The power of capital allocation: how Shoprite outgrew Pick n Pay
Pick n Pay’s biggest error over the past two decades was prioritising paying high dividends over growth, one analyst says
The diverging fortunes of SA’s leading food retailers Shoprite and Pick n Pay are an illustration of how capital allocation decisions can shape long-term success as these two giants — once considered peers — have taken vastly different paths, with outcomes that speak volumes.
According to the head of research at Old Mutual Wealth Private Clients, Victor Mupunga, in the past two decades Shoprite has stayed ahead of Pick n Pay by consistently reinvesting more of its capital into expanding its distribution network, store footprint, and IT systems, while Pick n Pay prioritised paying high dividends over growth...
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