Why I think Woolworths shares could beat the market over 10 years

When I think about what drives long-term outperformance, I come back to a fairly simple idea. 

The businesses that tend to win over a decade are usually the ones with consistent demand, pricing power, and the ability to quietly grow earnings year after year.

That is why I think Woolworths Group Ltd (ASX: WOW) shares have a real chance to beat the market over the next 10 years.

A business built on everyday demand

Woolworths sits in one of the most resilient parts of the economy. People still need to buy groceries regardless of what interest rates are doing or how the broader market is performing.

That does not make it immune to short-term pressures. Margins can move around, and competition can pick up. But over long periods, this kind of demand tends to be stable and predictable.

That stability matters more than it might seem. It gives Woolworths a consistent base of revenue that can compound over time, even if growth is not explosive in any single year.

Scale that supports earnings growth

One of the key advantages Woolworths has is scale. It operates one of the largest supermarket networks in Australia, which gives it significant buying power and operational efficiency.

Over a 10-year period, even modest improvements in margins, combined with steady sales growth, can lead to meaningful earnings expansion.

A steady compounding profile

Woolworths is not the type of ASX share that typically delivers sudden, dramatic gains. But that is not really the point here.

What matters is consistency. If a business can grow earnings at a steady pace, reinvest into its network, and maintain strong market share, the compounding effect can become quite powerful over time.

It is also worth noting that Woolworths continues to be viewed as a high-quality defensive within portfolios, sitting alongside other stable names that can deliver dependable growth.

That kind of positioning tends to attract long-term capital, which can support valuation over time.

Why time is the key factor

Over shorter periods, Woolworths shares might lag the market. That can happen if growth stocks are leading or if defensive names fall out of favour.

But over a decade, the equation shifts. The combination of steady earnings, strong market position, and essential demand can add up in a way that is easy to underestimate.

For example, over the last 10 years, Woolworths shares have delivered an average total return of 9% per year.

This is not about trying to pick the fastest grower. It is about owning a business that can keep moving forward, year after year, with fewer surprises along the way.

Foolish takeaway

Woolworths is unlikely to be the most exciting share on the ASX. But over 10 years, it does not need to be.

If it continues to grow steadily, defend its market position, and benefit from its scale, I think it has a solid chance of delivering returns that quietly edge past the broader market.

The post Why I think Woolworths shares could beat the market over 10 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.