FRANCHISING is growing in importance for Woolworths Holdings, contributing
about R1bn in turnover for the year to June, about 10% of the total.
A similar trend is visible at Pick 'n Pay and Shoprite.
However, in the case of Woolworths the franchise stores are largely
restricted to selling textiles; the group is in no hurry to increase the
number of franchised food outlets.
This is because quality fresh products are critical to the reputation of the
group. One rotten egg could spoil the whole clutch.
Taking a cautious approach, Woolworths has been running extended pilot
projects at two food stores on Engen forecourts. Woolworths CEO Simon Susman
sees an opportunity for more Woolworths food franchises at Engen sites, and
also an opportunity to offer a limited range of long-life food products
within clothing franchise stores.
Food would not work in its Middle East franchises, where it has 10 stores,
because there would be a need to have manufacturing facilities nearby.
There is, as yet, insufficient critical mass there to justify such an
investment. Susman says the group has no intention of offering perishable
foods more than a truck ride away from a local distribution centre.
Yet there is no lack of demand for Woolworths food, as its 20% increase in
sales showed. Hence the intention to open another 20 food stores in the
coming year.
Publisher: Business Day
Source: Business Day
Careful Woolworths steps onto garage forecourts.
Posted On Friday, 22 August 2003 02:00 Published by eProperty News
FRANCHISING is growing in importance for Woolworths Holdings, contributing about R1bn in turnover for the year to June, about 10% of the total.
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