In its results for the first half of 2026, the group saw improved performance in its apparel businesses and continued above-market growth in its food business. This comes despite a constrained trading environment across both South Africa and Australia. Discretionary spend remains subdued in Southern Africa despite easing inflation and the lower interest rate environment. Australia’s prolonged discounting in a high-cost inflationary environment is also exerting pressure on retail footfall and spend. Woolworths group was thus pleased with turnover and concession sales growth for the period of 5.4% and 6.1% on a constant-currency basis, with positive sales growth across all segments of the business.

However, Woolies said that gross profit margins have been under pressure due to a series of initiatives. This includes ‘long-term capacity investment, targeted price investment, the stronger growth of lower margin channels and categories and increased promotions to clear excess inventory.’ The group said that the expansion of the Midrand distribution center is well progressed, despite impacting the near-term gross profit margin due to increased depreciation from the investment. While the gross profit margin is under pressure, the group said expenses have been well controlled, ensuring overall gross profit growth for the period.

Woolworths South Africa saw above-market turnover and concession sales growth of 6.8% for the period, despite weak consumer confidence and spending. The group’s Food business saw turnover and concession sales growth of 7% and 5.2%, supported by underlying volume growth and investment in its premium food offerings. The group said that revenue from Woolies Dash grew by 23%, with the online channel now contributing 7.2% to SA Food sales. Net trading space increased by 4.3% (weighted basis: 1.8%) on the prior period. Woolworths Food saw its adjusted operating profit grow by 3.5% to ZAR1,780mn ($108mn), delivering an operating profit margin of 6.5%.

Woolworths Fashion, Beauty and Home (FBH) turnover and concession sales increased by 6.2% and 6.4% on a comparable-store basis, supported by improved product availability. The Beauty and Home businesses delivered stronger growth of 8.9% and 14%, respectively. However, net trading space is decreasing by a further 1.9% as part of a plan to optimise space. FBH operating profit increased by 1.0% to ZAR771mn ($47mn), implying an operating profit margin of 9.3% for the period. In Australia, the Country Road Group (CRG) saw sales increase by 2.3% for the period and by 2.5% on a comparable-store basis.