the good business journey report 2010

GOOD BUSINESS JOURNEY

This paper is made wiTh 90% sugar cane waste sourced from previously disadvantaged local suppliers, and 10% wood fibre from sustainable forests. iT supporTs our Good business journey Goals of protecting the environment and empowering our people.

THEGOODBUSINESSJOURNEYREPORT2010

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CHAIRMANSSTATEMENTIn2007weconsolidatedandacceleratedourprevioussustainabilityeffortsunderourgoodbusinessjourneyprogrammewhichbroughttogetherourphilosophythatthetruesustainabilityofacompanyisreliantonitsowncontinuousperformanceandasustainablesocietyandenvironment.Wefurtherbelievethatalltheelementsofeconomicgrowth,transformation,socialdevelopment,theenvironmentandclimatechange,caneitherformaviciousorvirtuouscircle.TheGoodbusinessjourneyaimstoensurewedriveavirtuouscirclethatwillbenefitallofourstakeholders.

Thebusinesscase

WeconsidertheGoodbusinessjourneyasakeytoenhancingourbrandwhilebeingcognizantoftheimpactsofourbusinessonsocietyandtheenvironment.Wehaverealisedoverthepastfewyearsthatourfocusonsocialandenvironmentalissuescandriveinnovationandoperationalefficienciesinourbusiness.

Ourcustomerresearchshowsgrowingawarenessoftheprogramme,andhighlevelsofsupportforitsobjectives.Inparticular,customersincreasinglywanttounderstandwhereproductscomefrom,andbecertainthatthesearesourcedethicallyandwithoutharmtotheenvironment.Werecognisethatourcustomersplayanimportantroleinhelpingusmakeadifferencetoourcommunitiesandenvironmentandwearecommittedtoprovidingthemwithasmuchinformationandassistanceaspossible.

Internally,sustainabilityisoneofoursevenvalues,andwemeasureemployeeunderstandingandbackingforourgoodbusinessjourneyprogrammethroughourannualpeoplesurvey,whichhasshownhighlevelsofsupport.Somethingwecannotmeasurehowever,istheinnovationandenthusiasmofemployeesacrosstheorganizationinintegratingsustainabilitythinkingintotheirdailyjobs,andbringingnewprojectstolifethathavechangedthewayweoperateasanorganisation.

WearecontinuingtoworktobuildouremployeesknowledgearoundsustainabilitytoenablethemtohelpcolleaguesandcustomersunderstandtheirimpactsanddrivetheGoodbusinessjourneymessagesintheworkplaceandathome.Anexampleofthishasbeenanenergysavingcampaignacrossthebusiness,whichhashelpedemployeesreduceenergyusageinstoresandintheirhomes.

Experiencehasshownthatmostsustainabilitychallengescannotbesolvedbyonecompanyactingalone,andweareexcitedaboutthesupportwehavereceivedfromoursuppliersinimplementingprogrammeslikefarmingforthefuture,andthemanythingswehavelearntfromtheirefforts.WevealsoseenbusinessrelationshipswithcompanieslikeABSAandEngendevelopintoexpansionsofoursocialandenvironmentalinitiativeswiththeexpandedEduplantprogrammeandrecyclingatEngenservicestationstwoclearexamples.

Progressandchallenges

Wearepleasedwiththerecognitionthatwehavereceivedfromanumberofourstakeholdergroupsandwewillworkhardtosustaintheseefforts.Inparticular,beingchosenasafinalistforthethirdconsecutiveyearforinternationalresponsibleretaileroftheyearandbeingrankedsecondintheCarbonDisclosureProjectLeadershipindexinSouthAfricareinforcesourconsistencyandsustainabilityprogress.

Someofourhighlightsfortheyearincludethelaunchofourfarmingforthefutureprogrammethatisimprovingsoilandwaterresourcesacrossourproduceagriculturalbase;asuccessfulpilotofcustomerrecyclingfacilitiesatEngenservicestations;asignificantimprovementinourBEEscoreandshiftfromlevel6tolevel5;andtheexpansionofourEduplantprogrammeinconjunctionwithABSAandEngen.

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Wehavecontinuedtoreducewateruse,aswellasdevelopinganumberofprogrammestomeasureandreducewaterusageandimprovewastewatermanagementinoursupplychain.WealsocontinuetooffsetallourdirectwaterusagethroughWWFswaterneutralprogramme.

Energyusagehasdecreasedby18%fromour2004benchmark,andwehavesuccessfullyrolledoutnewlightingandenergymeasurementtechnologies,aswellasretrofittingrefrigerationtechnologiesandreviewingdistributionmethodstomeetour30%relativereductiontargetfor2012.

Wehavereducedourfoodspackagingby660tonstodate,aswellasincreasingtheamountofpackagingthatisrecyclable,andoursalesofreusablebags.Ourwastetolandfillratiocontinuestoapproachthetargetofzerowehavesetfor2012.

DuringtheyearwecontributedR314mtoarangeofcharityorganisationsaspartofourcommitmenttocommunityupliftment.OurcommunityfocushasbeenonaddressingtwoofourcountryskeychallengesfoodsecurityandeducationviaourEduplantandMySchoolprogrammesandthedistributionofsurplusfood.

Wehaveexperienceddifficultywithachievingsomeofourtargets,forinstance,salesoforganicproducts,ourpreferentialprocurementtargetsandprogressonpackagingreductions,whichweneedtobalancewithkeepingfoodwasteduetodamagelow.ThecontinuingdifficultiesinthetextileindustryinSouthAfricaareanotherareaofconcerntous.Weareconfidentthatwearemakinggoodprogressbutalsonotetheareasrequiringattention,particularlysomeofourenvironmentalandtransformationtargets.

Goodbusinessjourneymeasurementandgovernance

Atacorporatelevel,wearesatisfiedwiththeprogressthebusinesshasmadeouroverallscorefor2010againstouroneyeartargetsis84%(midyear:76%),thefirsttimethatwehaveachievedover80%.Thescoreof71%againstourfiveyearobjectives(midyear:63%)ispleasing,althoughweknowthatweneedtoaccelerateourprogresstomeetthe2012targets.Ourcomprehensivemeasurementandtrackingsystemiswellembeddedinthebusinessandprogressmeasurementsaredonetwiceperannum.Thesescoresreflectourprogressasanorganisationtowardsthestatedtargets,atbothacorporateandkeyindicatorlevel(i.e.transformation,economic,governance,socialandenvironmental).Wealsotrackprogressbybusinessunitsagainsteachoftheindicators,andhaveincludedgoodbusinessjourneyperformancemeasuresinthescorecardsofourteams.

Anassuranceframeworkisinplaceandaninternalauditcoverageplanhasbeencompletedforthegoodbusinessjourneyinareaswhereexternalverificationisnotavailable.ExternalverificationofourcarbonfootprintandBEEstatuswasalsocompletedasasteptowardsabroaderassuranceprocess.

Thegoodbusinessjourneyprocessisalsointegratedstronglyintothecompanysriskmodel,andagoodbusinessjourneyriskprofileisreviewedannuallybytheSustainabilityCommittee,whichplaysanimportantoversightroleinensuringstructuresandpoliciesareinplacetoalloweffectivedeliveryofourgoodbusinessjourneytargetsbymanagement.

Lookingforward

Althoughwerecognisethebroadnatureofourgoodbusinessjourneyprogramme(over200targetsset)isastrength,wewillhoneinonafewfocusareas:

Reductioninenergyusage,withinthebroaderclimatechangecontext;improvingthebroaderimpactofoursupplychainactivitiesonwaterresources;recyclabilityofpackagingandtheprovisionofrecyclingfacilities;workingwithoursupplierstopromotesustainablefarmingmethods,thatencouragebiodiversity;andbuildingourworkforceandsupplychaintorepresentthetransformationimperativesinourcountry.

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WehavelearntmuchaboutissuesthataffecttheenvironmentandsocietysinceweannouncedourgoodbusinessjourneyprogrammeinApril2007,andcontinuetolearnmoreeveryday,asmoreandmoreinformationontheissuesbecomeavailable.

Wealwaysthoughtofour2012targetsasthefirststepinamuchlongerjourney,andhavebeenworkinghardtorefineourfocusareas,andaddnewtargetstoourprogramme.

HIGHLIGHTSANDRECOGNITIONKEYSUSTAINABILITYINDICATORS

Indicator 2010 2009 2008 Progress

Revenue R23.7bn R21.9bn R21.8bn

Returnonequity(ROE) 39.4% 26.3% 27.6%

AdjustedHeadlineEarningspershare(EPS) 157.2 126.0 115

Sharepriceappreciation 1225 275 (1120)

Foodmarketshare 8.3% 8.5% 9.2%

Clothing,footwearandaccessoriesmarketshare 15.3% 14.4% 15.3%

Goodbusinessjourneyindexoverallscore 84% 79% 77%

CustomertrackingstudyregardingGoodbusinessjourneyelements

26% 24.9% 21%

Numberofpermanentemployees 18977 17551 18568

Trainingandskillsdevelopmentscore(outof15) 10.3 7.7 10.5

Employmentequityscore(outof15) 10.6 9.8 9.8

Preferentialprocurementscore(outof20) 10.4 5.7 2.4

Corporatesocialinvestmentcontribution(Rm) R314m R292m R267m

Energy(reductioninrelativeconsumptionfrombenchmark)

18% 12% 10%

Carbonfootprint(totaltonsofCO2) 452311 408627 356133

Water(reductioninrelativeconsumptionfrom 26% 11.5% 5%

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benchmark) (stores)

Healthandsafetynumberofinjuriesonduty 693 551 511

Foodspackagingreduction(towards20%reductionby2012)

6.6% 3.3% Benchmarkyear

InclusioninJSESRIindex x x x

BUSINESSRECOGNITION

Woolworthswasrankedsecondoutofthetop100companiesinSouthAfricaontheClimateChangeDisclosureLeadershipIndexbytheCarbonDisclosureProject,aglobalinitiativetoencouragecompaniestodisclosetheirgreenhousegasemissions.(Firstinthelowimpactcategoryin2008).

WinneroftheretailcategoryintheSouthAfricanCarbonLeadershipAwards2010. FinalistintheAgriculturecategoryforthe2010MailandGuardianGreeningtheFutureawardsforour

FarmingfortheFutureprogramme. WoolworthswaschosenasafinalistintheESGcategoryatthe6thannualAfricanAccessNationalBusiness

Awards2010. Woolworthswaschosenasafinalistinthe2010SANEAEnergyawardsintheCategory:EnergyProjectAward

2010. In2008WoolworthswasnamedInternationalResponsibleRetaileroftheYearattheWorldRetailCongress.In

2009and2010wewereshortlistedagainasoneofthefinalistsforthisprestigiousaward. WoolworthswasagainincludedintheJSESociallyresponsibleinvestment(SRI)indexfor2009/10andwas

namedasoneoftheindexbestperformers. WoolworthsClothingfirstasthemostfashionableclothingretailerTheSundayTimesTopBrandssurvey, WoolworthsFoodwastheoverallwinnerandWoolworthsClothingclaimedfourthplaceinthe2009AskAfrika

OrangeIndexserviceexcellenceawards.ThissurveyiswidelyregardedasthelargestserviceexcellencebenchmarkinSouthAfrica.

WoolworthsTastemagazinewonGoldforcustommagazineoftheyearintheAdmagawards WHLAnnualreportfortheyearendedJune2009hasonceagainbeenratedasExcellentintheE&YExcellence

inCorporateReportingawards

STAKEHOLDERENGAGEMENTStakeholderengagementisintegraltothewaywedobusiness,andunderstandingtheinterestsandexpectationsofourstakeholdersplaysacrucialroleindeepeningandextendingourrelationships.

WoolworthsstrivestobeSouthAfricasleadingretailbrand,offeringmerchandisethatisremarkablyaffordablewithauniquecombinationofquality,value,innovationandstyle.Woolworthscustomersareattheheartoftheretailstrategythatdrivesallmerchandisingandsellingdecisions.

Understandingcustomerneedsiscriticaltoprovidingtherightproductattherighttimeinthespecificstorewherecustomersexpecttofindwhattheyarelookingfor.Woolworthshasover3.8millioncustomers,andtheinsightsfromourcustomersenrichoursegmentationmodelanddrivenewopportunities.Duringtheyear

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customershavegivenusinsightintotheirperceptionofourvalueofferingandpromotions,assistingoursegmentationstrategy.

