Woolworths Braces for Tough Second Half Amid Inflation and Higher Interest Rates

South Africa's retail giant Woolworths Holdings is bracing for a tough second half of its financial year due to rising inflation, higher interest rates, and fuel prices. The company reported a modest increase in annual profit, but warned that consumer spending came under pressure during the second half.

The group's Country Road Group (CRG) business in Australia and New Zealand faced a difficult trading environment, particularly in apparel. CRG reported full-year sales growth of 1%, but sales declined by 0.5% in the second half.

Woolworths South Africa, on the other hand, continued to benefit from its food business and premium positioning. The company's acquisition of prepared-foods manufacturer in2food is expected to strengthen its position in premium convenience foods.