Who Owns Whom

The Wholesale and Retail of Food

Gary Phillips | South Africa | 19 October 2021

The wholesale and Retail of Food

The wholesale and retail trade of food in South Africa is dominated by national corporate supermarket chains who play a significant role in shaping South Africa’s entire food system. Major companies have benefitted from the nearly three decades of a rapidly-growing middle class, the development of centralised distribution and application of new supply chain and logistics technologies, and the rapid growth of malls. Food retail, which accounts for more than half of all retail sales in South Africa, is defined by nationwide high-quality food supply, market concentration and maturity. National supermarket chains and their development have also had a fundamental impact on the shape and functioning of the food wholesale and upstream food processing and agricultural industries.

Resilience and Challenges

The strength and resilience of the food retail industry in adequately supplying South Africa was evident during the pandemic and the widespread unrest in KwaZulu-Natal and Gauteng in July 2021, despite the disruption to trading, property, stock levels and supply lines. The vulnerability of the industry, however, has been seen in the challenge of weakening consumer spending power and saturation in supermarket and shopping centre supply in major urban areas. This saturation has driven retailers to invest in Africa and in South Africa’s small towns, rural areas and townships. The results of this expansion have been mixed.

Trends

The rapid increase in online food purchases and delivery was a major feature of the industry over the past year as food ecommerce accelerated considerably. South African food retailers have also aggressively pursued convenience markets such as forecourts and increased private label foods in terms of range and sales. Difficulties in certain countries on the African continent resulted in major retailers reconsidering their investments in some markets.

Report Coverage

This report focuses on the wholesale and retail of food in South Africa. It includes comprehensive information on the size and state of the sector, the performance and developments of notable players and the major factors influencing the sector. There are profiles of 19 companies including major players such as Shoprite, Pick n Pay and Woolworths and Massmart, notable private companies such as Food Lovers and Wellness Warehouse, and cash and carry companies such as Africa Cash and Carry.

Table of Contents

PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 2
2.1. Industry Value Chain 8
2.2. Geographic Position 9
3. SIZE OF THE INDUSTRY 13
4. STATE OF THE INDUSTRY 16
4.1. Local 16
4.1.1. Trade 28
4.1.2. Corporate Actions 30
4.1.3. Regulations 30
4.1.4. Enterprise Development and Social Economic Development 31
4.2. Continental 33
4.3. International 39
5. INFLUENCING FACTORS 40
5.1. Coronavirus 40
5.2. Economic Environment 48
5.3. Impact of the July 2021 Unrest 50
5.4. Technology, Research and Development (R&D) and Innovation 52
5.5. Rising Input Costs 53
5.6. Environmental Concerns 55
5.7. Labour 55
6. COMPETITION 61
6.1. Barriers to Entry 62
7. SWOT ANALYSIS 63
8. OUTLOOK 64
9. INDUSTRY ASSOCIATIONS 65
10. REFERENCES 65
9.1. Publications 65
9.2. Websites 66
APPENDIX 1 67
Summary of Notable players 67
COMPANY PROFILES 71
AFRICA CASH AND CARRY (CROWN MINES) (PTY) LTD 71
BIG SAVE DISTRIBUTION CENTRE (PTY) LTD 72
BUYING EXCHANGE COMPANY (PTY) LTD (THE) 74
CONSOLIDATED STORE HOLDINGS (PTY) LTD 76
DEVLAND CASH AND CARRY (PTY) LTD 79
ELITE STAR TRADING 56 (PTY) LTD 81
FOOD LOVERS HOLDINGS (PTY) LTD 83
ICC BUYING GROUP (PTY) LTD 87
INDEPENDENT BUYING CONSORTIUM (PTY) LTD 88
KIT KAT GROUP (PTY) LTD 90
MASSMART HOLDINGS LTD 92
PICK N PAY STORES LTD 98
PREMJEE CASH AND CARRY (PTY) LTD 103
SHOPRITE HOLDINGS LTD 105
SPAR GROUP LTD (THE) 111
SUBTROPICO LTD 117
UNITRADE MANAGEMENT SERVICES (PTY) LTD 120
WELLNESS WAREHOUSE (PTY) LTD 122
WOOLWORTHS (PTY) LTD 125