What’s Eating Into South Africans’ Wallets? Woolworths Report Points to an Online Habit

• Woolworths named online gambling as one of its top three business risks in its latest annual report
• The retail giant estimated that online betting creates an 80-basis-point drag on total retail sales growth in South Africa
• South Africans reportedly wager R1.5 trillion annually, with 60% of all bets now placed online

South African retail giant Woolworths has raised the alarm over the rapid rise of online gambling, identifying it as a growing competitor for the money South Africans would otherwise spend on groceries, clothing, and household goods.

In its latest annual report, the group's board listed online betting alongside two other major risks: the expansion of low-cost international e-commerce platforms and escalating geopolitical conflicts in the Middle East. What makes online gambling particularly concerning for the retailer is that, unlike the other threats, Woolworths has no direct way to counter it. It cannot adjust pricing or localise its supply chain to win back money that has gone to betting platforms.

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The scale of the problem

According to reports, the numbers behind the trend are striking. Data from the National Gambling Board and financial institutions, South Africans wager an estimated R1.5 trillion per year. That figure represents roughly 20% of the country's entire GDP. Of all bets placed, 60% now happen online, a shift that has accelerated the strain on retail spending.

Woolworths estimated that this gambling trend creates an 80-basis-point drag on total retail sales growth, meaning that money flowing into online betting is directly shrinking the pool available for everyday shopping.

Budgets shifting away from retail

Transactional data from Discovery Bank and Visa adds another layer to the picture. The data suggests that nearly half of South Africans who bet on sports online do so within a strict monthly budget, treating it as a fixed expense, much like a subscription or a stokvel contribution. This makes the competition for consumer spending even more direct, as gambling is no longer an impulse habit for many but a planned line item sitting alongside the grocery budget.

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Standard Bank's chief economist, Goolam Ballim, has pointed out that gambling does not generate economic value in the way that retail spending does. It redistributes income rather than multiplying it through the economy, which is why the drag on retail momentum is so pronounced.

National Treasury has been in discussions about introducing a 20% national tax on online gambling, with the stated goal of discouraging the behaviour rather than simply collecting revenue. The gambling industry has pushed back, citing existing provincial levies, but Treasury's position signals that government is aware of the wider economic consequences.

For Woolworths, the message is clear: the fight for the South African consumer's wallet has a new and difficult rival.

More on Woolworths

• Briefly News recently reported on an American expat in Cape Town who was stunned by a feather in her Woolworths egg carton, and Mzansi had plenty to say.
• The retailer is also rolling out Next Gen stores with a R2.4 billion investment to give shoppers more to look forward to.
• Woolworths Food also added nine new products to its shelves, from grab-and-go breakfast pots to on-trend desserts.

Source: Briefly News