It's surprising to see Pick 'n Pay, SA's largest food retailer, missing from the table (Top Five General Retailers, Food & Drug Retailers). It has the largest turnover in the food retailing sector as well as the largest market capitalisation of any retail company, but it comes in only at number six in the retailers' net profit league.
Massmart performed well in 2003, defying gravity in many ways, as it was affected by deflation in many of the products that it sells, notably in the fields of electronic goods and appliances. If it can prevent more of its stores from burning down, it should be able to turn in another excellent set of results this year.
JD Group, flushed with success after its acquisition of Profurn, went from strength to strength last year. Other than some final touches to integrate IT systems, the absorption of Profurn into the enlarged JD Group occurred relatively easily. JD's past experience in absorbing Rusfurn more than 10 years ago obviously helped.
Shoprite had a reasonable 2003 but was beset by foreign exchange problems. These have unwound in the interim results to December 2003. Headline EPS, excluding the forex differences, were up 45%. The group now operates 709 stores outside SA. These stores had great interim turnover, increasing by 28% in local currency terms, but income dropped slightly when expressed in rand. Operationally, Shoprite continues to be a solid performer.
Woolworths is the enigma of the retail sector. Its foods operation continues to impress but its clothing division never quite seems to get it right. The Australian venture, Country Road, remains a dismal performer and it is debatable whether it will remain in the group.
Metro Cash & Carry managed another set of good results and appeared to be back on its upward growth path. But the share price didn't follow, languishing for most of the year. Institutional shareholders seemed wary of management after the SA Revenue Service debacle a few years ago. It was announced recently that a consortium would buy out the African and SA parts of the business, leaving the holding company with Metcash Australia as its main asset. The likelihood is that this, too, will be sold off and Metcash will eventually be delisted.
