Inside the great Shoprite meltdown
The loss of Whitey Basson and other key executives worsened the problems created by a weak local economy
Look closely at the trading update released by Shoprite and you can make out signs of the Steinhoff scars. Admittedly this does involve a process akin to deciphering an obscure ancient language, but that’s trading updates for you. The less information provided, the more intense the scrutiny. And this time the seismic shock to investor sentiment warrants some pretty close scrutiny. The stunned reaction to news that SA’s largest food retailer is set to announce a drop of as much as 36% in first-half earnings was an indication that we’re dealing with a national institution. Inevitably it sparked nervous speculation about the end of an era. A 36% collapse was not just an icon faltering; this smacked of a pedestal collapsing. On the day, Shoprite’s share price fell 14% to R153 — its largest single-day fall since 1999. A full verdict will only be possible in a few weeks, when the interim results are released. Meanwhile, investors are scratching through the obscure language of the trading ...
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