Woolworthsiscommittedtomeetingcustomersneedsateverylevelandwemonitorcustomersatisfactionthroughoutthebusinessusingvariousmechanisms.

Improvedcustomerunderstandinghasledtobetterprofilingandcataloguingofstores,withanincreasinglysegmentedoffer.Workisalsobeingdonetodriveasubbrandreviewtomakeeachbrandsimpler,clearerandbettersegmented.

Wewillbeintroducingatieredloyaltyprogramme,whichwillbedesignedto:

Buildmoreprofitablelongtermrelationshipswithmoreofourcustomers Rewardandretainourloyalcustomers.Employeeunderstandingandbackingforourgoodbusinessjourneyprogrammeismeasuredthroughourannualpeoplesurvey,whichhasshownhighlevelsofsupport.Somethingwecannotmeasurehowever,istheinnovationandenthusiasmofemployeesacrossthebusinessinintegratingsustainabilitythinkingintotheirdailyjobs,andbringingnewprojectstolifethathavechangedthewayweoperate.

WecontinuetobuildouremployeesknowledgearoundsustainabilitytoenablethemtohelpcolleaguesandcustomersunderstandtheirimpactsanddrivetheGoodbusinessjourneymessagesintheworkplaceandathome.

Maintainingandgrowingourcredibilityamongshareholdersandthebroaderinvestmentcommunityisakeyobjective.Thisisdonebyprovidingrelevant,timeousandtransparentcommunicationusingavarietyofdifferentmediatoallowfarreachingaccesstoinformation,ensuringallourshareholdersenjoyathoroughunderstandingofourperformanceandstrategygoingforward.Wehavemadeparticulareffortoverthelastfinancialyeartoengagewith,andupdateinvestorswhoarefocusedonEnvironment,socialandgovernanceissues,onourprogress.

RaisingtheprofileofthekeysustainabilityissuesinSouthAfricaisanintegralpartofWoolworthscommitmenttotheGoodbusinessjourney.Woolworthsongoingengagementwiththemediahasbeenanimportantaspectofmanagingthecompanyscorporatereputationaswellasraisingawarenessofkeysustainabilityissues.

Experiencehasshownthatmostsustainabilitychallengescannotbesolvedbyonecompanyactingalone,andweareexcitedaboutthesupportwehavereceivedfromoursuppliersandspecialistnonprofitorganisationsinimplementingprogrammeslikefarmingforthefuture,andthemanythingswehavelearntfromtheirefforts.Thesesustainabilityinitiativeshavebeenanaturalextensionofthelongstandingpartnershipswesharewithoursuppliers,andhaveallowedustoformulateunique,andoftenfarmspecific,responsestobiodiversity,transformationandotherobjectives.

Woolworthsoperatesatightlyintegratednetworkofsuppliers,toensureexactingqualitystandardsandformslonglastingrelationshipswithitssuppliers.ConformancetotheWoolworthssuppliercodeofbusinessprinciplesisaprerequisitetoensuresocialandenvironmentalresponsibilityacrossthesupplychain.

Woolworthsalsopartnerswithabroadrangeofnonprofitorganisationsacrossarangeofenvironmental,socialandtransformationissues.ThisincludestheWorldwideFundforNature(WWF),ConservationInternational,Food&TreesforAfricaandHeartbeat,amongstothers.

Thefollowingspreadillustratesourstakeholderengagementprogrammeinmoredetail:

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stakeholderengagementwhatweredoing

Ourstakeholders WhyweengageIssuesonwhichweengageinclude:

Howweengage Ourresponse

Customers Inorderto:

understandourcustomerneeds;

enhancetheWoolworthsbrand;and

growrevenue.

consumerpreferences;

consumercomplaintsandissues;and

theGoodbusinessjourney.

Electronicandpersonalengagementwith

customersincluding:

instoreticketing,labellingandpackaging

focusgroupsanddiscussions;

deskresearch;

customersurveys,mysteryshoppingsurveys;

socialmedia

marketingcommunication,advertisinganddirectcustomermail;and

Woolworthscallcentres.

ongoingproductdevelopmentandinnovation;

businessfocusonkeyissues,forexampleavailability,productchoice,storelocationandservice;and

adoptingmethodsofcommunicationtomeetcustomerpreferences.

Employeesandserviceproviders:

individuals;

collective;

independentcontractors;and

serviceproviders.

Inorderto:

sharerelevantinformationandgetinputandfeedback;

attractandretaintalent;

developahighperformanceorganisation;

improvecompetenceandskills;

optimisedeliveryandservice;and

enhancepeoplessenseofvalueandcommitment.

Woolworthsvisionandvalues;

businessstrategy;

businessissues,developmentsandnew

productsandcampaignsthataffectemployees;

employeedevelopmentprogrammes;and

employeeconcernsandissues.

ongoingdirectandindirectengagementelectronic,verbalandwritten;

research/peoplesurvey;

communicationandinvolvementforums;and

regular,formalcommunication,includingtelevisionbroadcasts,publicationsandteammeetings.

Ongoingreviewof:

employeehealthandsafetyprogrammes,forexample,HIV/Aidsprogrammes;

employeedevelopment,remunerationandbenefits;

communicationanditseffectiveness;and

relevantbusinessissues,forexampleshrinkage

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Shareholders:

individual;and

institutional.

Tocreate:

aninformedperceptionofWoolworths;

moreaccurateexpectations;

apositiveinvestmentenvironment;

valueinthebusiness;and

approvalforcorporateactions.

businessperformance;

businessexpectationsandstrategy;and

economic,socialandenvironmentalconcerns.

annualgeneralmeeting/generalmeetings;

biannualanalystsresultsreview;

individual,documentedanalystsmeetings;and

reporting,includingtheannualreport,sustainabilityreport,webcamandwebsiteupdates.

revisedreportingformatsasdeemednecessary.

Suppliers:

local;and

international.

Todeliver:

productwhichfurtherstheambitionsoftheGoodbusinessjourney;

newandinnovativeproduct;

consistentqualityandstandards;and

conformancetoWoolworthssupplier

businessprinciples.

issuesthatposearisktotheWoolworths

businessand/orbrand;

productdevelopment;

environmentalandsocialresponsibility

standards;and

theGoodbusinessjourney.

ongoingelectronicandpersonal

engagement,includingsupplier

conferencesandsuppliervisits;and

bestpracticeresearchandinternationalbenchmarking.

reviewofproductoffering;and

regularenvironmentalandsocialresponsibilityaudits.

Franchisees:

local;and

international.

Inorderto:

ensureaconsistentcustomerexperience;

growrevenue;and

buildandextendthereachoftheWoolworthsbrand.

businessissues;

initiatives;and

opportunities.

ongoingelectronicandpersonalengagement,includingmeetings,anannualfranchiseconferenceandregularfranchisebuyingweeks.

franchiseesatisfactionsurveys.

reviewingourprocessesformanagingthebusiness.

Governmentdepartmentsof:

Tradeandindustry(dti);

Inorderto:

discussissuesofmutualconcern;

tradeandindustrypolicyonsector

development,tradeissues


engagement;

consolidationofcombinedretailpositionsasinputtogovernment;

sharingofinformationon

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Labour;

Agriculture;

Wateraffairsandforestry(DWAF);

Environmentalaffairsandtourism(Deat);

Health;and

Education.

optimiseopportunitiesandminimise

risksofregulation:and

anticipateandassesspotentialpolicyand

regulatoryimpact.

andgrowth;

labourmarketissuesregardingflexibility,skills,

minimumstandards,labourrelations;

foodstandardsandagriculturalissues;

consumercreditandprotectionissues;

education;and

transformationandtheGoodbusinessjourney.

draftingofsubmissions;

consolidationofinformation;

participationinresearch;

meetingswithgovernmentofficialsandministers;and

Nedlac.

businesspracticewithgovernment;and

revisionofprocessestobecomecompliant.

Organisedbusiness:

BUSA;

RetailersAssociation;

ConsumerCreditAssociation;and

NationalBusinessInitiative(NBI).

Inorderto:

gainsupportandleverageonissuesof

commoninterest;and

getinsightintootherbusinessandsector

approaches.

tradeandindustrypolicy;

crime;

labourmarketregulations;

textilesandclothingprocurementpolicies;

consumercreditandprotectionregulations;

and

sustainability.


engagement;

meetings;

negotiations;and

draftingandinputtodocumentation.

refinementandshiftingofpositionstoaccommodatebroaderinterests;

participationinBusinessAgainstCrimeinitiative;

coordinationofretailinputtotextileandclothingissues;and

participationinspecificinitiatives,forexampletheNBIsEnergyAccord.

Unionsandcollectiveemployeestructures

including:

internalcommunicationsforums;and

SACCAWUandCOSATU.

Toengageoncollectiveemploymentissues.

wagesandtermsandconditionsofemployment(UPNonly);

verificationofunionmembership;

retailissues;and

textilesandclothingissues.


engagement;

meetings;and

participationinCCMA,Nedlacandotherlabourmarketinstitutions.

abetterunderstandingandresponsetoemployeeconcerns;and

revisionofremunerationandbenefitspolicies.

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Media:

business;

consumer;and

trade.

Inorderto:

influencestakeholderperceptions;

buildtheWoolworthsbrands;and

marketthebusinessandproducts.

businessissues;

consumerissues;

macroeconomicissuesthataffectretail;and

productinformation.

ongoingelectronicandpersonalengagement;

interviews;

newsreleases;and

publications,includingprintedmaterialandelectronicformatonwebsites.

ongoingreviewandchallengingofbusinesspractices;

improvedtransparency;and

improvedinformationprovision.

NGOsandcommunityorganisationsincluding:

Food&TreesforAfrica;

Heartbeat;

AssociationofDieticians(ADSA);

SouthAfricanAssociationforFoodScience

andTechnology(SAAFoST);

Consumerpressuregroups;

ConsumerGoodsCouncilofSA(CGCSA);and

Environmentalorganisationsincluding:WWF,Conservation

InternationalandtheLandmarkFoundation.

Tocontributetothesocietyinwhichwetrade,

theGoodbusinessjourney;

educationandcapacitybuildingonrelevant

communityissues,forexamplenutrition;

HIV/Aidsawareness;and

inputtoourproductstrategyandrange.

ongoingelectronicandpersonalengagement;and

jointprojects.

ongoingmodificationstoproductstrategyandrange;

modificationofHIV/Aidsstrategy;and

greatertransparencyandcommunication,forexamplelabelling.

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GOVERNANCEANDECONOMIC

COMMITMENTSANDPROGRESS

Ourgovernancefocusincludesthemeasurement,governance,riskprofileandassuranceprocessaroundtheGoodbusinessjourney,andourapproachtosustainabilityreporting.

OureconomicfocusincludesourcontributiontotheSouthAfricaneconomy,localsourcing,responsiblelendingandourstoreexpansionprogramme.

WoolworthsisaproudSouthAfricanbusinesswithalongtraditionofqualityandinnovationinSouthAfrica.

Commitment 2010 2009 By2012

Netgrowthincorporatestores

9 22 31

Netgrowthinfranchisestores

(41) 3 n/a

Ethicsprogramme CodeapprovedbytheBoard.

ParticipatedinCorporateEthicsindicatormanagedbytheEthicsInstituteofSA

Draftcodeprepared.Ethicsbenchmarkestablishedinemployeesurvey

Fullimplementationandawarenessprogrammerolledout

GOVERNANCECOMMITMENT

Thegroupiscommittedtothehighestlevelofcorporategovernanceandtheimplementationofeffectivestructures,policiesandpracticesthatimprovecorporategovernanceandcreatesustainablevalueforourshareholdersandotherstakeholders.

Throughtheblendofdisciplineswithinthecorporategovernancedepartmenttheboardandmanagementaresupportedinembeddingbestgovernanceprinciplesandpracticesthroughoutthegroup.

TheboardisoftheopinionthatthegroupcurrentlycomplieswithallsignificantrequirementsincorporatedintheCodeofCorporatePracticesandConductassetoutintheKingIIReportandtheJSEListingsRequirements,andisworkingtowardsmeetingtherecommendationsofKingIII.

