Retail giant Woolworths Holdings, which made nearly R90bn in sales in the 2026 financial year, says it is putting its premium food business at the centre of its next phase of growth as its strongest competitive advantage. This comes as the group — led by its former food division champion Sam Ngumeni, who took the helm from Roy Bargattini earlier this year — faces weaker consumer demand, rising operating costs and a difficult trading environment across its South African and Australian businesses. The group said on Wednesday that its strategic focus was being “reoriented” around its premium food ecosystem, which it identified as its “primary engine of value creation”. For the year to June 28, Woolworths’ food division posted turnover and concession growth of 5.7%, ahead of the broader group’s 4.3% growth. However, the division was faced with challenging trading conditions in the second half of the year, with sales growth slowing to 4.4% driven by slow growth in the produce and grocery categories.Online sales contributed positively to the food division’s growth. Revenue through Woolworths’ on-demand service increased nearly 20%, while online contributed 7.3% of South African food sales. The group said food’s growth was supported by its product offering and focus on the in-store customer experience. According to Woolworths, the strategy will also give the beauty and home division a role in extending the retailer’s relationship with food customers. “Selected adjacent growth categories, such as Beauty and Home, play a particularly important role in extending the Food relationship into a broader lifestyle proposition as we seek to optimise the future FBH mix,” Woolworths said.The focus on food comes as the performance of fashion, beauty and home was more mixed. The division’s turnover and concession sales increased 4.4%, but its adjusted earnings before interest and tax fell 14.1% to R1.38bn.Woolworths said additional promotional activity, price investment in kidswear, and the clearance of excess stock put pressure on the division’s gross profit margin.Home grew 11.7%, while beauty increased 7.9%. Fashion was weaker, particularly in the second half.Woolworths is also changing its approach to capital allocation as it works through the difficult trading environment. The group said it was bringing “greater prioritisation, strategic discipline and capability” to investment decisions.Ngumeni has spent three decades with the group and previously led Woolworths Food. The group has reiterated that the new structure is designed to support its strategic focus.“Our immediate focus for CRG is to continue its pathway to recovery,” Woolworths said, referring to Country Road Group, which it says has returned to full-year profitability.CRG’s sales increased 1%, while adjusted earnings before interest and and tax rose to A$2.3mTrading conditions in the next financial year are expected to remain challenging, with consumer confidence and spending likely to remain constrained across South Africa and Australia, the group said.Business Day