsClothing, footwear, accessories, groceries, beauty products, homeware and financial services.
RevenueIncrease R76.4 Billion (2024)
Increase R5.81 Billion (2024)
Increase R4.50 Billion (2024)
Number of employees
45,000
DivisionsWoolworths (South Africa)
Country Road Group (Australia)
Woolworths Financial Services
Websitewoolworthsholdings.co.za
woolworths.co.za

Woolworths Holdings Limited is a South African multinational retail company that owns the South African luxury department store chain Woolworths and the Australian retailer Country Road Group.

The South African division of Woolworths comprises luxury goods retail, including fashion, homeware, and beauty products, with many stores incorporating a premium food retail offering. Stand-alone food stores and “Food Stops” attached to Engen petrol stations are located in urban areas. Woolworths operates 218 full-line stores and 430 stand-alone food stores in South Africa,[when?] as well as 64 stores across the rest of Africa.[when?] The company retails clothing and accessories under several brands, including Studio W, RE:, and Edition, while also representing the Group’s Australian brands, Country Road, Witchery, and Trenery.

The Group’s Australian-based specialist apparel and homewares retail subsidiary, Country Road Group, operates 557 stores[when?] and an additional 242 concession locations within David Jones. The Group trades under distinct brands, namely Country Road, Witchery, Trenery, Mimco, and Politix.

History

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Founded by Max Sonnenberg, Woolworths first opened its doors on 30 October 1931 in Plein Street, Cape Town, in the dining room of the recently closed Royal Hotel. Its initial success led to the opening of two additional stores in the Cape region.[citation needed] It became evident that the new business had the potential to expand nationwide, although a lack of capital initially hindered this prospect. Sonnenberg’s friend, Elie Susman, provided the necessary funds for the expansion into the Transvaal and subsequently became his business partner.[citation needed]

The first Woolworths store, in the stately dining room of The Royal Hotel, Cape Town.
Braai-related display inside a Woolworths store in The Constantia Village shopping center, in Constantia, Cape Town, South Africa.

The choice of the name originated from Sonnenberg’s friendship with a London shipper and financier, Percy (P.R.) Lewis. Lewis was a director of Australasian Chain Stores (ACS), a London shipping and finance house established to service a rapidly expanding Australian business founded by W.T. Christmas. London shippers frequently provided finance and selected goods, sight unseen, which were then dispatched to their clients. Given that the (now defunct) American company F.W. Woolworth Company had no desire to trade in Australia, “Father” Christmas – as he was known – adopted the name for his new enterprise. Lewis proposed to Sonnenberg that ACS could add to “Father” Christmas’s order sheet and send a scaled-down quantity of each successive item in Australia to South Africa. Accordingly, Sonnenberg adopted the name for his venture. Two years later, a South African court ruled that sufficient goodwill had been established to dismiss an injunction brought by the American retailer against the use of the name.[1]

In 1998, Woolworths acquired a controlling interest in the Australian clothing retailer Country Road. However, the company was unable to take Country Road private due to Solomon Lew's refusal to sell his 11.67 % stake in the business.[2][3] Woolworths assumed full ownership of Country Road in July 2014 when it purchased Lew’s shareholding for US$200 million.[4][5]

In 2014, Woolworths purchased the Australian department store business David Jones for A$2.1 billion. The company subsequently sold David Jones to private equity firm Anchorage Capital Partners in December 2023.[6]

Corporate affairs and culture

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Good Business Journey

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Launched in 2007, the Good Business Journey set specific public sustainability targets for the company.[7] It also aims to ensure a consistent approach to addressing sustainability issues across its global supply chain, as part of Woolworths’ declared ambition to be the most sustainable retailer in the Southern Hemisphere.[8]

In 2016, the company introduced its GBJ 2020 goals, which included integrating the programme into the Group’s Australian businesses – now accounting for over forty per cent of turnover.[9][10]

The WHL Group’s GBJ 2020 commitments include contributing over R3.5 billion to communities across the Group over the subsequent five years; saving 500 billion litres of water during the same period; halving the company’s energy impact by 2020 and achieving 100 per cent clean energy by 2030; driving responsible sourcing of all key commodities by 2020; and ensuring that every private-label product sold incorporates at least one sustainability attribute by 2020.[9]

Sustainable development goals

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Zero packaging waste to landfill

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In June 2018, Woolworths announced its intention to achieve zero packaging waste to landfill by 2022, with the aim of ensuring that none of its packaging ends up in landfills. This objective requires the use of 100 per cent recyclable materials for its packaging, along with a supportive recycling infrastructure.[11][12] Woolworths also committed to phasing out single-use plastic shopping bags completely by 2020.[13]

In August 2018, the Palmyra store in Claremont introduced in-store recycling vending machines.[14]