Thesustainabilitycommittee,aformalsubcommitteeoftheWoolworthsHoldingsboard,integratestheworkofthetransformationcommitteeandtheoutputsoftheWoolworthsTrust,providingasinglepointofviewanddirectionforallWoolworthssustainabilityfocusareas.ThecommitteeischairedbyanindependentnonexecutivedirectorandmeetsquarterlytooverseeprogressinachievingallaspectsoftheGoodbusinessjourneyprogramme.TheChiefexecutiveofficerandManagingDirector:Foodsaremembersofthecommittee,togetherwithtwoindependentdirectors,oneofwhomchairsthetransformationboardcommittee.Thecommitteehasconsideredthecontentsofthisreport.

Progresstowardsmeeting2012targetsandtherelatedoneyeargoals,ismonitoredatanoperationallevelthroughthesustainabilityandtransformationintegrationcommittee,chairedbytheChiefexecutiveofficer.Belowthis,anintegratedGoodbusinessjourneygovernancesystemisinplaceincorporatingstrategysetting,delivery,communicationandreviewofperformanceintermsoftheprogramme.

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AcompleteboardevaluationisconductedoftheWoolworthsHoldingsboardanditssubcommitteeseverytwoyears.Areportisalsopreparedonanannualbasisforeachcommitteetoconfirmthatithascompliedwithitstermsofreference.

TheGoodbusinessjourneyindexhasbeenreviewedduringthecurrentyeartoensuretheongoingapplicabilityofthesophisticatedweightedsystemwhichprioritisesall200plusindicatorsandprovidesascoreacrosseachpillaroftheGoodbusinessjourney,aswellasforeachbusinessunitinachievingtheirspecifictargets.Theindexscoreisacrucialtoolindrivingchangesinbehaviourinthebusinessunitsaswellasprovidingcomparablescorecarddataandmonitoringprogresstooneandfiveyeartargets.

PROGRESSMEASUREMENT2010

Thetotalsustainabilitymeasurementscorefor2010is84%(2009:79%).Thisshowsthatgoodprogresshasbeenmade,butthatthereareanumberofinstancesinwhichtargetsfor2010havenotbeenmet.Wehadset80%asabenchmarkforgoodperformanceandareexcitedtoscoreabovethatbenchmarkforthefirsttimesincewebeganmeasuringourprogress.

The2012scoreof67%(2009:61%)isbynecessitylowerthanthe2009score,becausemorestringenttargetsapplyformanyofthemeasures,butshowsgoodprogressthreeyearsintothefiveyearprogramme.

Thebiggestchallengesliewithinthetransformationandenvironmentfactors.

Thescoresperfactorareshownbelow.

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INTEGRATEDSUSTAINABILITYREPORTING

Woolworthsregardsitssustainabilityreportingprocessasavaluableopportunitytoengagewithitsstakeholdergroupsandtorespondtoissuesthathavebeenraised.

ThefocusforoursustainabilityreportingistoprovidereaderswithanoverviewofthecontextforhighlightsandchallengesoftheGoodbusinessjourneyprogress,aswellasourfutureobjectives.Thissustainabilityreportisthesuccessortothe2009reportandfocuseslargelyonSouthAfricanownedoperations,aswellasincludinginformationonourAustraliansubsidiary,CountryRoad,anditscorporateresponsibilityprogramme.Therehavebeennosignificantchangesinaccountingstandardsregardingsustainabilityreporting.

TherecommendationsofKingIIIandtheG3guidelinesoftheGlobalReportingInitiative(GRI)formthebasisforthisreportcycle,andananalysisofthegroupscompliancewiththeseguidelinesappearsintheGRIIndex.

ASSURANCE

WoolworthsinternalauditteamhasauditedselectedGoodbusinessjourneyindicatorsduring2010andwillcontinuethisprocesstwiceperannum.Theindicatorsformingpartoftheprogrammehavebeenclassifiedintothreecategories:

thosethatarealreadyexternallyverified; thosethatcouldbeexternallyverified/audited;and thosethatrequireinternalauditing.

ForthefinalcategorytheWoolworthsinternalauditteamhasafouryearplaninplacetocoverallindicators,focusingontheprocessesfollowedtomeasuredataandtrackchanges.

TheinternalauditframeworkhasaddedarobustoversightmechanismtotheGoodbusinessjourneymeasurementprocessandispartofaprocesstopreparethebusinessforexternalassuranceinthenextfinancialyear.

OurBEEstatushasbeenassuredbyBEEVerificationAgencyCCforthe2010financialyear.Throughtheexternalassurancereceivedfromtheagency,wehavebeenassessedasalevel5contributor.

WehavealsoundertakenalimitedexternalverificationofourcarbonfootprintdatainconjunctionwiththeGlobalCarbonExchange,andtheirassurancestatementcanbefoundundercarbonfootprint.

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KEYSUSTAINABILITYRISKS

Thekeyrisksassociatedwiththeachievementofthe2012Goodbusinessjourneytargetsandrelatedmitigatingactionswerereviewedduringthecurrentyear,andareidentifiedasfollows:

ExposureHIGH

Reasonbasedonkey

metrics

Actionstoaddressperformance

TheGBJ2012andbeyondstrategy:notbeingabletomaintainsustainabilityleadership

Keyshiftsinthesustainabilityfocusofanumberofinternationalretailers.

Woolworthsispartofthewaythroughastrategydevelopmentprocess.

Wecontinuallybenchmarklocalandinternationalretailers.

Inabilitytoachieveenergytargetsandassociatedcosts

%relativereductionfrom2004benchmarkvs.2010targetof20%

energytariffincreases

Therolloutoftechnologies(meteringonlineandautomatedlighting)hasbeenaccelerated.

Introducednewpilottechnologiesaroundrefrigerationandairconditioning.

Recentlylaunchedanenergyawarenesscampaigninstores.

InabilitytomeetFoodspackagingreductionof20%by2012andensuringfoodspackagingrecyclability

Areductionof600tonsofpackagingvs.2010targetof1000tons

Recyclingprogramavailableat8sites.

Focusingoninclusionofrecycledcontent,ensuringrecyclabilityofthecontainers,makingsurerecyclingsymbolsareoncontainers,andtheeducationofcustomersaboutrecycling,

Furtherrolloutofrecyclingfacilitiesinsecondhalfof2010.

Retainingthe

majorityofclothingsourcingintheregionreputationalrisk

Localsourcing%targetnow50%sourcingfromtheregionin2012

Workingwithkeylocalsupplierstoensureasustainablelocalvaluechaininkeylines.

IncreasingsourcingfromLesotho,SwazilandandMauritius.

Waterscarcityandqualityissues

WaterscarcitykeyissueforSouthAfricaasover90%catchmentsalreadyoverallocated.Climatechangeimpactscancreatefurtherpressuresataregionallevel

Waterneutralitycommitmentandreductionsachievedtodate.

Installingwatermetersinallstores. Workingwithsupplierstoensuretheyare

waterefficientandmanagingwastewaterproperly.

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ExposureMEDIUM

Reasonbasedonkeymetrics


InabilitytoachieveOrganicandfreerangefoodsalesandorganicclothingsales

2012targetsalesorganiccotton

2012targetsalesorganicandfreerangefood

2012farmingforthefuturetarget

2009/10targetforsustainablefibres

LaunchedtheSAorganiccottonpipeline. Investigatingthereplacementofconventional

cottonwithbetterorfairtradebasedcotton. Increasingtheinclusionofothersustainablefibres

suchasbambooinproductmix. Promotingfarmingforthefutureproduceand

earthfriendlycleaningrangeasnewproductinnovationcommitmentsthatarefundamentallychangingourproductoffering.

Dataintegrity:

Anumberofthe

GBJmeasureshadnotpreviouslybeenmeasuredbythebusiness.

TheonlineGBJmeasurementsystemhasbeenimproved.

ThefinalisationoftheMeteringonlinetechnologyhasimproveddataaroundenergyandwater.

AthreeyearauditplanforGBJisinplace,withaviewtopreparingthebusinessforexternalassurance.

ExposureLOW

Reasonbasedonkeymetrics


Internal financial

constraints:

AfocusoncostreductionhasresultedinsomeGBJinitiativesnotbeingpursuedbythebusiness.

Costsavingprojectsaresubmittedtotheinvestmentcommitteetosecurefunding.

Broaderbusinesscasedevelopmentforotherprojectsisbeingpursuedwiththebusinessunits.

ExclusionstotheGoodbusinessjourneyprogramme:Brandedproducts

ToensureconsistencyandcredibilityoftheGoodbusinessjourneyprogramme,allaspectsofWoolworthsbusinessshouldbeinvolved.

Investigatinghowtoincorporatebrandedproductswithintheambitofthesuppliercodeanditsauditprocess,toensurealevelofconsistency.

Opportunitiestopartnerwithbrandsonsustainabilityissuestobeinvestigated.

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Competitioncommissioninquiry

Woolworthsiscommittedtofaircompetitionprinciples.

TheretailindustryinSouthAfricaandaroundtheworldisfiercelycompetitive.Weareatpainstoensurethatourpracticesdrivethebestpricesforourqualitystandards.

WoolworthswillcontinuetocooperatewiththeCommissionandawaitstheoutcomeofitsinvestigation.

VALUESANDETHICS

During2009sustainabilitybuildforabetterfuturewaslaunchedastheseventhWoolworthsvalue,entrenchingitsimportanceintheculturalfabricoftheorganisation,andjoiningqualityandstyle,value,service,innovation,integrityandenergyasthecompassfordecisionmakingatWoolworths.

TherevisedWoolworthscodeofethicswasalsoapprovedduring2010.

WoolworthsparticipatedinacorporateethicsresearchprogrammerunbytheEthicsInstitute.Furtherinternalawarenessandresearchwasdoneviaastaffcultureandvaluessurveythatsetabenchmarkforethicsawareness,againstwhichimprovementtargetshavebeenset.

Asacompanywehaveazerotolerancepolicytowardsfraud,theft,corruptionoranysimilarillegalbehaviour.

Fraudandshrinkage

Wewilltakedisciplinaryactionagainstanyemployeewhoisinvolvedin,orassistswithcommittingfraud,theftandcorruption.Intermsofthecompanysdisciplinarycode,involvementintheseactsisadismissibleoffence.WecontinuetopromotetheTipoffsAnonymouslinerunbyDeloitteandtherewardsforinformationwhichleadstosuccessfulpreventionsoffraudandshrinkage.

CONTRIBUTIONTOTHESOUTHAFRICANECONOMY

WoolworthscontinuestocreatewealthacrossabroadspectrumoftheSouthAfricaneconomy,atthemostfundamentallevelbygeneratingdirectemploymentandcareeropportunitiesforover20000peopleandindirectly,manymorethroughourmanufacturingandprocessingnetworkaswellasassistingtobringsmallscalesuppliersintothevaluechain.

Woolworthshasdoneacountryoforiginassessmentinordertoconfirmthat95%ofthefoodthatitsellsisSouthAfricaninoriginasignificantcontributiontotheSouthAfricaneconomy,especiallytheagriculturalsector.

Woolworthsreiteratedthecompanyscommitmenttobuyingasmuchproductlocallyaspossible.Thevastmajorityofgoodssoldinourstores,byvolume,aremanufacturedinSouthAfricaandwecontinuetoencouragelocalmanufacturingwhereverpossible.

Wewillonlyconsidersourcingabroadwherelocalorregionalsupplierpartnersareunabletoprovidetheidealquality,valueandinnovationthatourcustomersexpect.

Woolworthsisalsowellplacedtodriveenterprisedevelopmentprojectsandhassetupteamsdevotedtoworkingmorecloselywithemergingsuppliers,furthersupportingSouthAfricanbusinessesfirstasacrucialpartofourindirecteconomiccontribution.

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Woolworthsexpansionprogrammehasmovedtoafocusonstoreextensionsandmodernisations.WeareintroducingtheconceptofasuperwooliesinFoodthroughconvertingandexpandingexistingstores,whichwillofferacomprehensivecatalogueoffooditemsaswellashouseholdandhomebasics.

Thecurrentfootprintincludes:378stores

Woolworthscontinuestosupport160franchiseoperationsinSouthAfrica,selectedAfricancountriesandtheMiddleEast.

AdetailedreviewoftheWoolworthsgovernancestructureandprocessescanbefoundinthegovernancesectionofthe2010annualreport.

