Woolworths has announced that it will invest R1-billion in its prices over the next two to three years. This commitment is to make its products ‘more accessible to more customers’. The money will be split between the retailer’s food and fashion businesses.
R750-million will be invested into food pricing, while the remaining R250-million will go towards fashion, according to Money Web.
“Over the last few years, we have been on a journey to invest in the prices of key product lines and categories to ensure we continue to provide our customers with the value they have come to expect from us,” explained Woolworths’ South African chief executive, Zyda Rylands.
“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.”
The most popular Woolworths food products will be prioritised and have their prices adjusted. This includes the entire fresh chicken range – all whole and portion chicken packs besides ‘Easy to Cook’, crumbed, and marinated chicken.
Rylands added: “While this investment will initially be most visible in our poultry products, we have also applied for more promotions on everyday basics across groceries, household and personal care to be more affordable to more customers.”
Rylands said that Woolworths has focused on identifying efficiencies in its business and value chain, in order to find opportunities to be more cost-effective and reduce costs.
“We have worked very closely with our suppliers and partners to ensure that we realise these sustainable and mutually beneficial operational improvements. We are pleased to be able to pass most of the savings of these efficiencies onto our customers,” said Rylands.
According to Business Insider, this means that Woolworths will effectively shrink its profit margins on some products and implement lower price increases than it had previously planned. The savings due to cost-cutting and efficiencies in the business will be funnelled into price cuts.