Reusable bags

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In October 2018, Woolworths launched an in-store reusable bag trial as part of its efforts to phase out plastic bags.[15] Beginning on 5 November 2018, these new, entry-level reusable shopping bags were made available in four stores across the Western Cape (V&A Waterfront, Palmyra, Pinelands, and Steenberg), and have since been distributed to additional stores.[16] Woolworths Steenberg operated without plastic bags during the trial, giving customers the choice of either purchasing a reusable bag or using their own. Single-use plastic bags remained available in the other three stores. In April 2019, further stores – including those at Maroun Square, Moreleta Village, and Delcairn Centre – were designated as plastic bag-free.[17]

Partnership with Pharrell Williams

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In 2015, Woolworths entered into a partnership with American musician Pharrell Williams,[18][19] marking the first strategic collaboration of its kind for a South African retailer. Williams assumed the role of Style Director in a series of sustainability-focused projects. The campaign comprised four key elements: entertainment, the showcasing of young talent, fundraising for education, and the promotion of sustainable fashion.

Black Economic Empowerment Employee Share Ownership Scheme

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In July 2015, Woolworths announced the maturity of its Black Economic Empowerment Employee Share Ownership Scheme (BEEESOS).[20]

Launched in 2007 as part of the company's Good Business Journey, the scheme forms part of Woolworths’ commitment to socio-economic transformation. The retailer was the first to introduce an empowerment initiative in which BEEESOS shares were allocated to previously disadvantaged employees based on both length of service and seniority. At the time, the scheme accounted for approximately 10% of Woolworths’ ordinary share capital.

Woolworths’ strong performance over the preceding eight years generated R2.4 billion for the scheme's participants, who also received dividends totalling R332 million during the scheme's lifetime.

Controversies

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Christian magazines

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In October 2010, Woolworths faced criticism for its decision to remove Christian magazines from its shelves and discontinue their sale. This move sparked significant backlash from the Christian community, with many calling for a boycott of the retailer.[21] Woolworths maintained that the decision was purely business-driven, with CEO Simon Susman attributing it to declining sales.[21] Following the public outcry, the company reinstated the five magazines to its shelves.[22]

Affirmative action

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See also: Black Economic Empowerment

In September 2012, Woolworths faced allegations of racial discrimination after being accused of excluding white job applicants and staff.[23] The controversy arose from claims that job advertisements on the company’s career website specified that positions were open only to "African, Coloured, and Indian" candidates.[24]

Following the backlash, Woolworths amended the wording of its job advertisements to state: "In accordance with Woolworths' Employment Equity approach, preference will be given to candidates from designated groups."[23] Various public groups and communities called for a boycott of Woolworths, similar to the response faced by the Dis-Chem pharmaceutical retail group after it announced a policy not to consider white applicants for certain positions.[citation needed]

Promotion of LGBTQIA+ merchandise

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In June 2023, Woolworths faced public criticism from various groups, including religious organisations such as the Muslim Judicial Council and Christian groups, for promoting LGBTQIA+ merchandise to young customers.[25] In response to the backlash, Woolworths issued a statement affirming its commitment to the marketing campaign as part of Pride Month, stating that it would not retract its support.[26]

Plagiarism

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Pillow designs

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In October 2013, Woolworths faced allegations of plagiarism after South African artist Euodia Roets accused the retailer of using her designs without permission. Roets claimed that Woolworths had retained her designs as samples following failed contract negotiations and later used them on a cushion sold in its stores.[27] In an article detailing her allegations, Roets presented side-by-side comparisons of her original artwork and the Woolworths cushion, highlighting the striking similarities. Woolworths denied the allegations on its website.[28]

Roets further alleged that Woolworths had copied text from Wikipedia's Hummingbird article without attribution, in violation of the Creative Commons License. The text featured on the design was an exact match to portions of Wikipedia's content. When questioned about this, the official Woolworths South Africa Twitter account responded, "We've checked with our lawyer; Wikipedia does not own the content."[29]

Baby carriers

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In January 2019, Woolworths withdrew a line of baby carriers following accusations that the design had been copied from South African brand Ubuntu Baba and sold at a significantly lower price. The controversy emerged after Shannon McLaughlin, founder of Ubuntu Baba, published a blog post outlining her claims, which quickly gained traction on social media.[30]

McLaughlin alleged that several of her company's baby carriers had been purchased by Woolworths and delivered to its head office in June 2017, approximately a year before Woolworths launched its own version.[31] Woolworths later admitted that its baby carriers were derivatives of Ubuntu Baba's design and issued a formal apology.[32]

Soft drink imitation

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In early 2012, the South African Advertising Standards Authority (ASA) ruled that Woolworths' Vintage Cold Drink range was an imitation of Frankie's Soft Drinks. The ASA found that Woolworths had intentionally copied the phrase "Good Old Fashioned Soft Drinks" to market its product, thereby infringing on Frankie's intellectual property rights. Woolworths agreed to remove the range immediately.[33] Following the ruling, Woolworths South Africa CEO Ian Moir acknowledged the negative public reaction, stating: "Public opinion is so much against us and, whether we're right or whether we're wrong, customer opinion is against us."[34]