CaseStudyCreatingjobsanddrivingeconomicdevelopmentRecruitmentconsultantandentrepreneurCikizwaNqolobesayssheoweshersuccesstoWoolworthseffortstoempowerblackandblackwomenentrepreneurs.NqolobecutherteethinWoolworthsHRdepartment,andthenin2006tooktheplungetostartherownrecruitmentconsultancy.ShewasappointedasapreferredsuppliertoWoolworthsandidentifiedasoneofWoolworthsenterprisedevelopmentprogrammebeneficiaries.CikizwaofIndimaRecruitment,says,ItsbeenaquitearidefromGugulethutowhereIamtoday.Woolworthshasreallybeenamazing,firstasanemployerandthenasachampionofmyentrepreneurialjourney.Woolworthsisadedicatedclient,financialsponsorandbusinessadviserallrolledintoone.ImeetwiththemonaregularbasistodiscussIndimasprogressandplanstogrowandsustainmybusinessintothefuture.ZinziMgolodela,WoolworthsHeadofTransformationsays,Aswedowithothercarefullyidentifiedaspiringentrepreneurs,webeganbyhelpingNqolobedrawupacomprehensivebusinessplanthatclearlymappedherbusinessgrowth.Thenwefocusedonensuringshehadthebusiness,tools,skillsandsupportnecessarytotakeoffasastartupbusiness.Wecontinuetostandbyherasshegrowsherbusiness.Wereextremelyproudofhowhardshesworkedandhowwellshesdone.AnillustrationofhersuccessisthatoverthecourseofayearIndimagrewfrommanaging5toover20contractorsintheITsector(75%growth).


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VALUEADDEDSTATEMENT

2010 2009

Valueadded23,744

22,372

Less:Costofsales15,656

14,501

Costofservicesandotheroperatingexpenses

2,888 2,706

5,200 5,165

Distributionofwealth: % %toemployeesassalaries,wagesandotherbenefits

2,858 55.0% 2,689 52.1%

togovernmentasincometax(includingdeferredtax) 491 9.4% 546 10.6%tolendersasfinancecosts 151 2.9% 281 5.4%toshareholders 718 13.8% 1,399 27.1%depreciationandamortisation 442 8.5% 401 7.8%earningsretained 540 10.4% 151 2.9%

5,200 5,165

2010

55%

9%

3%

14%

9%

10%


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TRANSFORMATIONANDCSICOMMITMENTSANDPROGRESSCommitment 2010 2009 By2012

OverallBEElevel Level5(56.93) Level6(46.5) Level4(65+)

Equityownership 3.57 4.7 6.5

Managementcontrol 9.03 7.3 8

EmploymentEquity 10.59 9.8 11

Skillsdevelopment 10.25 7.7. 15

Preferentialprocurement 10.44 5.7 13

Enterprisedevelopment 8.05 6.3 11

Socioeconomicdevelopment 5 5 5

TotalCSIcontribution R314m R292m R300m

Surplusproductdistributed R283m R262m N/A

EducatorsbenefitingfromtheEduplantprogramme

8000 5000 N/A

ThetransformationpillaroftheGoodbusinessjourneyembracesthedtisbroadbasedblackeconomicempowerment(BBBEE)scorecardframework,including:equityownership,managementcontrol,employmentequity,skillsdevelopment,preferentialprocurement,enterprisedevelopmentandsocioeconomicdevelopment.BBBEEisoverlaidontheWoolworthsstrategytoensuremeaningfulandsustainableempowermentendeavours.ToenabletheimplementationofBBBEE,Woolworthstookanintegratedandmultiprongedapproachtoshiftingtheorganisationalculture,mainlydrivenbychangeleadershipinitiatives.

TheBoardtransformationcommitteeassiststheBoardinensuringthatthereareappropriatestrategies,policiesandprocessesinplaceinordertodrivetransformation.

BEEVerificationAgencyCCwasappointedasthecompanysverificationagencyforthe2010financialyear.Throughtheexternalassurancereceivedfromtheagency,wehaveachieveda56.93%score,alevel5achievement,improvingfrom46.5%inJune2009.

DetailsontheindividualsectionsoftheBEEscorecardfollowbelow.

BEEEMPLOYEESHAREOWNERSHIPSCHEME

TheBEEemployeeshareownershipschemewasestablishedinJuly2007toacceleratetransformationinitiativesbyspreadingequityownershipmorebroadlyacrossWoolworths,transferringa10%holdingtoWoolworthsemployees.Theschemealsoprovidesaretentionincentivetoemployees.

Aboardoftrustees,withamajorityofemployeerepresentatives,hasbeenestablished,chairedbyDollyMokgatle,andthetrusteesmettwiceduringtheyearwithfullattendanceatbothmeetings.ThetrusteesexercisedthevotingrightsofthepreferencesharesatallthegeneralmeetingsheldbyWoolworths.Duringthe

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yearthetrusteesalsoheldtheirfirstImbizoforbeneficiaries,whichwaswellattendedandwhichreceivedverypositivefeedback.

EmployeeturnoverintheretailsectorandamongstemployeesbenefitingfromtheBEEemployeeshareownershipschemehadadverselyaffectedtheWoolworthsownershipstatus,buthasdecreasedsignificantlyinthelastfinancialyear.AttheendofJune2010,therewere8706beneficiariesparticipatinginthescheme.

OurBEEemployeeshareownershipschemeearnedapercentageofthedividendspaidouttoordinaryshareholdersandduringtheyearthebeneficiariesoftheschemereceivedR16.3m,anincreaseof67%onthepreviousyear.TheschemehaspaidatotalofR37.8mindividendstodate.Thefullbenefitsoftheschemebecomeduein2015.

MANAGEMENTCONTROL

Woolworthscontinuestofocusonrepresentivityofblacknonexecutivedirectorsandseniorexecutivesthroughsuccessionplanningandtalentmanagementprocessesandthemanagementcontrolscorehasimprovedfrom7to9.03accordingly.

EMPLOYMENTEQUITY

DiversityofworkforceandcompliancewiththeEmploymentEquityActarecriticalforthetransformationofWoolworths.Thisisembeddedandalignedtothebusinessstrategy,successionplanning,talentmanagementprocessesandemployeeengagement.

DuringtheyearWoolworthswentthroughaDirectorGeneralreviewofemploymentequityprogresswiththedepartmentofLabour,whichhighlightedtheneedtofocusonAfricanrepresentationatseniormanagementlevelanddisabilityrepresentation.

TherehasbeenextensiveworkdonetoensureintegratedandsustainableEmploymentEquity(EE)Actcomplianceacrossthebusinessviadiversitycommitteesinallbusinessunits.

Thesecommitteesaremeeting,onaverage,onamonthlybasis.Themandateofthesecommitteeshasbeenwelldefinedthroughongoingtrainingofdiversitycommitteemembers;LetsTalk!isasuccessfulengagementmethodologyatalldiversitycommitteemeetingstoensurecompliancewiththeEEAct.SomeofthemajorbenefitsoftheLetsTalk!methodologyareeffectiveengagement,escalationofEEissues,drivingaccountabilityandensuringatwowayfeedbackprocess.ThecontinuousimprovementofIntegratedPerformanceManagement(IPM)hasnowseenBEEand/ortransformationincludedinindividualemployeesperformancegoals.Individualgoalscoupledwithaneffectivetrackingandmeasurementcapability,contributeinembeddingBEEasawayofworkingthatisintegraltobusinessstrategy.

SKILLSDEVELOPMENTTRAINING

Ourlearninganddevelopmentfocusisondevelopingandbuildingcompetencerelatingtobothleadership/managementandtechnicalorfunctionalskills.Learninganddevelopmentcontinuestobeakeyenablerforthedevelopmentofablacktalentpipelineforkeyrolesinthebusiness.


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WoolworthsdriveslearninganddevelopmentthroughtheWoolworthsAcademyframework,whichisstructuredinawaytoguideeachlearnertoundertakeapathofprogressivelearning,andincludes:

775employeesareonaccreditedlearnershipprogrammes(4%oftotalemployees),leadingtoanationalqualificationregisteredwiththeSouthAfricanQualificationsFramework.Thishasincreasedfrom366employeesin2009;

6AccreditedSkillsprogrammesarerunningthroughSupplyChainandFoods;and 5Traineeprogrammesacrossthebusiness.

Skillsdevelopmentperformancehasimprovedagainst2009,butisstillunderperformingagainsttheWoolworthstargetfortheyear.

Totalspendonblackemployeesincreasedsignificantlyfromthelastfinancialyear.

PREFERENTIALPROCUREMENTANDENTERPRISEDEVELOPMENT

Woolworthsiscommittedtosupportingexistingsupplierstoimprovetheirempowermentcredentialsandintroducingsmall,medium,blackownedandblackwomenownedsupplierstothebusiness.

Thepreferentialprocurementscorehasimproveddramatically(5.7to10.44thisfinancialyear)duetofocusedeffortsbythebusinessunitstogetholdofsuppliercredentials,wellstructuredcentralprocurementRFPprocesseswhichemphasiseBEEcredentials,andsupportforsuppliersintheirownverificationprocesses.

WoolworthsEnterpriseDevelopmentstrategicaimsaretoaddressthechallengesfacingsmallblackownedbusinessesbyassistingthesebusinessesinmovingfrombeingsurvivalisttobeingsustainable.Keytothisisprovidingtheseenterpriseswithbusinessopportunities.

Furthermore,inlinewiththeWoolworthsstrategyofbuildinglongtermrelationshipswithitssuppliersandpartners,wefocusourEDeffortsonemergingorganisationsinourgreatersupplychain.Woolworthsenterprisedevelopmentstrategyrestsonfourpillars,allofwhichwebelieveareessentialtohelpanemergingentrepreneurorsmallbusinesstogrowintoasustainableentity.

Thefourpillarsarefinancialassistance(includingshorterpaymentterms),guaranteedbusiness,apackageofsupportwhichincludesmentorship,targetedupskillingandtheassistanceofexternalexperts.InordertobeabletodeliverthemaximumbenefittoourEDbeneficiarieswewillpartnerwithorganisationsthatcanfurthercomplementourcontributions.CurrentlyWoolworthshaspartnershipswith:

OldMutualMasizaneFundandIlimaConsultants.ThisisadevelopmentinitiativesetupbyOldMutualaimedatsupportingnationaleconomictransformationthroughenterprisedevelopment,withafocusonwomenownedbusinesses;capacitybuilding&skillsdevelopmentandfinancialeducation.

saiblSouthAfricanInternationalBusinessLinkages.Thisisabusinesslinkageprogrambuildingthecompetitivenessofblackenterprisesthroughimprovementsinmanagement,productivityandquality,anduseofmoderntechnology,andlinkingthemtodomesticandinternationalmarketsinsustainablebusinessrelationships.

Variousindependentconsultants.

Inthecurrentyearwehaveassisted32(2009:25)blackownedcompaniessupplyingproductsandservicestovariousbusinessunits.

WeseeourEDstrategyasaninvestmentinthefutureofourbusinesssupplychain,thewidereconomyandthesocietyinwhichweoperate.


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CaseStudyClothingbankTheClothingBankwasestablishedbytwolikemindedandaccomplishedwomenin2009.TraceyGilmoreandTraceyChambersshareapassionformakingarealandmeaningfuldifferencetothelivesofimpoverishedwomenwithinSouthAfrica,anditwasthiscommitmentthatdrovethemtoestablishTheClothingBankcreatingaseamlesssupplychainbeentheretailindustryanddisadvantagedcommunities.TheannualclothingexcessintheSouthAfricanretailindustryisestimatedatavalueofR200R900million.Theseexcesses,whicharenormalintheretailindustry,couldbeusedefficientlytobenefitNPOs,disadvantagedcommunitiesandtheirpeople.OnceintroducedtoTheClothingBank,Woolworthsimmediatelyunderstoodthevaluethatitcouldbringbysupportingthesesocialentrepreneurs(currentlyover60womenareinvolvedintheprogramme).WoolworthsdonatedR5millioninclothingforthefirstyear(2010).WoolworthsiscommittedtohelpingTheClothingBank,andisdoingsothroughitsdedicatedEnterpriseDevelopmentdivision.HowtheClothingBankoperates TheclothingcollectedbytheClothingBankismanagedinthreeways: Soldtotheunemployedwomenintheirtradertrainingprogramme. GiventopartnerNPOs,welfareinstitutionsandgovernmentalserviceswhoidentifytheneedsofcommunities

atgrassrootslevel. Storedandutilisedtoensureimmediateresponsefordisasterrelief.

