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Wholesale and Retail of Food
BY Duncan Bekker
South Africa
26 June 2018
R 14 400.00 (ZAR)  
estimated $ 1 114.23 (USD) *
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The Wholesale and Retail of Food


A precise valuation of the entire wholesale and retail market for foodstuffs is complicated by the fact that the informal sector continues to play a significant role but estimates of its value vary wildly. Recent market surveys indicate an estimated figure of between R42bn and R46bn for the informal food retail market in 2016. In contrast, Pick 'n Pay, citing Nielsen, states that the informal sector accounts for between 30% and 40% of South African food sales and estimates the total market for 2018 is worth more than R800bn. A number of submissions to the Competition Commission, which is currently conducting an inquiry into the Grocery Retail Market, state that South Africa's large retailers hold more than 70% of national market share and some estimates reach as high as 90%.


Economic Conditions


The South African grocery industry is highly dependent on consumer spending and economic growth. While positive at 1.3% year-on-year, GDP growth in 2017 was muted and consumers were pressured as real incomes failed to keep up with relatively high food price inflation. Combined with high unemployment, South Africa's slow economy is not conducive to increases in disposable income and retail sales growth has been muted. However, proportional grocery spending at middle- and upper-income households is increasingly rapidly and retailers are looking to leverage the upmarket, high-margin niche currently occupied by Woolworths.


Report Coverage


The report on the wholesale and retail of food examines current conditions, the strategies employed to increase market share and factors that influence the success of the highly competitive sector. Profiles for ten companies are included in this comprehensive report. Apart from the “Big Five”, Shoprite, Pick 'n Pay, SPAR, Massmart and Woolworths, there are profiles for Wellness Warehouse (Pty) Ltd, which has 29 stores, including one online store, and Choppies Enterprises Ltd, which secured approval to acquire 21 retail stores owned by South African firm, Jwayelani Retail during 2016.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 19
4.1.2. Regulations 20
4.1.3. Enterprise Development and Social Economic Development 22
4.2. Continental 24
4.3. International 26
5. INFLUENCING FACTORS 27
5.1. Economic Environment 27
5.2. Price Increases 28
5.3. Consumer Preferences 30
5.4. Labour 30
5.5. Environmental Concerns 32
5.6. Ethical Trading and Governance 33
5.7. Technology, Research and Development (R&D) and Innovation 33
6. COMPETITION 35
6.1. Barriers to Entry 40
7. SWOT ANALYSIS 41
8. OUTLOOK 41
9. INDUSTRY ASSOCIATIONS 42
10. REFERENCES 42
10.1. Publications 42
10.2. Websites 43
COMPANY PROFILES 44
BIG SAVE DISTRIBUTION CENTRE (PTY) LTD 44
CHOPPIES ENTERPRISES LTD 46
FOOD LOVERS HOLDINGS (PTY) LTD 55
MASSMART HOLDINGS LTD 58
PICK N PAY STORES LTD 64
SHOPRITE HOLDINGS LTD 69
SPAR GROUP LTD (THE) 74
SUBTROPICO LTD 79
WELLNESS WAREHOUSE (PTY) LTD 83
WOOLWORTHS (PTY) LTD 86