The World Bank, which is satisfied with the progress that the DRC has made in terms of governance and economic reforms, plans to accelerate its ... financing projects, its vice-president, Hafez Ghanem, tells The Africa Report.
Each month we focus the spotlight on the latest sector or banking region, accompanied by an interactive list of
Africa’s top players drawn from our two annual rankings, the Top 500 Companies and Top 200 Banks in Africa. We’re also highlighting related articles from our free Archive.
month we are focusing on the retail sector, where the South Africans are leading the charge.
Like their cousins in the telecoms and banking industries, South African
retailers have been among the sharpest scouters of the emerging African middle class. There were disappointing sales over the Christmas period at
home, capping off a difficult year but nearly all of the major groups
have plans to expand their African presence.
The recession and subsequent
layoffs in the manufacturing and mining sectors have put customers off
high-end purchases like electronic equipment. Massmart’s Dion Wired and
Game stores have suffered accordingly, dropping 3.7% in like-for-like sales
in the first 21 weeks of their financial year.
A pickup in the economy in
the third quarter of 2009 means that earnings for South African retailers
will most likely stagnate rather than decline radically. No doubt the World Cup finals will be a welcome boost, as the tens of thousands of extra tourists stream through their stores in June and July 2010.
As the inflationary
pressures of food and fuel spikes begin to decline, consumers disposable
income will rise, which should boost the sector overall. The 5.5% reduction
in interest rates will also help. The announcement that the US giant
Walmart, the world s largest retailer, is looking to enter the South
African market signals the maturity and profitability of the sector.
company that appears not to have been feeling the strain is market leader
Pick ‘n Pay, whose turnover for the six months to 31 August 2009 was up
12.3%. Its new strategy appears to be paying off: creating franchise stores
to penetrate lower-income segments of the market, in which Shoprite
traditionally has done better. Where Pick ‘n Pay had 190 of these franchise
branches in South Africa in 2007, by 2009 it had 250.
Present in 13 other
countries on the continent and making almost 10% of sales from its Africa
stores, Massmart has announced the expansion of its store networks in Angola
and the Democratic Republic of Congo – where it will face competition from
big brother Shoprite, present in Luanda since 2003 and in 16 African
countries all together.
The Kenyan market has seen the emergence of its own
strong retail chains, with similar expansionary ideas. Having extended its
branches across the country, Nakumatt has opened a store in Rwanda – open
24 hours a day – and also has a presence in Uganda. It has provoked a
restructuring in agribusiness in both countries, as reliable supply chains
for meat, eggs and other products are created to service the demand.
This knock-on effect – including stimulating fertiliser production and
refocusing small-farm logistics – has been seen in all countries where
large retailers have put down roots, a welcome side-effect for a continent
where agriculture has been neglected. However, in many markets, small
farmers cannot meet the quality-control requirements set by the
supermarkets. This is an area where government intervention has been
successful in other parts of the world.
In North Africa, the sector is
being transformed by high demand, with hypermarkets and big box outlets
being opened at a rapid rate. Global brands are beginning to find a serious
toehold in the region. Morocco’s Groupe ONA, which owns the supermarket
chain Marjane, has followed the government’s policy of investment in
previously neglected areas like the Rif Valley, with some success.
Governments across the Maghreb and Egypt are busy trying to prop up sectors
that are dependent on consumers in the EU as the recession spreads across
the Mediterranean. Nevertheless, jobs in textiles, manufacturing and tourism
are being shed. The knock-on impact is similar to that seen in South Africa,
but given the high correlation between North African economies and Europe,
retailers are likely to feel the pain for some time.
A list of Africa’as biggest retails, taken from our interactive annual list of Africa’s Top 500 companies, published in the February-March 2010 edition of The Africa Report.
Turnover (Thds $)
THE BIDVEST GROUP
PICK’N PAY STORES HOLDINGS
EDGARS CONSOLIDATED STORES
MC CARTHY RETAIL
NEW CLICKS HOLDINGS
MR PRICE GROUP
DIST. & WAREHOUSING NETWORK
SNMVT – MONOPRIX
SOC. IV. DE PROM. DE SUPERMARCHÉS
SEFALANA CASH AND CARRY
2008 RESULTS IN THOUSANDS OF DOLLARS – *IN ITALICS 2007 RESULTS – ND: NO DATA
This article was originally published in the February-March 2010 edition of The Africa Report.
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