Introduction
The wholesale and retail of food in South African generates well over R1.2tn in revenue, and even more including the growing but hard to quantify informal food trade. Food retail is concentrated and dominated by four national, vertically integrated companies that control more than half the market.Facing reducing returns in a mature, saturated South African urban market and African investments that have produced mixed results, retailers have invested in strategies to lower prices, differentiate stores and find new markets in small towns, rural areas, and townships. Food wholesalers, independent retailers, and informal traders, under pressure from this retail expansion, have adopted new strategies to attract consumers. The biggest risk to the success of these responses is the ability of consumers to continue to spend in a low growth, high inflation and high unemployment environment.
Opportunities
Enforcement of the findings of the Competition Commission’s grocery retail market inquiry and the agreements of the Agricultural and Agro-Processing Master Plan can open opportunities for smaller players.Expanding convenience market, forecourt retail, and pre-prepared meals. Market share growth among affluent consumers. Private label brand growth. Rapid population growth, urbanisation, and rise of the middle-class in regional Africa to boost demand for food and modern shopping. Rapidly expanding online shopping demand, initiated by the pandemic Roll out of discounters, franchises, and corporate spaza shops to grow formal market participation.
Outlook
Wholesale and retail of food in South Africa needs a rise in consumer spending after three tough years in which unforeseen events have dampened economic recovery from the pandemic.While the industry is resilient, well-capitalised, has strong leadership, and is innovating to protect margins and stimulate consumer demand, it needs a recovery in economic growth and wealth. The threat of a global recession, political turmoil, and the electricity crisis make it unclear whether consumer spending will increase. The continued pace of innovative investments in the supply chain, services, store footprints, online retail and new store formats will be vital in securing a positive outlook for the industry.
Report Coverage
This report on the wholesale and retail of food in South Africa includes comprehensive information on the state and size of the sector, the major players, developments, food and other input prices, economic factors, the presence of South African companies on the continent and the development of online delivery.There are profiles of 20 companies including the major retailers Shoprite, Pick n Pay, Woolworths, Spar and Massmart and wholesalers, cash and carry and buying groups including Africa Cash and Carry, Devland Cash and Carry, ICC Buying Group and Unitrade.
Strengths
A large and growing informal sector with strong linkages to formal wholesale supply.A strong regional presence in Southern Africa. Capability for rapid increase in ecommerce trading. Growing population and stable food demand. Relatively high formal sector participation and extensive supermarket footprint throughout the country. Resilient companies with expertise and experience operating in a challenging trading environment. Very well-developed and efficient supply chains and logistics networks.
Threats
Continued poor economic growth and rising unemployment is affecting consumer spending.Digital disruption from innovative online retailers. Growing competition in all market segments. Large retailers’ investment exposure to risks associated with volatile African markets. Traders facing rising input and operating costs but being unable to pass costs onto price-conscious consumers.
Weaknesses
Highly dependent on economic growth to support consumer spending beyond essential purchases. Increasing competition and relatively high barriers to entry in urban areas and shopping centres. Informal sector very sensitive to shocks and vulnerable to supply interruptions. Lack of skills. Market is increasingly mature and saturated. Relatively thin trading margins with profit growth primarily supported by streamlining and cost-cutting.Table of Contents
1. INTRODUCTION4. AFRICA5. INTERNATIONAL8. SWOT ANALYSIS9. OUTLOOK10. INDUSTRY ASSOCIATIONS
2. DESCRIPTION OF THE INDUSTRY
3. LOCAL
6. INFLUENCING FACTORS
7. COMPETITIVE ENVIRONMENT
11. REFERENCES
APPENDIX
COMPANY PROFILES
Companies Mentioned
- Africa Cash and Carry (Crown Mines) (Pty) Ltd
- Ambassador Commerce Ltd
- Amber Support Solutions Ltd
- Axis Cleaning and Support Services Ltd
