The Chinese retailers are likely to have played a part in Woolworths’ profit crashing in its last financial year.
Woolworths has become the latest victim of intensified competition with international online stores, which have seen tremendous uptake in South Africa since 2023.
“On a comparable 52-week period, turnover and concession sales declined by 0.4%, and by 1.3% on a comparable store basis,” Woolworths said. Superbalist was the only division in the Takealot group that remained unprofitable, and Takealot became concerned that competition from Shein, Temu, and Wish would negatively impact its operations.
The South African Revenue Service heeded retailers’ and producers’ concerns and initially promised to charge the full 45% for clothes and VAT on all clothing imports from 1 July 2024. Woolworths said the business was able to maintain its improved gross profit margin at 48.5%, despite inflationary supply chain costs and the margin dilutive impact of a growing contribution from beauty.
Country Road’s sales declined by 8.0% measured a comparable 52-week period, and by 13.1% in comparable stores.
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