RETAIL: CONSUMER STAPLES
This sector comprises the four major supermarket groups, with SPAR an outlier in that it operates more as a wholesaler with outlet franchisees. It is also the only one with operations in Europe.
INDUSTRY EXPOSURES
Business: Load-shedding, water shortages and distressed consumers have weighed most on this sector post-pandemic. Issues dealt with in the report:
Macroeconomic trends affecting the Consumer staples industry
Trend towards e-commerce, with last-mile delivery challenges in emerging market suburbia
Consumer trends in a weak economic environment
Supply chain and distribution efficiency challenges in the face of power cuts
Environment: The Climate Change agenda has lower materiality for the lower LSM consumer.
Society: The social unrest and rioting of July 2021 that affected KwaZulu-Natal and Gauteng provinces prompted measures to improve mall security. Other societal issues:
Product access and food security
Fair treatment of labour in a high turnover environment
Fair treatment of franchisees (SPAR)
Security of premises from armed robbery and burglaries
Governance: Issues specific to each company:
PIK: High CEO turnover in a family-run business with poor accountability to minorities
SHP: CEO pay challenged by shareholders
SPP: Accused of racial bias in treatment of franchisees; board refreshed in response to governance failings
In this report
Pick n Pay Stores (PIK)
Pepkor Holdings (PPH)
Shoprite (SHP)
SPAR (SPP)
Price: $635
Included:
Full 23-page report covering all 4 Consumer staple companies in the Retail sector
Introductory in-person consultation, scheduled at your convenience; learn more about how to link FarSight scores with your valuation process, and get up-to-date answers to specifics on each company under coverage.