http://www.property24.com/articles/woolies-to-open-16-stores-outside-sa/14243

25 Oct 2011
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Woolies to open 16 stores outside SA
21 Oct 2011



Johannesburg Stock Exchange listed company, Woolworths Holdings Limited retail group aims to open 16 stores in other African countries this year.


The Palmyra store is the greenest store in the group. Woolworths was recently recognised as a global leader in sustainability by the World Economic Forum (WEF) and the Dow Jones.
This will take the total number of its stores outside of South Africa to 60 and the new stores will be larger than the current ones.

Woolworths says retail space will increase by 42 percent in the current financial year and by an estimated 145 percent over the next three years.

According to Glenn Gilzean, Woolworths Group director for retail operations, the retail sector in many African countries is beginning to formalise with the development of shopping malls.

He says that increased investor confidence across a number of key industries including retail is helping to fuel greater interest in Africa.

“We regard trading beyond South African borders as an opportunity for growth and we believe it will deliver a meaningful profit contribution.”

Property investors believe Africa’s real estate industry offers unprecedented investment opportunities and is poised for growth going forward.

At the inaugural Africa Property Investment Summit held last month, Brett Abrahamse, business development manager at Liberty Properties said Africa’s real estate industry is booming with the retail sector set to drive demand and growth in many parts of Africa’s real estate markets.

Abrahamse pointed out that investors are eyeing countries such as Ghana, Nigeria, Angola, Zambia, Botswana, South Africa, Namibia and South Sudan.

Last week, Woolworths announced that it had signed a joint venture with a listed Nigerian company Chellarams Plc and will open three stores in December with plans to open seven more stores over the next two years.

The two stores will be located in the most sought-after Nigerian city of Lagos, at The Palms and Ikega and the third store will open at Polo Park in Enugu State.

In a media statement, John Fraser, divisional executive for Woolworths International says the group is confident about its investment in Nigeria and pleased with the growth prospects of the Nigerian market.

Fraser says Nigeria has a large population with significant and growing middle and upper income groups and Woolworths has found the right partner in Chellerams Plc to grow its brand in Nigeria.

Asked about the biggest concerns retailers experience in the current property market, Gilzean says there is a notable competition for limited prime retail space in many African countries.

Last month, Woolworths formed a joint venture in Tanzania and Uganda with businessman and former franchise partner Ali Mufuruki of Tanzania.

Gilzean explains that Woolworths has had a presence in other African countries for over 10 years and currently has stores in Botswana, Namibia, Lesotho, Swaziland, Ghana, Kenya, Tanzania, Uganda, Zambia and Mozambique.


Woolworths plans to open 16 stores outside of South Africa taking the total number of its stores outside of South Africa to 60 and the new stores will be larger than the current ones.
Following the announcement to open stores in Nigeria, he says Woolworths intends to open stores in Mauritius and Angola.

Woolworths is also monitoring a number of markets closely and at this moment, has no immediate plans to enter Zimbabwe.   

Johannesburg Stock Exchange listed retailer of food, general merchandise and clothing Pick n Pay opened its first store in Bagatelle Mall in Mauritius last month.

He says Woolworths regards trading beyond South African borders as an opportunity for Woolworths growth and are confident about the prospects of the group’s investment in Uganda and Tanzania and indeed across Africa.

“Consumer spending accounts for more than 60 percent of the African GDP and this will increase with the growth of the upper and middle income groups,” he says.

Woolworths business model

On property ownership and rentals, Gilzean says the Woolworths’ local joint venture partners entails that they will either lease or purchase the preferred retail space.Woolworths preference is to rent retail space in South Africa.

The joint venture is part of Woolworths plans to accelerate its expansion into Africa.

Woolworths has moved away from the franchise model it had in the past in some African countries. “We believe this model isbetter for our customers, our partners and will offer a better profit model for our business.”

He says joint ventures will enable Woolworths to deliver to customers the best retail offering possible tailored to meet the local needs. Our partners bring knowledge of local trading conditions and Woolworths brings quality, value, innovation and fashion that our South African customers know and appreciate.

Woolworths, the brand

Woolworths was founded in 1931 by Max Sonnenberg whose belief was that success lies in providing customers with superior quality merchandise at reasonable prices.


Consumer spending accounts for more than 60 percent of the African GDP and this will increase with the growth of the upper and middle income groups,says Glenn Gilzean, Woolworths Group director for retail operations.
Gilzean explains that Woolworths has earned its unique position in the South African retail landscape by remaining true to its core values of quality, integrity, value, service, style, innovation and sustainability.

“Customers have come to appreciate good quality at an affordable price and Woolworths strives hard to make ‘the difference’ for its customers every day.”

Woolworths retail chain extends throughout Africa and into the Middle East, trading through more than 400 stores and holds a majority share in the Australian retail chain, Country Road.

“We’re excited to be able to offer more customers Woolworths “difference” – superior quality, exciting innovation and excellent value.”

He adds that the Woolworths brand will appeal to aspirant African customers, with an increasing amount of disposable income.

“Shareholders and investors will benefit from an increase in our trade.”

Woolworths was recently recognised as a global leader in sustainability by the World Economic Forum (WEF) and the Dow Jones.

The WEF report highlights sustainable and innovative business practises from companies in emerging markets.

Woolworths was one of only three in Africa and the only retailer to make the list. Other businesses in Africa include Equity Bank (financial services) in Kenya and Sekem (agriculture) in Egypt.

Woolworths was included in the Dow Jones Sustainability Index (DJSI) which tracks the financial performance of the leading sustainability-driven companies worldwide.

Woolworths is the only retailer in South Africa and one of five South African companies to be listed in the DJSI. – Denise Mhlanga

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