CaseStudyEnterprisedevelopment:StrandveldteaWoolworthscontinuestodemonstrateitscommitmenttosocioeconomictransformationandspecificallyBroadbasedBlackEconomicEmpowerment(BBBEE)inSouthAfricabysupportingsmall,local,communitybasedenterprises.OneofthelatestprojectstobenefitistheStrandveldTeaFarmersAssociation,whichisnowgrowingpremiumfinerooibosteaforWoolworths.ItsoneoftheprojectsthathasgrownoutofthepartnershipbetweenWoolworthsandtheShellFoundation,aU.K.basedcharitythattacklesglobaldevelopmentchallengesbyhelpingsmallbusinessesinpoorerregionsaroundtheworld.WithTheBetterTradingCompany,ShellFoundationsdevelopmentpartners,astudywascommissionedthatshowedrooibosproductionwouldhavelessimpactrelativetootherfarmingactivitiesintheElimarea,italsosuggestedwaysinwhichrooibosfarmingcouldrestorebiodiversityinareasalreadyimpactedbyalienvegetation.Theintroductionofrooibosfarmingisalsohavingapositiveeffectonthelocalcommunity,whichwasestablishedasaMoravianMissionStationin1824,isstillasmall,picturesquecountryvillagewhere,untilrecentlymosteconomicactivityrevolvedaroundsubsistencefarmingandthethatchingtrade.Theystartedsmall,plantingonly10hectaresin2006,expandingto20thefollowingyear,thendoublingthatagaintheyearafter.Injustfouryearstheirhardworkwithassistanceintermsofinvestmentandtechnicalexpertisehaspaidoff,astheprojectproducesexportqualityrooiboswhilecreatingjobopportunitiesandgeneratingrevenueforthepeopleofElim.Itsalsobenefitingtheenvironment,asthefarmersremovedensealienbushwhenplantingrooibos.Therooibosinhibitsregrowthofthealiens,butnottheindigenousfynbos.Inordertopreservethefynbos,planting,weedingandharvestingoftherooiboscropisdonebyhand.Inadditiontocultivatingrooibos,localfarmershavealsofoundemploymenthelpinganearbyfarmerharvestfynbosforexport.


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CSITheWoolworthsCSIstrategyisalignedbothtoourcorebusinessstrategyandtothestatednationaldevelopmentprioritiesoftheSouthAfricangovernment.

Akeyfocusofallthetrustsactivitiesistobuildcapacityinourcommunitiestoencourageandsupportourbeneficiariesinbecomingselfreliant.Inparticularwearecommittedtocontributingtoeducationbyaddressingfoodsecurityandnutritionandtheneedsoforphansandvulnerablechildren.TheWoolworthsTrustismanagedbyaboardoftrusteeswhooverseeourcoreactivitiesinlinewithourCSIpolicy.

SURPLUSFOODANDCLOTHINGDONATIONS

WoolworthsiscommittedtousingitssurplusproductstocontributeineradicationofpovertyinSouthAfrica.Eachyear,WoolworthsgivesawaymillionsofrandsworthofitsclothesandsurplusfoodtounderprivilegedSouthAfricans.ThesurplusfoodispastitsSellBydatebutbeforeitsBestBeforeandUseBydates.MostsurplusfoodandsomesurplusclothingaredistributedbyWoolworthstolocalcharities.

R279mworthofgoodsweredonatedbyWoolworthstoneedycharitiesin2010(2009:R262m).Note:Thesefiguresrepresentthecosttocompany,nottheretailpriceoftheitems.

FOODSECURITYINSCHOOLS

ThroughourmajorsponsorshipoftheEduPlantprogrammewe,togetherwithAbsaandEngen,assistSouthAfricanschoolsindevelopingpermaculturefoodgardens.In2010,8000educatorsbenefitedfromparticipatingintheEduPlantprogramme,coordinatedbyFood&TreesforAfrica.ThisistheTrustsflagshipfoodsecurityandeducationalinitiativeandprovidessustainablefoodsecuritythroughfoodgardenstoschoolcommunities.TheprojectcurrentlyreceivesinexcessofR1.5mayearfromtheWoolworthsTrust.

ThroughtheEduPlantprogramme,schoolsdevelopfoodgardensusingpermaculturetechniques.Inharmonywithnature,EduPlantschoolsgrowvegetables,fruit,herbsandmedicinalplants.Theseschoolsprovidefoodforhungryschoolchildrenandthecommunitiesaroundthem.

ThroughtheirparticipationintheEduPlantprogramme,thousandsofschoolsacrossthecountryhavebecomechampionsofcommunitydevelopment;promotingfoodsecurity,improvednutritionandselfreliance.

Inthesecondhalfof2010Woolworths,togetherwithABSA,willbefundingapilotprojectinSiyakhanafoodgardeninBezuidenhoutparkinJohannesburg.TheSiyakhanaFoodgardenisaprojectoftheUniversityofWitwatersrandandithastheobjectiveofimprovingavailabilityandaccessibilityofnutritiousfoodandprovidingeducationtothesurroundingcommunitiesonproducingtheirownfood.

RecordnumberofEducatorsreachedthroughEduPlantworkshopsandrecordnumberofEduPlantentriesin2010

The2010EduPlantworkshopshavebeenagreatsuccess.ThisyeartheprogrammewelcomesEngen,AbsaandtheWoolworthsTrustasthefundingpartners.Theyaregrowinganddevelopingthisnationalschoolgreeningandfoodgardeningprogramme,foundedandcoordinatedbyFTFA,thatisnowinits16thyear.

Arecordnumberofover8000delegatesattendedthe72educatorworkshopsrunacrossSouthAfricaandarecordnumberofover580schoolshavesubmittedentryformsforthecompetitionthisyear.

00100579Sticky NoteNothing measurable or comparable.Is more of a story.


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IMPROVINGEDUCATION

ThroughMySchoolandMakingtheDifferencethroughDesignandMakingtheDifferencethroughNutrition,WoolworthscontributestotheimprovementofeducationinSouthAfricanschools.

WehavecontributedmorethanR100mtodatetoMySchoolonbehalfofourcustomers.In20092010alonewecontributedR27mtotheMySchoolprogrammethroughover500000activeMySchoolsupporters.Thecontributionshavesupportedmorethan10000schools,manyinimpoverishedareasaroundthecountry.

TheprojectalsoincludesMyVillageandMyPlanet,whichsupportselectedcharitiesandenvironmentalorganisations.

Atotalof1900schoolsarebenefitingfromWoolworthsMakingtheDifferencethroughNutritionorDesignschoolinitiatives.In20092010WoolworthsextendedtheMakingtheDifferenceprogrammetoincludeclasslessonsfocusingonnutrition,exerciseand"FarmingfortheFuture".

ORPHANEDANDVULNERABLECHILDREN

TheWoolworthsTrustiscommittedtoplayingaroleinthenationalefforttosupportorphanedandvulnerablechildreninSouthAfrica.Webelieveinstrengtheningfamilies,communitiesandschoolcommunitiessothattheyarebetterabletocareforthem.

TheWoolworthsTrustpartnerswithHeartbeattopromoteandenablecommunitycarefororphanedandvulnerablechildren.3000orphanedandvulnerablechildrenareabletostayintheirowncommunitiesasaresultofHeartbeat.

During2010wecontinuedoursupporttotheEmthonjeniareainMpumalangaandenteredthesecondyearofaprojectintheJoziniareaofKwaZuluNatal.Theprojectwillprovide12nongovernmentalorganisations(NGOs)withtheopportunitytoparticipateinatrainingandmentoringprogrammewithHeartbeatovera24monthperiod.TheobjectiveistoenabletheseNGOstoprovidethenecessarysupporttotheorphanedandvulnerablechildreninthisparticularlyneedyarea.ItwillextendthereachofHeartbeattoafurther2000childreninthisarea.

STAFFGIVING

Woolworthsstoresareencouragedtosupportsocialdevelopmentprojects,schoolsandcharitiesintheirlocalcommunities.TheWoolworthsTrustmatchesthefundsraisedbystoreswithcontributionsofuptoR4000perstoreperyear.Inaddition,storeshavetheirowncommunitygivingprogrammesdistributingsurplusfoodandclothestolocalcharities.ThroughWorkingWonders,anemployeerecognitionprogrammeforcommunitywork,Woolworthsalsoencouragesandsupportsemployeeswhoareinvolvedinmeetingsocialchallengesintheircommunities.


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CaseStudyWorkingwonderswinners:

JamaKatanganaisbeingrecognisedbecauseofhisdedicationandcommitmenttotheorganisationNants'Ingqayi(NAD).TheorganisationhelpstoenrichthelivesofthecommunityofLanga.NADhelpsenrichthiscommunitybysupportingallkindsofartsactivitiesfromtheatretocommunityjazzjams.Theyprovideskillsaswellashelpingyoungandoldexpressthemselvesartisticallyand,throughthat,toleadbetterlives.Jamaspendsagreatdealofhisfreetimeworkingwiththemandmakessurethatitreachesasmanypeopleaspossible.HehasrecentlybeenveryinvolvedinenablingagroupofchildrenfromNADtoprovideentertainmentalongthefanwalkaspartoftheWorldCupactivities.InadditiontothewonderfulworkthatJamaisdoinginhiscommunityheisalsoawonderfulassettohisdepartmentandasstatedbyhislinemanager'HeisarealWoolworthsambassador,whogetsinvolvedwherehishelpisneededwithoutanyexpectationofremunerationorreward.'

ArleneNewmanisbeingrecognisedbecauseofherdedicationandcommitmenttomakingadifferenceinthelivesofmanyanimalsandinparticularforhersupportandinvolvementwiththeorganisationAdoptAPet.Shecollectspetfood,towels,blanketsandmonetarydonationsfromherITcolleaguesforAdoptAPet,aswellasbooksforTheEmmaAnimalRescueSociety(TEARS).Shebelievesstronglythatanimalscannothelpthemselvesandtheyhavesomuchlovetogiveandalltheyaskforinreturnislove,awarmbed,foodandwater.HerworkspaceisusuallysurroundedbylargebagsoffoodandbooksthatshehastocallAdoptAPettocomeandcollectfromher.ArleneisnotonlymakingadifferencetoAdoptAPetsheisalsoawonderfulassettoherdepartmentandagreatWoolworthsambassador.

CaseStudyHabitatforHumanityBuild

InNovember2009Woolworthshelditsfirstannualcharitytriathlon.Manystaffmembers,theirfamiliesandoursuppliersran,swamandcycledtoraisemoneyforHabitatforHumanity.HabitatforHumanityInternationalisanonprofit,housingorganizationthatoperatesasaworldwideministryseekingtoprovidesimple,decentandaffordablehousingtocommunities,inneed,throughouttheworld.

From1216April2010WoolworthsteamsbuilteighthousesforfamiliesinMfuleniTownship,CapeTownfromthefundsraisedbythetriathlon.ThesecondcharitytriathlonwilltakeplaceinNovember2010.


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SOCIAL


Commitment 2010 2009 By2012Numberofemployees 18977 17551 n/aConversionofparttimerstoflexible40hours 36% 16% n/aUnionmembership 26% 30% n/aLabourturnover(Management) 13% 12% 10%Numberofinjuriesonduty 693 551 n/aFullcompliancewithsuppliercode:Foods 95.5% 94% 95.5%Fullcompliancewithsuppliercode:Clothing 89% 84% 90%OursocialpillarincludesafocusonWoolworthspeopleinitiatives,socialconditionsinoursupplybase,productlabelingandhealthandsafety.

PEOPLE

Woolworthsisanaspirationalandmodernretailbrandwithastrongvaluebasedculturethatpermeatesemployeerelationsandassiststodrivehighperformance;thereforeweareabletodeliversustainableandprofitablegrowththroughourPeople.

Ourintegratedpeoplestrategy,whichisbuiltonthephilosophyofcreatinganinspiringworkplace,isthefoundationofthecompanystrategicplanandiscriticaltomotivatingandrewardingtherightemployeeactionsandbehaviourinordertoeffectivelyexecutebusinessplans.

