The largest retailers in South Africa and in the world
As retailers in South Africa look to support the economy through turbulent times, five of the country’s top retailers feature in global professional services firm Deloitte’s ranking of the 250 biggest retail groups in the world. Pre-scandal Steinhoff is the highest on the list, while Shoprite and Spar also feature.
Few sectors offer reliability at the moment in the South African economy. Although the country is the second richest in Africa behind only Nigeria, and is endowed with economically promising demographic trends, the last few years have represented a slump in economic growth, resulting from a severe dip in global oil prices in 2015.
Most sectors of the economy have been struggling since, including the ever-lucrative mining industry, which has suffered from a plummeting of prices and a spike in costs. However, amid this struggle, one sector that appears to be on the mend is the retail sector, which had its own mini-crisis in 2016, but has since recovered strongly with growth of almost 5% annually.
Now, a report from Big Four accounting and advisory firm Deloitte has revealed the primary drivers of growth in the sector. The report, which ranked the 250 biggest retailers in the world, featured five of South Africa’s major retail groups.
Top 5 retailers in South Africa
The highest-ranking South African retailer on the list was Steinhoff International at 68th on the global list. The firm was founded by Bruno Steinhoff in 1964 in the town of Stellenbosch in South Africa. Today, Steinhoff International operates in 31 countries, and recorded retail revenues of nearly $13.6 billion in 2016. In 2017, the firm went on an expansion drive, acquiring five firms, including Mattress Firm in the US and Poundland in the UK.
However, since Deloitte conducted its research, the firm has been shrouded in scandal, as sustained irregularities were found in the firm’s accounts for the last few years, forcing the resignation of its CEO and causing an 80% collapse in its shares. Steinhoff’s ranking may, therefore, be affected in retrospect.
The second-highest South African retailer on the list was Shoprite at 94th, with operations stretching across 15 countries, and retail revenues of just over $10 billion in 2016. The firm was founded four decades ago in 1979, and has since grown to employ 144,000 people across its international operations. Alongside the Johannesburg stock exchange, Shoprite also has secondary listings on the Namibian as well as the Zambian stock exchanges.
The SPAR Group of South Africa was next on the list, at 156th, operating across 11 countries and closing fiscal 2016 with just over $6 billion in revenues. The group began operations in 1963, when eight wholesalers were handed exclusive rights to the SPAR brand, which they utilised to supply 500 small retailers. The group now works out of six distribution centres and supplies to more than 1000 SPAR stores across South Africa.
In fourth for the South African list, and 156th in the global ranking is Pick n Pay Stores, with seven countries of operation and revenues of nearly $5.5 billion in 2016. Founded in Cape Town in 1967, the firm now employs approximately 50,000 people worldwide, and stretches across the African continent with operations in Botswana, Mozambique, Zambia, Namibia, and others.
Woolworths of South Africa rounded out the South African presence on the list, with operations in 14 countries and revenues just short of $5 billion. The Cape-Town-based retailer, which was founded as early as 1931, has achieved an impressive compounded annual growth rate of 18.9% since 2011.
Global leaders
Meanwhile, the list of leading retailers across the world had some predictable names on it, with Wal-Mart Stores leading by an enormous margin, followed by another US-based retailer, Costco, in second.
With operations stretched across 29 countries, Wal-Mart generated revenues of $485 billion in 2016. The firm is headquartered in Arkansas in the US, where it was founded in 1962, and has 11,703 stores across the world, with 2.3 million global employees and 1.4 million in the US alone.
Costco Wholesale Corporation, which ranked second, is operational in 10 countries across the world, and generated revenues of $118 billion in 2016; less than a fourth of Wal-Mart’s turnover. The firm was founded in Washington in 1976, and employs 231,000 people across the world.
Another US-based firm, namely The Kroger Company, followed in third. The firm operates solely in the United States, and generated revenues of $115 billion in in 2016. In fourth across the world was the German retail company Schwarz Group, operating in 27 countries and ending 2016 with just short of $100 billion.
Walgreens Boots Alliance of the United States followed in fifth, with a presence in ten countries and revenues of $97 billion. Meanwhile, renowned online retailer Amazon.com missed the top 5 by a single spot, ranking sixth with revenues of just below $95 billion and a presence in 14 countries.