References

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  1. ^ Susman, David (2004). An African Shopkeeper. Cape Town: Fernwood Press. p. 27. ISBN 978-1-874950-78-3.
  2. ^ Evans, Simon (26 November 1999). "$80m debt load sinks Sportsgirl". Australian Financial Review. Retrieved 17 February 2024.
  3. ^ Treadgold, Tim (9 July 1999). "Out of South Africa". Australian Financial Review. Retrieved 17 February 2024.
  4. ^ Verrender, Ian (24 June 2014). "Woolworths' offer to buy Lew out of Country Road raises questions". ABC News. Retrieved 17 February 2024.
  5. ^ Greenblat, Eli (25 July 2014). "Solomon Lew accepts Country Road offer, ending 17 year battle". The Sydney Morning Herald. Retrieved 17 February 2024.
  6. ^ Koehn, Emma (19 December 2022). "'Storied history': David Jones gets new owners just in time for Christmas". The Sydney Morning Herald. Retrieved 17 February 2024.
  7. ^ "Woolworths sets Good Business Journey goals for 2020". www.bizcommunity.com. Retrieved 31 July 2020.
  8. ^ "Woolworths Holdings Limited Annual Report" (PDF). marketscreener.com. Retrieved 31 January 2020.
  9. ^ a b "Woolworths sets Good Business Journey goals for 2020". Bizcommunity.com.
  10. ^ "Company Snapshot". Fin24.
  11. ^ "Woolworths is ditching its wasteful plastic packaging – here's what is changing". BusinessTech.co.za.
  12. ^ "Woolworths commits to being 100% recyclable by 2022 | CapeTown ETC". www.capetownetc.com. Retrieved 11 December 2019.
  13. ^ Writer. "Woolworths is ditching its wasteful plastic packaging – here's what is changing". Retrieved 31 July 2020.
  14. ^ "Woolworths pilots SA's first in-store recycling vending machine". Fastmoving.co.za. Retrieved 11 December 2019.
  15. ^ "These Woolworths stores are switching to reusable plastic bags – and plastic bags have been entirely banned at one outlet". Business Insider.
  16. ^ "Next phase in plastic bag free trial announced". The Green Times. 28 May 2019. Retrieved 11 December 2019.
  17. ^ "Woolworths to open more 'plastic bag free' stores". www.bizcommunity.com. Retrieved 11 December 2019.
  18. ^ Arts Desk (10 April 2015). "Pharrell Williams collaborating with Woolworths". mg.co.za. Mail & Guardian. Retrieved 9 April 2020.
  19. ^ "Pharrell Williams partners with Woolworths". citizen.co.za. 9 April 2015. Retrieved 11 December 2019.
  20. ^ "R2.4bn BEE pot matures for Woolworths staff". Fin24.
  21. ^ a b "Woolworths bans Christian mags". News24. Retrieved 3 September 2017.
  22. ^ Woolworths repents – Times LIVE
  23. ^ a b Peter Church (3 September 2012). "Racist Woolworths SA defiant". SA Promo. Archived from the original on 17 January 2013. Retrieved 14 January 2013.
  24. ^ Fadia Salie (4 September 2012). "Woolworths douses racial fires". News 24. Retrieved 14 January 2013.
  25. ^ van Zyl, Ané (7 June 2023). "PRIDE-REEKS Woolies 'wil brûe bou' met veldtog: 'Hartseer' oor party mense se reaksie". Beeld. p. 3.
  26. ^ van den Heever, Megan (13 June 2023). "Woolworths feels heat from religious groups over Pride campaign". The South African. Archived from the original on 13 June 2023. Retrieved 14 June 2023.
  27. ^ Pedeboy, Delphine (21 October 2013). "Copyright, credit, Woolworths and the hummingbird". Ground Up. Retrieved 26 July 2016.
  28. ^ [1] Cushion Design Allegation
  29. ^ "Woolworths South Africa Twitter". Twitter. Retrieved 22 October 2013.
  30. ^ Claasen, Larry (10 January 2018). "Red-faced Woolworths apologises and pulls 'similar' baby carrier". www.businesslive.co.za. Retrieved 10 January 2019.
  31. ^ Tswanya, Yolisa (10 January 2019). "Woolworths removes baby carriers over 'copying' controversy | Cape Times". www.iol.co.za. Retrieved 10 January 2019.
  32. ^ Whitfield, Bruce (9 January 2019). "Woolworths admits trouble with its baby carrier design, yanks its Ubuntu Baba lookalike from shelves". BusinessInsider. Retrieved 10 January 2019.
  33. ^ Peters, Sherlissa (2 February 2012). "Woolworths to remove entire soft drinks range". iol. Retrieved 6 June 2012.
  34. ^ Nicolson, Greg (1 February 2012). "Frankie's vs. Woolworths: Good old-fashioned David-and-Goliath battle". Daily Maverick. Retrieved 6 June 2012.
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