First, load shedding came for our internet, and we said nothing (other than a moan on Facebook, using precious mobile data).
Then it came for our country’s GDP, and we started looking at those new Australian visas.
Now load shedding is hitting Woolies where it hurts most, and rumour has it that folks in Constantia are up in arms.
We joke, but the bottom line is that, according to the retail giant, load shedding has had a massive effect on its bottom line.
This from Fin24:
Woolworths has blamed slower sales on load shedding and unseasonal weather.
On Monday morning, Woolworths released a trading update for the 26 weeks to 29 December, and warned that its headline earnings will drop by between 15% to 20% when it releases its full results next month.
“In South Africa, the constrained economic environment, exacerbated by the disruption to trade caused by power outages and unseasonal weather in parts of the country, contributed to slower December trade,” Woolworths said in a statement.
Gauteng and KwaZulu-Natal were hit by heavy rain at the start of the crucial December trading season, while the Western Cape saw unseasonal rain and cooler conditions over December.
Load shedding I can understand, but are we buying this weather line?
Then again, nothing worse than getting all done up in your activewear en route to Woolies, and then the weather dictates that you must cover up.
Almost not worth bothering.
Some of the blame has been laid at the feet of outgoing Woolworths CEO, Ian Moir, with Moneyweb reporting:
Its $2 billion foray into Australia led by outgoing CEO Ian Moir has been its biggest drag on performance.
Moir purchased David Jones in 2014, and since then the chain has struggled amid a tough economy, competition from online rivals and a disruptive refurbishment at its flagship store in Sydney.
In contrast with the year before, the critical trading periods of Christmas and Boxing Day – with the latter especially busy in Australia – fell in the first, rather than the second half, of Woolworth’s financial year.
When adjusted for this shift, David Jones sales fell by 0.5%. Some analysts believe Moir’s purchase of David Jones was not well executed. He is due to step down in February, and be replaced by Levi Strauss executive Roy Bagattini – a change welcomed by some investors keen for a fresh mind at the top after nine years under Moir.
Pay attention – when you ask to speak to the CEO because your preferred brand of low-GI pasta wasn’t stocked, you’ll have to ask for Roy now.
Also, I shudder to think what will happen if the price of a Woolies cappuccino goes up as a result of this financial pinch. The switch in Discovery’s Vitality rewards system means people are having to pay for their smoothies at Kauai, so it would be a double whammy for the ‘burbs.
Anyway, for those wanting a more serious take on Woolies’ upcoming financials, read the rest of that Moneyweb article here.
