Five SA retailers in world top 250

19 January 2007

Five South African companies rank among the top 250 retailers in the world, according to Deloitte Touche Tohmatsu and Stores magazine’s Global Powers of Retailing 2007 survey.

The survey ranked retailers according to their sales for the year from 1 July 2005 to 30 June 2006.

According to Business Day, food and grocery group Pick ‘n Pay was the highest ranked South African retailer, coming in at 122nd – up one place from the previous year – with sales of US$5.5-billion.

Pick ‘n Pay was followed by rival food and grocery firm Shoprite (123rd place), general merchandise retailers Massmart (140th) and Metro Cash & Carry (230th), and fashion retailer Edcon (246th), Business Day reports.

Two of these firms – Shoprite and Edcon – are the subject of recent private equity buyout bids. Local player Brait Private Equity has made an offer of around US$1.8-billion for Shoprite, while Bain Capital, Blackstone Group and Kohlberg Kravis Roberts & Co have reportedly offered around $3-billion for Edcon.

Strong retail environment
Strong consumer confidence and a growing black middle class have fuelled strong retail sales growth in South Africa over the past few years.

Statistics South Africa reported this week that retail trade sales at constant prices for the three months to November 2006 had increased by 11.5% compared to the same period in 2005 – the largest increase for the three months up to November since 2000.

South Africa’s retail trade sales at constant prices for the first 11 months of 2006 increased by 10%, Stats SA reported – the highest growth for the first 11 months of the year since 2000.

According to the Global Powers of Retailing 2007 survey, the amount of money consumers spent with the world’s top 250 retailers reached a record $3.01-trillion between 1 July 2005 and 30 June 2006, up 6% over the previous year.

Six of the top 10 retailers were US companies – the others coming from the UK, France and Germany – with US-based Wal-Mart topping the rankings with sales of $315-billion, followed by France’s Carrefour with $92.7-billion in sales.

Middle class growth worldwide
According to the survey, the growth in the middle class worldwide has seen specialty retailers taking root in the top 250 list.

“In 1995, 61% of the top 250 operated food-related formats,” Deloitte said in a statement. “However, in this year’s report, 135 of the top 250 retailers (58%) were food-related as specialty stores expanded internationally and displaced food retailers on the list.”

Lawrence Hutter, Deloitte UK partner and global consumer business leader, commented: “The rising share of specialty retailers points to a burgeoning middle class worldwide – with more disposable income to spend on apparel and home-goods – as well as the globalization of fashion trends.

“These trends will likely give rise to more global expansion by specialty retailers, in order to meet this group’s new shopping needs.”

SouthAfrica.info reporter

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