Company Comment
Some of Shoprite’s issues were a long time in the making
And GPI has a new acting CEO, which turns out not to be that newsworthy after all
So now we all know that former Shoprite CEO Whitey Basson was not only an outstanding retailer he was also pretty good with timing. Two years after handing over the reins to Pieter Engelbrecht, Basson looks to be far enough away from the scene of the worst-ever set of results reported by the group he built from modest beginnings. However, it’s worth considering that some of the factors on the shopping-list of problems that have hit the group are consequences of decisions taken during Basson’s leadership — in particular, the expansion into Africa and the aggressive commitment to capital expenditure, much of which was devoted to developing state-of-the-art distribution facilities. Whether or not a decision is brilliant is often determined by timing. In a year or so, Engelbrecht may look like a hero. Over the coming months analysts will be keen to work out whether Shoprite’s disastrous first-half figures are part of an unavoidable earnings cycle faced by a retailer prepared to make the...
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