- Axis Group Integrated Services Ltd
- Axis Security Services Ltd
- B.I.C Services Pty Ltd
- Bidcorp International Ltd
- Bidvest Food Malawi Ltd
- Bidvest Group (UK) PLC (The)
- Bidvest Group Australia Pty Ltd (The)
- Bidvest Noonan (ROI) Ltd
- Bidvest Noonan (UK) Ltd
- Bidvest Services (ROI) Ltd
- Bidvest Services (UK) Ltd
- Bidvest Services Group (UK) Ltd
- Big Save Distribution Centre (Pty) Ltd
- Biz Afrika 710 (Pty) Ltd
- Bowwood And Main No 49 (RF) (Pty) Ltd
- Breckwick Holdings (Pty) Ltd
- Bullred Farming (Pvt) Ltd
- Buying Exchange Company (Pty) Ltd (The)
- Cadbury Swaziland (Pty) Ltd
- Cape Foods (Pty) Ltd
- Capespan North America LLC
- Chocolaterie Confiserie Camerounaise SA
- CIM Feeds Trading SA (Pty) Ltd
- CLM Safety Ltd
- Consolidated Store Holdings (Pty) Ltd
- Cordant Cleaning Ltd
- Cordant Security Ltd
- Cordant Thistle Ltd
- Country Road Group Holdings Pty Ltd
- Crane Midco (Guernsey) Ltd
- Crane Midco Ltd
- Crown Food Ingredients Ltd
- Darsot and More Chemicals (Pty) Ltd
- Dartry Laundry Ltd
- Dawson Dairy (Pty) Ltd
- Deli Foods Nig Ltd
- Devland Cash and Carry (Pty) Ltd
- Direct365Online Ltd
- Diverse Distribution (Pty) Ltd
- Elite Star Trading 56 (Pty) Ltd
- Epsilon Test Services Ltd
- Eswatini Mahewu (Pty) Ltd
- Expo Africa (Pty) Ltd
- Expo Africa Marketing (Lesotho) (Pty) Ltd
- Expo Africa Marketing Ltd
- Expo Africa Marketing Swaziland (Pty) Ltd
- Expo Mozambique Ltd
- Expo Zambia Marketing Ltd
- Famous Brands Franchising Kenya Ltd
- Famous Brands Group (Zambia) Ltd
- Famous Brands Lilongwe (Pty) Ltd
- Farmwise Marketing (Pty) Ltd
- Farmwise Properties (Pty) Ltd
- Fast Pace Trade And Invest 25 (Pty) Ltd
- Five Star Performance (Pty) Ltd
- Food Concepts Pioneer Ltd
- Food Lovers Holdings (Pty) Ltd
- Future Carpet Cleaning Services Ltd
- Future Cleaning (Southwest) Ltd
- Future Cleaning Services Ltd
- G and C Shelf 115 (Pty) Ltd
- Gestao de Terminais SA
- Goodview Ltd
- Gorilla Holdings Ltd
- Guzman Gastronomia and Cuttings SL
- Halamandaris Props (Pty) Ltd
- Hentiq 2009 (Pty) Ltd
- Hentiq 2010 (Pty) Ltd
- Horizon Fruits Export B.V
- Hygiene Matters Ltd
- ICC Buying Group (Pty) Ltd
- Independent Buying Consortium (Pty) Ltd
- JB Retail 2401 (Pty) Ltd
- Kalahari Training Institute (Pty) Ltd
- Karmarton Ltd
- Karsten Europe B.V
- Karsten International Holdings Ltd
- Karsten Munoz (UK) Ltd
- Karsten Property Holdings B.V
- Karsten UK Ltd
- Kimberley Veemark (Pty) Ltd
- Kit Kat Group (Pty) Ltd
- L. Lynch (H20) Solutions Ltd
- L.Lynch Interact Ltd
- Ladismith Cheese Namibia (Pty) Ltd
- Libstar Services Mauritius
- Logico Unlimited (Pty) Ltd
- LPM Acquisitions Ltd
- Mac Marketing Communications Ltd
- Mac Mobile International Ltd
- Mandla Mahewu (Pty) Ltd
- Massmart Holdings (Pty) Ltd
- Mayflower Hygiene Supplies (Ireland) Ltd
- Mayflower Hygiene Supplies (London) Ltd
- Mogaladi Fuel (Pty) Ltd
- Move My Drinks Ltd
- Natures Bridge BV
- New South B.V
- Noonan Services Group (NI) Ltd
- Noonan Topco Ltd
- NWK Loyalty Programme Trust (The)
- Pamstad (Pty) Ltd
- Peo Capital (Pty) Ltd
- Personnel Hygiene Services Ltd
- PHS Bidco Ltd
- PHS Compliance Ltd
- PHS Group Ltd
- PHS Holdings Ltd
- PHS Hygiene Pty Ltd
- PHS Investments Ltd
- phs Serkonten SAU
- PHS Services Ltd
- PHS Washrooms Ltd
- PHS Western Ltd
- Pick n Pay Stores Ltd
- PikWik Nigeria Ltd
- PnS Retail Solutions (Namibia) (Pty) Ltd
- Premier Companhia Industrial Da Matola SA
- Premjee Cash and Carry (Pty) Ltd
- Promexs Ltd
- Reivilo Veemark (Pty) Ltd
- Resource Support Services (IOM) Ltd
- Retail Group (Pty) Ltd
- S M C Brands (Swaziland) (Pty) Ltd
- Seebeck 133 Ltd
- Shoprite Foundation
- Shoprite Holdings Ltd
- SMC Brands Botswana (Pty) Ltd
- SMC Brands Lesotho (Pty) Ltd
- SMC Brands Namibia (Pty) Ltd
- Smithshine Distribution (Pty) Ltd
- Smithshine Enterprises (Pty) Ltd
- Sociedade de Assistencia a Agricultura e Industria S.A.
- SPAR Group Ltd (The)
- Steers Properties (Pty) Ltd
- Strait Access Technologies Holdings (Pty) Ltd
- Subtropico Ltd
- Swift Livestock (Pty) Ltd
- Takbro Services (Pty) Ltd
- Teacrate Ltd
- Teacrate Rentals Ltd
- Thuthuka Nathi Ventures (Pty) Ltd
- Tiger Brands (Nigeria) Ltd
- Tiger Consumer Brands Mozambique Ltda
- Tiger Consumer Kenya Ltd
- Timerfruit BV
- Twobil La Famille (Pty) Ltd
- Unitrade Management Services (Pty) Ltd
- USSL Ltd
- Vleissentraal Eiendomme (Pty) Ltd
- Vleissentraal Kaap (Pty) Ltd
- Vleissentraal Namibia (Pty) Ltd
- Warmbad Veemark (RF) (Pty) Ltd
- Whitakers Agencies Lesotho (Pty) Ltd
- Woolworths (Pty) Ltd
- Wutow Trading (Pty) Ltd
- Zire Fuels (Pty) Ltd
- Zire Technology (Pty) Ltd
Methodology
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