Woolworths expects profit for the 52 weeks to June 28 to fall more than 20% year on year, hit by a drop in sales owing to measures to prevent the spread of the coronavirus. In its markets of South Africa, Australia and New Zealand, governments have enforced weeks-long lockdowns or urged citizens to stay home, prompting Woolworths to close outlets selling clothing, beauty and homeware products. While it benefited from a 27.6% rise in food sales in South Africa in the four weeks to the end of March as consumers rushed to stock up on goods, this was accompanied by a similar decline in its fashion, beauty and home unit.
It also saw lower sales in its Australian and New Zealand businesses, namely clothing outlets Country Road and David Jones. The company said this, combined with the fall in sales, would likely result in a more than 20% decline in profits, though the exact impact was still difficult to quantify. To try and mitigate the damage, it said it was focusing on boosting online sales and cutting costs and capital expenditure, with only critical projects moving forward. The board and senior executive team will forgo 30% of their fees and salaries over the next three months, with the savings used to provide support to staff members that face extreme hardship as a result of the current crisis.