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It’s amazing how Woolworths has gone from hero to zero in four short years and the culprit, once again, is that graveyard of South African retailing, Australia. Only one South African retailer, Metcash, has ever managed to get it right consistently and sustainably in that country. Most investors thought it would somehow be different this time, as Woolies CEO Ian Moir did a great job of turning around the fortunes of its Country Road operation in Australia. So when the retail group bought Australian department store operator David Jones a few years ago, the market gave him the benefit of the doubt. The department store concept is, however, dying globally. In a trading update issued mid-July, Woolies estimates that headline earnings per share (Heps) for the year to end-June would decline 15%-20%. As usual, food stood out as the star performer, with comparable sales increasing 4.8% against a background of 3.2% food inflation. In real, comparable terms, food sales therefore rose 1.6%. A...

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