TheobjectivesofthePeopleStrategyare:

Tobuildemployeeengagement; ToestablishnonnegotiablecommitmenttoEE; Todevelopcapability,successionandcareerpathways; Toestablishaperformancemotivatedculture; Toenhancevaluesbasedleadership;and Toattractoutstandingtalent. In2009/10wemadesignificantstridestowardsestablishingaleadingemploymentvaluepropositionthroughtheimplementationofanintegratedpeopleandrewardstrategy.Thekeyachievementsfor2009/10were:


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StoreStaffEmploymentProposition

Prospectiveandcurrentemployeesareattractedandretainedbythevaluebasedculturewhichformsthebedrockofthebusiness.Fromthefinancialyear2008/2009to2009/2010staffturnoverincorporatestoresdecreasedby8%asaresultoftheimprovementsmadeinstrengtheningthestaffemploymentvalueproposition,whichincluded:

Increasingstabilitythroughensuringmoreguaranteedhoursforourstorestaff.Thiswasachievedthroughtheconversationofflexible28hourcontractstoflexible40hourcontracts.Onthe30thofJune2010,37%ofstaffwereconvertedtoflexible40contracts.

Successfullytriallingavariablepayschemein4storesforallstorestaff.TheschemehasbeenimplementednationallyasatJuly2010.

MergingtheAlexanderForbesprovidentfundwiththeWoolworthsGroupRetirementfundallowingapproximately4000staffemployeesincorporatestorestoreceivethesamegroupriskbenefitsincludedintheWoolworthsGroupRetirementFund,

Increasingthefuneralbenefitatnoextracosttotheemployees.

ShortTermIncentives

Shorttermincentivesincludingthecorporateshorttermincentivescheme,theregionalmanagerandcorporatestoresgainshareschemeandthesupplychaingainshareschemeperformedasplannedrewardingparticipantsforsuccessfulperformance.

Employeeengagement

Woolworthsemployeerelationsstrategyremainsfocusedondevelopingandmaintainingsoundoneononerelationshipswithallstaff,whichwefirmlybelieveisinthebestinterestsofourpeople.IndustrynormsarereviewedonaregularbasistoensurethatWoolworthsremunerationremainscompetitiveandmarketrelated.

LetsTalkisanengagementtoolthatprovidesemployeeswiththeplatformtobeheardandtotrackdailyactionsrelativetotheoperatingandtradingplan.Asatyearend80%ofheadofficeandover50%ofstoreshaveimplementedthemethodologywhichhastranslatedintoimprovedperformance.

PeopleSurvey

TheemployeeopinionsurveyknownasLetsAskwasdeployedinstorestomeasureengagement,theeffectivenessofourpeoplestrategiesandleadership.Overalltherewas2.1%improvementinperformance.Notableshiftsincluded

3%improvementinCulture&Leadership 3%improvementinStakeholderEngagement: 8%improvementinReward&Recognition:

Recruitment

Overthepastyearasolidplatformhasbeenestablishedfromwhichwecanbuildourpositionasthepreferredemployerwithinretail.Afullreviewofrecruitmentandselectionpolicy,processandmetricshasbeencompletedandtherehasbeenafocusonbuildingrecruitmentandselectioncompetenceinHRandLineManagers.Thedevelopmentofalternativesourcingchannelshasalsocontributedtoasignificantdecreaseinrecruitmentcostsacrossthebusiness.

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HeadOfficeRestructure

Inordertopositionthebusinesstoeffectivelydeliverthestrategygoingforward,anorganisationwidestructurealignmentprocesswascompletedatheadoffice.Thekeyoutcomesofthisprocessweresimplerleanerstructures,withclearaccountabilityalignedtothedeliveryofthebusinessstrategy.Theintentwasalsotostructuretobuildsuccessionandincreasedcapability.Keyfocusareasthroughthestructurealignmentprocessweretheretentionofkeyskillsandcommitmenttoemploymentequity.

EmploymentEquity

Employmentequityhascontinuedtobeakeybusinessfocusin2009/10withaspecificfocusonestablishinganEEtalentpipelineinlinewithourstrategyofdevelopingandprogressingEEtalentthroughthebusiness.Thelaunchofourgraduateprogramme,GrowthAcademy,incollaborationwiththeW&RSSetaandtheUniversityofStellenboschBusinessSchoolinFebruary2010wasgroundbreakingwithintheretailsector,andisasignificantsteptowardsenablingthisstrategy.Inordertobuildaculturethatenablestransformation,anewDiversityworkshopwaspiloted,andwillberolledoutacrossthebusinessinthenewfinancialyear.

SkillsDevelopment

DevelopmentoftherequisiteskillstodeliverourstrategybothintheshortandlongertermremainedakeyfocusareaforthebusinessandthenumbersoflearnersparticipatinginformalisedLearnerships,SkillsprogrammesandTraineeprogrammeshasincreasedsteadily.ThelaunchoftheGrowthAcademyaswellasaCorporateStoresandRealEstateDevelopmentCertificateinBusinessPracticefundedbytheW&RSetaandruninpartnershipwiththeTripleLLearningAcademywerehighlightsfortheyear.RetailAcademy,whichfocusesonthedevelopmentofmiddletoseniormanagement,continuedtoruninpartnershipwithUCTGraduateSchoolofBusiness.Inaddition,therewasalsoacontinuedfocusongeneralupskillingandbuildingofretailmerchantskills.ThelearningcentresatAdderleyStreetinCapeTown,RosebankinJohannesburg,andWestvilleinKZNhaveallcomeonstreamtoacceleratethedevelopmentofretailskillsbyprovidingfocusedandaccreditedcoursesrequiredformodernretail.

SUPPLIERRELATIONS

Alloursuppliers,serviceprovidersandfranchisees,whatevertheirlocation,areboundbytheWoolworthsCodeofBusinessPrinciples.Alloursuppliersareregularlyassessedagainstit.

Thismeansthatthequalityoftheirworkmanshiphastobethehighest,theirworkforcehastobetreatedfairly,andthatanynegativeimpacttheiroperationsmighthaveontheenvironmentisminimised.

Clothings2010compliancetargetwas90%,but89%wasachieved,agoodimprovementfrom2009,butstillslightlybelowourobjective,largelyduetochallengesintheengagementofinternationalsuppliers.

Foodtargeteda95%compliancewiththesuppliercodeofBusinessPrinciplesfor2010andachieved95,5%complianceoveratwoyearauditcycle.

The2010winnersareFairCapeandBakkavor

Bakkavorisreceivinganawardfortheirwatersavinginitiatives,theirecofriendlywaterheatinginstallation,andtheuseoffilteredfactorywastewatertoirrigatenearbyfarmland.

FairCapeisreceivinganawardfortheircarbonfootprintingstudy,andfortheirplantorecoverfatsandoilsfromtheirwastewatertogeneratepower.


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CaseStudyWooliesrecognisessuppliersfortheircommitmenttoprotectingtheenvironmentTheStewardshipAwardswerecreatedtorecogniseWoolworthssupplierswhoaretakingtheleadinusingnaturalresourcesefficientlyandwhoarehelpingtobuildpeopleandcommunities.Toenter,thesupplierssubmitareportoutliningtheirenvironmentalandsocioeconomicperformanceandentriesarereviewedbyapanelofenvironmentalexperts.

PRODUCTSAFETYANDLABELING

Woolworthsiscommittedtomaintainingthehighestpossiblelevelsofproductsafetythroughoutthebusiness.Productdesignandmanufacturearealwaysassessedagainststringentsafetystandards.

Foodsafetyiscriticaltothebusinessandmechanismsareinplacetoensurethatconsumersareofferedproductwhichhasundergonethoroughtestingandrigidprocesscontroltoensureitisassafeaspossible.Processesincluderoutinechecks:

theWoolworthsappointedindependentSANAS(SouthAfricanNationalAccreditationSystem)accreditedfoodlaboratoryrunsroutinechecksforanypotentiallyharmfulmicroorganismsandpathogens.Italsoroutinelymonitorspesticideresiduelevelsonfreshproduceandheavymetallevelsinfreshfish;and

anindependentauditingorganisation,InternationalBritanniaLimited(IBL),conductsfourhygieneauditsayearineachofourstoreswherefoodiscookedtoensurethatgoodfoodhandlingroutinesareinplace.

Woolworthshasarobustproductrecallprocessinplace,wherebyproductsposingasafetyriskareremovedfromtheshelfwithintwohoursoftherespectiveexecutivebeingmadeawareoftherisk.

Woolworthslabellingpolicyensuresthatcustomersaregivensufficientaccurateinformationtoallowthemtomakeinformedbuyingdecisions.Woolworthsclothingisfullycompliantwithgovernmentrequirementsintermsoflabellingwhich,inadditiontolistingthecountryoforigin,requiredetailsoffibrecontentandcareinstructionsplustheimporterscodeforimportedlinesorthemanufacturerstaxpayernumberforlocalgoods.

AllWoolworthsfoodlabelscontaindetailedinformationoningredients,nutritionalvaluesandallergens.WoolworthshasanopinpolicyinKidswear,toensurewekeepchildrensafeandfreefrommetalcontaminants.

OCCUPATIONALHEALTHANDSAFETYANDSECURITY

AllWoolworthsbuildingsaredesignedwithinstringenthealthandsafetyguidelinesandwithemployeeandcustomerwellbeingasaprimaryconsideration.Jointworker/managementhealthandsafetycommitteesareinplace.PreventionisanimportantaspectofWoolworthshealthandsafetyproceduresandthecompanysupportsongoingcommunicationintheworkplace,particularlyaroundsafeworkingpracticesinhighriskareassuchasstoresandthedistributioncentres.

Woolworthscurrentlyemploys14occupationalhealthpractitionerstodeliveracomprehensiveoccupationalhealthandwellnessprogrammewhichincludesanemployeeassistanceprogramme(EAP).Thisprogrammeprovidesconfidentialcounselingforpersonalorbusinesscrisesaswellaslifestylecounselingtoemployeestohelpthemmanagehealthrelatedissues.

Ongoingvigilanceandadeterminationtoputthesafetyofourstaffandcustomersattheforefrontofourstoressecuritymanagementprocesshavebeencriticaltocontainingcrimeduringtheyeararmedrobberieshave,however,stayedthesameasthepreviousyearat18.Fortunatelynodeathsorseriousinjurieswererecorded.

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Injuriesonduty Numberofinjuries

July2009toJune2010 693






HIV/AIDS

HIV/AIDSisregardedasapotentialthreatwhichcanbemanagedandmonitoredwiththeappropriateleadership,strategicplanning,implementationofcosteffectiveandsustainablemeasures,tomanagetheimpactsontheorganisationanditsemployees.

ActivitiesandAccomplishments:

ReviewoftheWoolworthsHIV/Aidsstrategyinlinewiththeorganisation'sstrategy. WoolworthshasacomprehensiveEmployeeAssistanceProgramme(EAP)whichencouragesemployees/

peoplewhoareaffectedorinfectedbyHIVtocomeforwardforconfidentialcounselingandsupport. AllWoolworthsemployeeshaveaccesstofreetreatmentandcare.TheClinicalManagementProgram,(100%

Companyfunded)offerstreatmentandotherbenefitstotheHIVpositiveemployeeswhodonotqualifyformembershipoftheWooltruHealthcareFund.ThosebelongingtotheHealthcareFundcanaccesstreatmentviathefund.

WoolworthsiscurrentlylaunchingatestingcampaigninlinewiththeGovernment'sNationalHCT(HIVcounselingandTesting)campaign.ThisincludesaWellnesscomponent.ThesetestsincludeHIV,Diabetic,Cholesterol,BodyMassIndexandBloodPressureScreening).

HIV/AidsawarenesswithinstoresandHeadOfficecontinues,andsomeindividualstoreshavetheirownHIVawarenesscommitteesthatarrangeHIV/Aidsrelatedawarenessactivities.ThiswillbereinforcedbytheoneononeeducationthattakesplacewiththeHIVscreeningtest.

WoolworthsalsocontributestobettermanagementofissuessuchasHIV/AidsintheworkplaceinpartnershipwithorganisationssuchastheSouthAfricanBusinessCoalitiononHIV/Aids.

