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.