Business Day (Johannesburg)

South Africa: SA Groups Make List of World's Top 250 Retailers

Johannesburg — FOUR South African food and general goods retailers have been ranked among the top 250 in the world, according to consulting firm Deloitte Touche Tohmatsu and Stores magazine's 2006 Global Powers of Retailing survey.

Metro Cash and Carry, Pick 'n Pay, Shoprite Holdings and Massmart all feature on the list, based on their retail sales for the year July 2004 to June 2005.

Metro Cash and Carry was the highest ranked SA retailer, at number 81, with an estimated $8bn in retail sales.

Pick 'n Pay was second-highest in 123rd position, with $5bn in retail sales.

The list continues to be dominated by the American Wal-Mart group, which alone accounted for 10% of the top 250's combined sales, at $258bn.

Wal-Mart is more than three times the size of its biggest rival, French discount store Carrefour.

The survey said the top retailers all had powerful brands in their markets, compelling customer value propositions and flexible supply chains.

Nearly 60% of the top 250 retailers in the survey are food-related businesses, while hypermarkets or supercentres remain the leading format, with convenience stores "registering robust growth".

The survey found that these formats had considerable potential in emerging economies, with all four South African companies mentioned following this particular format.

Massmart and Pick 'n Pay also featured in the list of the 50 fastest-growing retailers in the past five years, with Massmart ranked 24th for achieving compound annual growth of 21,3% and Pick 'n Pay 31st with annual growth of 18,2%.

US supermarket chain Roundy's was the fastest-growing retailer worldwide, with 56,7% annual growth.

The survey found that the fastest-growing retailers are small and focused, operating in only one or two countries.

Globalisation and industry consolidation were creating intense competition and price pressures among retailers, the survey said.

Globally, retailers had shifted their focus from profitable growth strategies to managing the growing risks confronting their sector.

These included vulnerability to the global economy due to the nature of the supply chain, effects of the increasing price of oil on consumer spending and increasing sophistication of consumers.

Nedcor retail analyst Syd Vianello said while these issues were a concern for South African retailers "to a certain extent", increasing food inflation and rising consumer debt were more pressing issues.


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