WoolworthsalsosupportsnationalcampaignssuchasWorldAidsDayandthe16DaysofActivismCampaignfornoViolenceAgainstWomenandChildren,breastcancerandsubstanceabuseawareness.

Thechallengesahead

EncouragingallemployeestoknowtheirHIVstatusbytakingpartintheHCTCampaign; EncouragingemployeestoconfidentiallyreportcasestotheClinicalManagementProgramme,Wooltru

HealthcareFundHIVProgrammeorWoolworthsHealthServicestoensureaccesstosupportandinformation; Planningforsustainable,costeffectiveinterventionsintotheorganisationtakingthefollowingkeyfactorsinto

account: PuteffectivemeasuresinplacetoreducethefinancialimpactoftheHIV/Aidsepidemiconthe

organisation Introducecosteffective,sustainableinterventionsthatsupporttheorganisationalstrategy.

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ENVIRONMENT


Ourkeyinitiativesundertheenvironmentalpillarofourprogrammeincludeorganicandfreerangeproducts,healthyeatingchoices,protectionofbiodiversity,animalwelfare,watermanagement,wastemanagementandthereductionofpackaging.Wecontinuetopromoteenvironmentallysoundfarmingmethods,therebyensuringthatourconventionalproducefarmersmigratetoenvironmentallysensitivefarmingmethodsandorganicproduction.

Commitment 2010 2009 By2012

Relativewaterreductionstores 27.3% 12% 30%relativereduction

Waterreductionheadofficecomplex

24% 20%(restated) 30%reduction

Organicfoodsales

(excludingfarmingforthefuture)

R631m R500m R1billion

Organicandsustainablefibreclothingsales

R608m R400m R1billion

Farmingforthefuturecompliancelevels

68.4% Benchmarkyear 85%

WoolworthswinesuppliersmembershipofBiodiversityandWineInitiative(BWI)

70% 55% 100%

Foodspackagingreduction 660tons 320tons 2000(20%reduction)

Recyclabilityoffoodspackaging 66% 50% 90%

Recycledcontentinfoodspackaging

24% 23% 25%

Recyclingsymbolsonfoodspackaging

83% 79% 90%

Reusablebagssales(no.ofbags) 920000 900000 1000000

Reductioninplasticbagsalespertransaction(benchmark1.33)

.995 1.17 1

Woolworthsrecyclingfacilities 8 0(ExceptforCFLrecyclinginstore)

50

%wastetolandfillfromdistributionoperations

16% 33% 0

SUSTAINABLEAGRICULTUREANDMANAGEMENTOFBIODIVERSITY

SouthAfricahasthethirdhighestlevelofbiodiversityintheworld,butagricultureanditsimpacts,areofthemostsignificantthreatstonaturalresourcesandbiodiversityinSouthAfrica.

Overthepastdecadeithasbecomeclearthatwhilethecurrentapproachtofarmingproducescheapfoodinabundanceitalsocarrieshiddencostsforthehealthoftheplanetanditspeople.Yearsofecosystemdegradation

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inSouthAfricasagriculturallandscapeshasresultedindepletedsoils,barrenlandsandpoisonedwaterways,risinginputcostsandgreenhousegasemissions,andincreasingruralpoverty.

Thissituationisdrivingamovetowardstheconceptofsustainabilityinfarmingpractices,agriculturewhichcanprotectsoilsandwatersupply,nourishpeople,supportrurallivelihoodsandhelpcommunitiescopewithachangingclimate.Thisconceptcentresontheneedtobuildfarmproductivityandprofitabilityinawaythatprotectsthenaturalresourcesonthefarmandsocialwellbeingensuringthattheagriculturalsectorcanmeetworldfooddemands,enhancerurallivelihoodsandunderpinstableeconomicsystems.

Woolworthsanditssuppliersarededicatedtosellingproductsthatdonotcauseharmtothenaturalworldinthewaytheyaremade,andwearefocusedonworkingwithoursupplierstoimprovefarmingpractices.

WWFasaStrategicPartnerinAgriculture

WWFisaleaderinunderstandingandmitigatingtheimpactsofkeydriversofbiodiversitylossincludingagriculture.InSouthAfrica,theyhaveinvestedinsustainablefarmmanagementtechniquesandtoolsforlargeandsmallgrowersinarangeofcommoditiesandcurrentlymanageseveralproductspecificsustainabilityinitiatives,includingtheBiodiversity&WineInitiative,theSustainableSugarFarmManagementSystemandtheestablishmentofGreenChoice,inpartnershipwithConservationInternational,aimedatpromotingwiseresourceusethroughoutthefoodsupplychain.

Weareestablishingacollaborativeprojectwhichassistsinenhancingtheenvironmentalbenefits,andacceleratingtheadoptionlevels,oftheFFFBetterManagementPracticesacrosstheWoolworthssupplybase.ThehighimpactdairysectorhasbeenidentifiedasagoodstartingpointforputtingthiscollaborationbetweenWWFandWoolworthsintopractice.

WWFwillplayanimportantroleinverifyingtheprogressandresultsachievedundertheFFFprogramme,aswellasprovidingspecialistknowledgeandexperienceacrossarangeofbiodiversityandwaterareas.WoolworthswillpartiallyfundWWFssustainableagriculturework,aspartofthecollaborationbetweentheentities.

Woolworthsbroaderresponseincludes:

takinggeneticallymodified(GM)ingredientsoutofourfoodwhereverpossible.AnyGMingredientsremainingareclearlylabeledwhichmeanscustomerscanmakeinformedchoiceswhileshopping;and

sellingonlybadgerfriendlyhoney. onlysourcingwoodwhichisrecycledorindependentlycertifiedascomingfromapprovedsustainablesources,

e.g.ForestStewardshipCouncil(FSC); sellingnoproductorbyproductofthreatenedspecies; workingonasustainablesolutionforpotatofarmersintheSandveld; requiringWoolworthswinefarmersintheCapeFloralKingdomtobemembersoftheIntegratedProductionof

Wine(IPW)programmeandtheBiodiversityandWineInitiative(BWI),overtime; shiftingconventionalfarmerstoadoptenvironmentallysensitivefarmingpracticesreducingtheirimpacton

theenvironment,throughthefarmingforthefutureprogramme(seebelow);and supportingpredatorfriendlyfarming.Weareagainstindiscriminateformsofpredatormanagementthatcause

pain,distressordeathtopredators.Weareworkingcloselywithoursupplybase,universities,theDepartmentofAgriculturesresearchfarmsandanumberofotherexpertsinthisfield,includingtheLandmarkFoundation,toimplementguidelineswhichsetoutethicalpredatorcontrolmeasures.ThefoodsteamisalsoactivelyinvolvedinanAnatoliansheepdogadoptionprogrammesponsoredbytheWoolworthsTrust.

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Fishingforthefuture

WoolworthsFishingfortheFutureinitiativeisaguaranteetocustomersthatourseafoodis:responsiblysourced,legallycaughtandhasfulltraceability.

WearepartneringwiththeSouthAfricanSustainableSeafoodInitiative(SASSI)andusetheirred/amber/greencolourcodingsystemtoindicatethreatenedspecies.

Woolworthshasalsorecentlyintroducedanewgourmetfishselectionsustainablywildcaught,MSC(MarineStewardshipCouncil)certifiedAlaskansalmonfillets,mackerelsmoked&pepperedfilletsandherringfillets,andsustainablyfarmedtroutsmokedfillets.TheMSCcertificationcomplementsthelocalSASSIprogramme,andextendsourcoverageforimportedandfarmedfishspecies.

PalmOil

WoolworthsisthefirstSouthAfricancompanytobecomeamemberoftheRoundtableonSustainablePalmOil(RSPO).TheRSPO,aglobalorganisation,hasdevelopedasetofstandardscalledthePrinciples&Criteria(P&C)thatdefinethepracticesforsustainablepalmoilproduction.Thesestandardsaddressthelegal,economic,environmentalandsocialrequirementsofproducingsustainablepalmoil.

Currently,themajorityofpalmoilisproducedinMalaysiaandIndonesia,andaccordingtotheRSPO,thesecountriesaccountfor83percentofproduction.OilpalmisgrownmostoftenonnewlyclearedrainforestorpeatswampforestsratherthanonalreadydegradedorabandonedagriculturallandsomethingtheRSPOiscloselymonitoringandworkingtoend.Inbothcountries,thenumberofcriticallyendangeredandthreatenedlandmammalshasincreasedsignificantly.

TheRSPOunitesstakeholdersfromsevensectorsofthepalmoilindustrypalmoilproducers,palmoilprocessorsortraders,consumergoodsmanufacturers,retailers,banksandinvestors,environmentalornatureconservationNGOsandsocialordevelopmentalNGOstodevelopandimplementglobalstandardsforsustainablepalmoil.

Woolworths,whichusessome600tonsofpalmoileachyearinitsproducts,hasjoinedtheRSPOinordertopromoteandraiseawarenessoftheneedforsustainablepalmoilproduction.ThiscommitmentincludespurchasingcertifiedsustainablepalmoilcertificatesforthetonsofpalmoilusedinWoolworthsfoodsandbeautyproducts.BybuyingtheseGreenPalmcertificatesWoolworthsiscontributingtoRSPOeffortstoincentiviseIndonesianandMalaysianpalmoilproducerstobecomecertifiedsustainableproducers.Woolworthshasalsoundertakentoreplacepalmoilwithalternativeswherepossibleandhasfurthercommittedtousingonlycertifiedsustainablepalmoilby2015.

FARMINGFORTHEFUTURE

Togetherwithourfarmers,werepioneeringanewapproachtogrowingfoodsustainablyandinharmonywithnaturesothatSouthAfricasfarmswillbeabletoprovideenoughfoodforfuturegenerationswithoutcompromisingqualityoraddingtothecost.WecallitFarmingfortheFuture.

FarmingfortheFutureisaholisticapproachthatmanagestheentirefarmingprocesssystematically.Itallstartswithbuildingandmaintainingthesoil,because,asanyfarmerwilltellyou,ittakesgoodsoiltoproducegoodfood.

Healthysoilisbetterabletoretainwater,soitneedslessirrigationandwateruseisreduced.Italsoneedsfewerchemicalinterventions,whichmeansfarmersonlyusesyntheticfertilisersorherbicideswhenneeded.


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Fewerchemicalsmeanlesschemicalrunoff,which,alongwithlesssoilerosionandlossoftopsoil,helpsmaintainwaterqualityandbiodiversity.Farmersalsouseintegratedpestmanagementprinciplesinordertoreducerelianceonchemicalpesticidesandherbicidesandencouragebiodiversity.Allthefarmerswhogrowproduceforusarejoiningusonthisjourney,andby2012allourlocallygrownfreshproduce(otherthanorganicallycertifiedproduce)willbegrownthisway.Somekeyprogressduringtheyear.

96farmswereauditedlastyearaspartoftheprogrammeoverthelastyear; theWWcompliancetargetforthisyearbasedonturnoverwas57%,while68.4%wasachieved; 23horticulturesuppliersarebeingintroducedtotheprogramme;and RecentFFFcustomerresearchshowedthatahighpercentageofcustomersunderstandtheprogrammefully

(54%).

FarmingfortheFutureinactionFlipNel,whosefarmhasbeensupplyingWoolieswithtomatoes,peppersandotherfreshvegetablesforyears,hasbeenoutsincedawn,runningjustafewofthehundredsofcheckshedoesroutinelytomakesurehiscropsaregettingjusttherightamountofwaterandfertilisertheyneed.FlipwasoneofthefirstWooliesfarmerstoadoptFarmingfortheFuture.Hesseenforhimselfhowfarmingthiswayimprovessoilandwaterqualityandcutswateruse.Hesalsoseenhowthenewmethodshavebroughtmorebirdsandinsectsbacktothefarm,andhowtheyrehelpingtokeepinsectsthatcoulddamagehiscropundercontrol.Healsoloveshearingthebirdssingingasheheadstothefieldsinthemorning.WATER

OverthecourseofthecurrentyearincreasingattentionhasbeenfocusedonwaterscarcityandqualityaskeyissuesforSouthAfricasdevelopment.SouthAfricaisawaterscarcecountry.Inaddition,thequalityofourwaterisincreasinglythreatened,inpartbyindustrialandagriculturalactivity.

