trouble on the shop floor
Has Shoprite lost its way after Whitey Basson?
On top of major operational challenges that have made Africa’s biggest grocer break all the wrong records came the company’s announcement that it is to buy back the deferred shares of its chair, Christo Wiese, the celebrated dealmaker who almost dragged the business into a disastrous merger with Steinhoff. Has the empire that Whitey Basson built lost its magic, or is it a case of the new order facing new challenges?
"I’d like to be the person who takes over from me," Shoprite CEO Pieter Engelbrecht tells the FM two days after releasing a record-breaking set of results for the six months to end-December. Unfortunately for Engelbrecht, the records were all the wrong sort. HSBC said it was the weakest top-line performance since 1980; the adjusted trading profit margin was the weakest since 2006; net gearing almost doubled to its highest level in years; and Africa’s largest grocery retailer suffered what must surely be a record-setting R1bn sales knock due to "stock issues". It would have been hard for even the most imaginative of crisis-management consultants to come up with the list of problems behind the truly dismal results. Officially, the four issues highlighted by management were: introduction of an enterprise-wide IT system; industrial action at its largest distribution centre; huge currency devaluation in Angola; and the longest period of stagnant internal inflation in a decade. There was ...