Woolies to Drop its Prices as the Company Launches R1bn bid to ‘adjust’ prices

Woolworths has committed to “more accessible prices”, and plans to “invest” R1 billion in keeping prices lower over the next two to three years.

This means in effect that it may shrink its profit margins on some products, and hike prices by less than it had previously planned. Savings due to cost cutting and efficiencies in the business, will also be channelled into price cuts.

Woolies Exceptional Quality™ New Lower Prices

In the past year, Woolworths food prices rose by 6.5% on average. This is almost double the average price increases (+3.4%) at both Pick n Pay and Shoprite over the past six months. This did not affect its sales, however: Woolworths food sales jumped almost 11% to R35.8 billion in the year to June.

Still, the company is concerned about the impact of the coronavirus pandemic on South African households.

Woolies to Drop its Prices as the Company Launches R1bn bid to ‘adjust’ prices

“Because we know our customers are under pressure, we are investing even more in our prices to ensure we remain relevant and accessible, while not compromising on our quality,” says Woolworths SA CEO Zyda Rylands.

Woolworths says it will start by extending savings worth R250 million in food prices – particularly chicken – over the next few months.

Prices will be adjusted for the entire fresh chicken range, including whole and portion chicken packs, but excluding its “Easy to Cook” range, crumbed and marinated chicken.

“While this investment will initially be most visible in our poultry products, we have also applied more promotions on everyday basics across groceries, household and personal care to be more affordable to more customers,” says Rylands.

Business Insider SA

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