ThemajorityofSouthAfricaswaterresourceisusedinfarmingirrigation,andWoolworths,asamajorsupplieroffreshproduce,hastoplayaroleinwaterconservation.AccordingtoWWFSAthestressplacedonSouthAfricasscarcewaterresourceshasresultedinmorethan84%ofmainstreamfreshwaterecosystemsbeingclassifiedasthreatenedinarecentnationalsurvey.

Wearedeeplycommittedtobeingpartofthesolutionandhavealonghistoryofworkingwithoursupplierstoinfluencechange.Wewillcontinuetoensurethatourbusinessandsupplychainactivityconservesourpreciouswaterresources.

Woolworthshascommittedtoreducingwaterusageandmanagingwastewaterandwatereffluent.Allsupplierswhomakefabricforourclothesadheretoverystrictstandards.Nomaterials,dyesorchemicalsusedintheproductionofWoolworthsclothingortextilesposeanunacceptablerisktohealthortotheenvironmentduringtheirmanufactureordisposal.Wecontinuetoentrenchourstrictcodeofconductregardingdyes(includingtheremovalofAzodyes),chemicalsandwatermanagementinoursupplychain.

Woolworthsprogrammeincludesthefollowingmeasures:

Woolworthsmeasurestheamountofwaterusedbysuppliersandworkswiththemtoreducewateruseandimprovewaterwastemanagementduringgrowing,productionandmanufacture;

withintheFoodsunitthisworkincludesthereductionofpesticides,fertilisersandwaterusage; WoolworthsfreshproducefarmershaveadheredtoEurepgapfarmingpracticesfornearlyadecade.Eurepgap

(nowknownasGlobalgap)isaninternationallyrecognisedstandardforsafeandsustainableagriculture,settingguidelinesforenvironmentalandlabourstandardsaswellasproductsafety;

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Woolworthsisthecountrysleadingretailerincertifiedorganicfreshproduce,whichisgrownwithouttheuseofartificialchemicals,suchasherbicidesandpesticides,anddoesnotreleasepotentiallyharmfulchemicalsintowatersupplies;

Woolworthsisalsoworkingwithourconventionalfarmerstohelpthemincorporatemoreresponsiblefarmingpracticesintothewaytheyfarminordertoestablishathrivingandsustainablemicrobialpopulationinthesoilthroughthefarmingforthefutureprogramme;

wecompletedawatertrialwith66foodsupplierswhichhashighlightedissueswithrunoffwater(intoriversandaquifers)fromirrigationpractices,andwastewaterfromfarmprocessingandareworkingwiththeGlobalCompactandtheGermanDevelopmentAgency(GTZ)tofurtheranalysewaterusageinagricultureanddevelopmethodsforreduction;

WoolworthsisworkingwiththeCouncilforScientificandIndustrialResearch(CSIR)toidentifySouthAfricanarableareasthatarelikelytostrugglewithwaterscarcityduetotheimpactsofclimatechangeandtoincorporatethisthinkinginitssupplychainstrategy;

wearecommittedtowaterconservationeducation,especiallyassistingtoeducateoursupplychainandprovidevaluablewatersavingstipstobothcustomersandemployees;and

weareworkingonresearchingandunderstandingthewaterfootprintofselectedpriorityproducts.

Waterneutrality

WoolworthsistheonlyretailertoformpartoftheWorldWideFundforNatures(WWF)WaterNeutralScheme.Thescheme,launchedinassociationwiththegovernmentsWorkingforWaterprogramme,encouragescorporatestobecomewaterneutral.Theprogrammehasmultipleobjectivesofreducingtheimpactofinvasivealienplantsonourwatersupplies,improvingtheproductivepotentialofland,restoringbiodiversityandecosystemsfunctionaswellascreatingjobsandeconomicempowerment.

Woolworthsiswaterneutralbyeliminatinginvasivewaterthirstyalienplantsonsupplierfarmsandinprotectedareas,suchastheTankwaKarooNationalPark.TheprojectwillreleaseenoughwaterintoSouthAfricaswatersystemtooffsetthewaterusedbyWoolworthsoperationseachyear,ultimatelymakingthecompanywaterneutral.Woolworthswillalsofundthetrainingandemploymentofworkerswhowillremovealienplants,therebycreatingemploymentaswellasmanagingitsenvironmentalimpactsresponsibly.Theprojectisa20yearcommitment.

AccordingtoWWFapproximately7%ofSouthAfricasaverageannualrunoffisusedbyalienandinvasiveplants.Byassistingtoeliminatetheseplants,Woolworthsmakesameaningfulcontributiontowardsconservingwaterresourceswellintothefuture.

Realestate

Whenevaluatingnewrealestateopportunities,Woolworthsconsidersifthedesignofthepropertyenablestheefficientuseofwaterandwaterwaste.Thisincludes:

storageanduseofrecycledandgreywatersystems,retainingasmuchwateronsiteaspossibleforreuse; useofindigenousshrubsandgroundcovers,minimisingirrigationneeds; stormwatermanagementallowingrainwatertobestoredandused;and pulsemetresinplacetoimprovewatermeasurementandmonitoring.SuchmeasureshavealreadybeenimplementedatthedistributioncentreinMidrand.

Headofficefacilitieshaveshowna24%decreaseinwaterusagefromour2008benchmarkandwehavealsoachieveda27%reductioninrelativeusageinstores(2008benchmark:122kl/m2).Thisissignificant,notonlyforconservation,butalsoasclearproofthatsustainabilitycandelivercostsavings.

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Farmingforthefutureandwater

Farmingforthefuturemeasuresthewaterrequiredfortheplantandirrigationisusedonlyifandwhenrequired.Earlyindicationsshowasignificantwatersaving.Theconservativeuseofchemicalsalsopreventsfertilisersandpesticidesfrompossiblefreshwatercontamination.

Werepleasedtosayby2012allourlocallygrownfreshproduce(otherthanorganicallycertifiedproduce)willbegrownthisway.

ThefarmingforthefutureauditresultshaveagainhighlightedtheneedforustofocusonwaterconsumptionandwastewatermanagementintheFoodssupplychain.TheprojectwiththeGermanDevelopmentAgency(GTZ)focusingonwastewatermanagementin66foodspackhousesisgoingtobeextendedtowineanddairysuppliers.

Woolworthssuppliersefforts

LaMotteproducesredwines(GrandRougeMerlotandGrandRougeCabernetSauvignon/ShirazReserve)forWoolworthsaswellaspotteddisaplants.LaMottehasacertifiedenvironmentalmanagementsystemandreducedtheirrelativewaterusageperlitreofwineby41%inthelastfinancialyearfroma2004benchmark.

KimberlyClarkSouthAfricaachieveda10%reductionintotalwaterusageinthelastfinancialyear.BothsuppliersarepreviouswinnersofWoolworthsecoefficiencyawardthatrecognisessuppliersforexcellenceinsustainablebusinesspractice.

ANIMALWELFARE,ORGANICANDFREERANGE

Woolworthshasalwayshadclearguidelinesonanimalwelfare.Theseinclude:

anNSPCAapprovedAnimalWelfareCodeofPractice;and insistencethatallanimalsdestinedforstoresmustberearedhumanelyandtreatedfairlyinaccordancewith

ourcodeabattoirsareregularlyauditedbyaWoolworthstechnologist.Woolworthswasalsoheavilyinvolvedinthedevelopmentandlaunchofbadgerfriendlyhoney,predatorfriendlyfarmingandsustainablefishingpractices.

Wedonotpermit:

animaltestingwehaveneveraskedorcommissionedourprivatelabelhealthandbeautysupplierstoconducttestingonanimals.Ouranimalwelfarepolicyrequiresthatsuppliersdidnotuseanyrawmaterialstestedonanimalsafter1January2001;

productsmadefromrealfur; sellingofwholeeggsfromcagedbirds; ourhealthandbeautysuppliersofourprivatelabeltouseingredientsthatarebyproductsofthefood

industry;and theuseofduckfeatheranddownthatisnotabyproductofthefoodindustryinhomeware.

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WoolworthsentireprivatelabelrangeoftoiletriesandcosmeticshasbeenapprovedbyBeautyWithoutCruelty(BWC).

WoolworthsextensiveEarthFriendlyrangeofhouseholdcleaningandpersonalcareproductsaremadewithnaturallyderived,plantbased,biodegradableingredientsandcontainnopetrochemicalsandnoartificialcolours.EveryproductcarriestheendorsementofBeautyWithoutCrueltyandWoolworthshasusedrecyclablebottleswhichthemselvesaremadefromatleast30%recycledmaterials.

Woolworthsiscommittedtoaddressingtheissueofmulesingofwoolproducingmerinosheep.Mulesingisthesurgicalremovalofstripsofwoolbearingwrinkleskinfromaroundthebreechofasheep.MulesingisacommonpracticeinAustraliaasawaytoreducetheincidenceofflystrikeonMerinosheep.AlthoughmulesingisnotpractisedinSouthAfrica,WoolworthswillcontinuetomonitorlocalSouthAfricansupplierstoensurethattheyconformtothepositionstatementmandatedbyCapeWoolsSA.

Freerangeeggs

Woolworthsisproudtohavebeenthefirstmajorlocalretailertostopsellingwholeeggsfromhenskeptincagesin2004onlywholefreerangeeggsaresoldinWoolworthsstores.Weremaintheonlymajorlocalretailertohaveachievedthis.

FreerangeeggproductioninSouthAfricaisregulatedbytheAgriculturalProductStandardsAct.WoolworthsfreerangeeggsupplierfarmersarefullycompliantwiththeregulatoryrequirementsandtherequirementsforfreerangeproductionasstipulatedbytheSouthAfricanPoultryAssociation.Ourfreerangefarmersareauditedregularlytoensureadherencetoourstrictstandards.

Ourfreerangehensenjoyaccesstoamplefoodandwater,sunshineandshade,theoutdoorsandprotectiveshelters.Theyarefedagrainbaseddietthatcontainsnoanimalbyproducts.

Thefirsthundredfoodlinesmadewithfreerangeeggswillappearonourcountersinthelastquarterof2010withseventymoreappearingin2011.Wewillbechanging"factorybyfactory"asthisiscontrollableandwecanguaranteeintegrity.

Organicproducts

WoolworthsoffersSouthAfricanconsumersthewidestrangeofcertifiedorganicproducts,frompastaandpeanutbuttertoTshirtsandtowels.InFebruary2008welaunchedover100neworganicgrocerylineswhichcaterforbothbasicgroceryneedsandthemorespecialisedtastesofthecontemporarycook.Therangeincludesjams,pastasandpastasauces,rice,condiments,oils,beans,breakfastcereals,biscuits,teas,coffees,juices,nuts,chocolatesandmore.Thishasmadeiteasierthaneverforshopperstoleadamorecomprehensiveorganiclifestyle.

Woolworthsbeganitsorganiccottonjourneyin2004andhassteadilyincreaseditsuseoforganicallygrowncottonoverthepastsixyears.Woolworthsoffersacomprehensivecollectionoforganiccottonproductsinchildrens,mensandwomensouterwearandsleepwear,babyclothing,towelsandbedding.

in2010ourorganicandfreerangefoodsaleswereoverR500m; organicclothingsaleswereconsiderablyhigherthan2009sales,andoverR400moforganiccottonsaleswere

achieved,stillbelowthetargetwehavesetforourselvesfortheyear; wenowsellonlyfreerangelamb,atthesamepricepointasconventionallambwassoldat;and wehavesetinternalsalestargetsforitemsmadefromothersustainablefibres,includingsoya,bambooand

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Sustainablefibres

Drivinginnovationinclothingcontinuedtobeastrongfocus.Theuseoforganiccottoninclothingincreasedandgarments

the good business journey report 2010

Documents

good to great – the journey !

good business

standards…the journey to business excellence, the journey...

corporate social responsibility: making good business...

an entrepreneurs journey: the good, bad, and the awesome

business growth: the journey introduction

my journey. how good is our school? a journey to excellence...

good nutrition is good for business

win-win why doing good is or business - philanthropy ·...

good web design is good business

good business journey - cbd meeting...

business is good but good business is better!

good workplace culture is good business

woolworths holdings limited 2013 good business … ·...

good governance is good business

our journey from good to great

from our ceo our journey together. for good

the business journey partner presentations_the...

bwg3: a snack for the journey - the good book

the business journey partners