‎Business Day:
Retailer Woolworths yesterday laid out plans to simplify its structure and increase profit by ending the franchise agreements it has with 76 stores.
Buying out the franchises that make up a fifth of the company’s 339 outlets in SA will let the company roll out one IT system as it expands its financial services offering. It will also let the company profit directly from stores in fast-growing areas, rather than taking franchise and supplier fees.
Woolworths’ customers, the wealthiest 1-million in the country, are shrugging off the recession faster than poorer South Africans. In addition, stores in some new areas — opened by franchisees at little cost to the company — are growing strongly. The Ladybrand Woolworths, for example, shows annual turnover growth reportedly as high as 50%, faster than the group figure of 10,4% last year.
