Woolworths coining it with on-demand deliveries

Woolworths has released a trading update for the 26 weeks ended 29 December 2024, revealing strong online sales growth through its on-demand delivery service Woolies Dash.

Woolies Dash delivered sales growth of 49.2% during the period, contributing to 37.2% increased online sales, and roughly 6.4% of total food sales.

Woolworths reported a 9% increase in sales in its food business. At the same time, its fashion, beauty, and home business recorded online sales growth of 25.2% during the half-year period.

Its on-demand delivery service, Woolies Dash, has performed well in recent years. The company’s annual results for the year ended 30 June 2024 revealed strong sales growth for the service.

Overall, online sales grew by 52.8% and contributed 5.5% of total South African sales. Woolworths attributed this growth to the increased penetration of its Woolies Dash delivery service, which recorded sales growth of 70% during the period.

This was despite the retailer facing several hindrances to trading throughout the year.

“Our Food business delivered strong and above-market growth, reinforcing its strength and resilience, and the trust that customers place in our Woolies brand,” it said.

In August 2024, Woolworths launched a dark store in Cape Town CBD to support Woolies Dash and streamline its online delivery processes.

Dark stores aren’t open to the public and focus on fulfilling online orders. The first Woolies dark store in Cape Town CBD services the city bowl and surrounding areas.

Woolworths online and mobile director Liz Hillock said the dark store move would help improve customer experience when using Woolies Dash.

Shortly after the launch, Woolworths said the dark store had markedly improved product availability for online orders in the area.

Another benefit of using dark stores is that they eliminate the need to fulfil on-demand orders through local Woolworths stores. Therefore, online orders no longer compete with in-store shoppers.

“The dark store eliminates this competition, and customers enjoy quicker delivery, thanks to a dedicated environment designed to be online-first,” said Woolworths.

The retailer recently told MyBroadband that the Cape Town CBD dark store has been a big success. It added that it plans to launch more dark stores and hopes to announce its next location soon.

“The introduction of our first dark store in the Cape Town CBD, servicing the city bowl and surrounding areas, has been a big success,” a spokesperson said.

“The dark store drives improved productivity and efficiency, as the space and format is geared to online picking and our online team can scale to increased demand more easily.”

They added that using dark stores enables Woolworths to offer its full product range to a larger group of customers.