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Grocers could hold value in tough times
Analysts warn that 2018 is going to be a challenging year for retailers in general, but they expect food and grocery retailers to hold their value despite a tough macro-economic environment. The 2017 financial year was characterised by sluggish economic growth with weakened consumer spending, a volatile currency, economic downgrades by credit ratings agencies and foreign competitors muscling in on the local market. While retail sales slowed in the period (from October) leading up to the festive season, food and pharmaceutical retailers continued to outperform other retail sectors. The value of local food retail is estimated at R520bn to R550bn a year. The dire macro-economic climate has presented opportunities for cheaper and more affordable food retailers, as more South Africans tighten their belts. Among the big four of Spar, Pick n Pay, Shoprite and Woolworths, the latter has suffered the bloodiest onslaught on its share price, which has tumbled 19.52% so far in 2017. Woolworths’...
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