Question $1(10$ marks$)$

As mentioned in the article, South Africa $$houses Woolworths' upmarket grocery, fashion, beauty and home businesses$.$

Explain how Woolworths would fit into the circular flow model of income and spending.

Question $2(10$ marks$)$

Substantiate the type of price elasticity of demand that would be most applicable to products offered by Woolworths and

discuss its importance to Woolworths$$ pricing managers.

Question $3(10$ marks$)$

Taking the article into consideration, speculate and discuss the factors that may have an impact on the supply of products

offered by Woolworths

Read the article below and answer the questions that follow:

Woolworths' HY profit up $75\%$; South Africa power crisis to hurt growth

South African department store chain Woolworths Holdings Ltd $($WHLJ$.$J$)$ reported a $75\mathrm{.}1\%$ jump in mid$-$year earnings on

Wednesday but warned of a slower growth second half impacted by the country's power crisis.

Brick$-$and$-$mortar sales increased substantially in the first half ended Dec. $25,$ the company said, as shoppers, particularly in

Australia, returned after prolonged pandemic lockdowns.

Woolworths, which also operates the Country Road and David Jones chains in Australia, said headline earnings per share

$($HEPS$)$ rose to $294\mathrm{.}5$ cents from $168\mathrm{.}2$ cents a year earlier.

Group turnover and concession sales increased by $18\mathrm{.}5\%$ to $49\mathrm{.}9$ billion rand $($ $$2\mathrm{.}73$ billion$),$ while profit before tax jumped

$63\mathrm{.}3\%$ to $3\mathrm{.}7$ billion rand.

In South Africa, which houses Woolworths' upmarket grocery, fashion, beauty and home businesses, the retailer grappled

with crippling rolling power outages which have reduced its domestic adjusted operating profit by an estimated $15$ million

rand per month.

Chief Executive Roy Bagattini told investors that Woolworths was incurring about $20$ to $30$ million rand per month in food

waste and diesel costs when power is out for up to $10$ hours a day.

The "debilitating" power crisis, constrained consumer demand and normalisation of trade in Australia were likely to result in

slower profit growth from continued operations in the second half which began on Dec. $26,$ Woolworths added.

Bagattini told Reuters that the retailer will ramp up renewable energy back$-$up power supply at its distribution centres, while

working with landlords at shopping malls to move towards renewable energy.

South African state power utility Eskom is implementing the worst rolling blackouts on record, leaving households in the

dark for up to $10$ hours a day and forcing retailers to crank up diesel generators for hours, which is putting pressure on their

margins.