Why is the Woolworths (ASX:WOW) share price up 5% in a week?

The Woolworths Group Ltd (ASX:WOW) share price has had a very good week, rising 5%. Here's why investors might be piling in.

A young woman smiling and looking happy, indicating a positive share price movement on the ASX market

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) has certainly had an interesting week. Over the past five trading days, the ASX 200 is up 0.6%. But that 0.6% hides a '2-speed market'.

In one lane, we have seen some ASX tech shares like Afterpay Ltd (ASX: APT) sold off. In the other, we have seen strength from the ASX banks and most of the ASX 200's blue chip shares. One of those points of strength has been the Woolworths Group Ltd (ASX: WOW) share price.

Yes, Woolworths shares are up roughly 5% over the past five trading days. That's a pretty strong move for an ASX giant like Woolies. To put this in perspective, Woolworths shares have risen 7.54% on today's prices since 30 May 2014.

So why the sudden rush to buy this grocery giant?

3 reasons why the Woolworths share price might be moving higher

Dividends, baby

Firstly, we did get a market update on Tuesday that might have gotten investors a little hot under the collar. That was a dividend notice for Woolies' interim dividend of 53 cents per share that will be paid out on 14 April (which will incidentally be the 109th anniversary of the Titanic's unsuccessful marriage with an iceberg, not that that is relevant).

But investors would have already known that was coming, seeing as Woolies announced it as part of its earnings report last month.

Woolworths is about to get a divorce of sorts

Secondly, perhaps investors are getting excited for Woolworths' upcoming demerger of its Endeavour Group. The company also informed investors last month that the divorce is scheduled for June 2021 after being delayed by the events of last year. Endeavour Group houses Woolworths' bottle shop chains (Dan Murphy's and BWS). As well as a collection of pubs the company owns.

If all goes well, Woolworths shareholders will most likely receive shares of the new company come June. Demergers tend to generate value for shareholders. We saw this displayed in dramatic form when Wesfarmers Ltd (ASX: COL) offloaded Coles Group Ltd (ASX: COL) back in 2018. Both companies have gone on to rise substantially in value from that point.

Perhaps investors are hoping for a repeat performance from Woolworths, and are piling in this week as the date nears.

The old 'rotation'

Finally, as we have touched on earlier, this could just be the result of investors seeking out safety. The last month or two has seen the market abandon what some might call 'risky' shares like Afterpay for shares that could be considered 'safe harbours' like Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS) and Woolies. Coles has also had a decent week too.

Often, the large fund managers that are responsible for most of the ASX's short-term fluctuations tend to move in packs. Some commentators call this a 'rotation'. It's possible that all we are seeing in the Woolworths share price over the past week or so can just be put down to that.

Should you invest $1,000 in Lovisa Holdings Limited right now?

Before you buy Lovisa Holdings Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Lovisa Holdings Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares returned to positive territory this Tuesday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Breville, Clarity, EOS, and TechnologyOne shares are racing higher today

These shares are having a strong session on Tuesday. But why?

Read more »

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the week today.

Read more »

A person in a gorilla suit leaps really high holding a banana, nearly doing the splits.
Share Gainers

Up 1,238% in a year, why is this ASX gold stock surging again on Monday?

The ASX gold stock is now well into ten-bagger range and still rising fast today.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why EOS, Gorilla Gold, Lendlease, and OFX shares are charging higher today

These shares are starting the week on a positive note. But why?

Read more »

A woman in a business suit sits at her desk with gold bars in each hand while she kisses one bar with her eyes closed. Her desk has another three gold bars stacked in front of her. symbolising the rising Northern Star share price
Gold

How this ASX All Ords gold stock turned $10,000 into $78,740 in just one year

The ASX All Ords gold miner has raced higher over the year. Let’s find out how.

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors enjoyed a happy end to the trading week this Friday.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

CBA shares top $170. Where to now?

Another day, another record high for CBA shares.

Read more »