The 5 Largest Retailers In South Africa

Shoprite

The 5 Largest Retailers in South Africa

VENTURES AFRICA – South Africa is increasingly appearing on the radar screen of western retailers looking for the next growth opportunity in emerging markets as consumer spending remains subdued at home. Consultants Deloitte and Planet Retail have identified South Africa, along with four other African countries – Algeria, Kenya, Morocco and Nigeria – as being among the ten new markets most likely to appeal to multinational store groups in the coming years. Foreign investment in the South African retail sector has already hit the news, with American retail giant Wal-Mart buying a majority stake in Massmart, giving it a foothold in the continent’s biggest economy and a presence in some 13 other African markets, ranging from Botswana to Zambia. There are other South African retailers that are big and getting bigger still. Tom Jackson takes us through the big five.

Shoprite Holdings Ltd

The largest retail company in the country, Shoprite operates over 1,200 and 270 franchise outlets in 16 countries across Africa and the Indian Ocean Islands. The largest individual shareholder and chairman is South African billionaire Christoffel Wiese.

The Shoprite Group of Companies started from small beginnings in 1979 with the purchase of a chain of 8 supermarkets in Cape Town. The next 30 years saw various acquisitions and innovative expansion strategies. It opened in Namibia in 1990 and Zambia in 1995, as well as acquiring stores in Madagascar. In 2005 it acquired Foodworld, with 13 stores, and South African ticket seller Computicket. In 2011 it acquired the franchise division of Metcash, including such trademark names as Friendly, Seven Eleven and Price Club Discount Supermarket.

In its last financial results, Shoprite increased turnover by 14.4 per cent and grew by 8.5 per cent.

Pick ‘n Pay

The second-largest supermarket chain in South Africa was established in 1967, and can be found in other regions of southern Africa as well as Mauritius and Australia. Founded by Jack Goldin, Pick ‘n Pay was purchased by Raymond Ackerman, who ran the company until he retired in 2010.

Other supermarket store chains in South Africa that are part of the Pick ‘n Pay group are Score Supermarkets and Boxer. In 1984 the first Pick ‘n Pay stores were opened in Queensland, Australia, and the company still owns stores in the country. Due to a slump in profits, in July 2011 the company told labour unions that it would lay off 3,137 of its 36,673 staff. Pick ‘n Pay is now branching out into online shopping after striking a deal with service provider PayU to launch a new online store.

Massmart Holdings Ltd

Massmart owns local brands such as Game, Makro, Builders’ Warehouse and CBW. It is the third largest distributor of consumer goods in Africa, the largest retailer of general merchandise, liquor and home improvement equipment and wholesaler of basic foods.It operates 302 stores in South Africa and 12 other Sub-Saharan countries. U.S. giant Wal-Mart acquired 51 per cent of the firm in June 2011, with court challenges against the purchase rolling on until March this year.

Massmart was originally founded in 1990, beginning with the acquisition of six Makro stores. It listed on the JSE Limited on 4 July 2000. Since its founding, Massmart has grown both organically and by acquisition. This month, its shares dropped more than three per cent as the firm undershot analysts estimated with its full year’s earnings guidance. It said headline earnings likely rose as much as 34 percent, with analysts were expecting a profit increase of 66 percent.

SPAR Group

SPAR operates across 33 countries on five continents, with approximately 12,000 stores internationally. It was established in South Africa in 1963 as part of WG Brown, becoming a wholly-owned Tiger Brands subsidiary in 1988. It was unbundled and separately listed on the JSE in 2004. The Group operates as a wholesaler and distributor of goods and services to independently-owned SPAR retail grocery stores, Build it merchandise outlets, and TOPS at SPAR liquor stores.

Metcash Trading Africa (Pty) Ltd

Metcash Trading distributes fast moving consumer goods in Africa. The company also operates a network of supermarkets and convenience stores, fast foods outlets, and liquor outlets; cash and carry outlets that distribute groceries and related consumer goods to the traders; wholesale stores, which offer general merchandise goods; and retail outlets that provide electronic, household, and other durable goods. It distributes its products to franchised stores, garage forecourt stores, and supermarkets as well as delivery, salespeople, and credit facilities. The company is based in Johannesburg, South Africa with operations in Malawi, Namibia, Swaziland, and Lesotho. In 2011 it sold its franchise division to Shoprite.