South Africa's food sector is increasingly mature and competitive and has been negatively affected by low GDP growth, high unemployment and constrained consumer spending. The outbreak of coronavirus has seen a spike in food sales, but the longer-term impact of the crisis may have an adverse effect on food retailers. Rapid store expansion and the ongoing formalisation of the market have resulted in relatively high levels of concentration, and the sector is led by a handful of very large retail companies.
Competition has increased dramatically as the grocery market has matured. The lines between traditional retail and wholesale channels is blurred, and the larger players have substantial procurement, central warehousing, and distribution divisions. The traditional wholesale and fresh produce markets are being eclipsed by the retail trade as larger farmers supply directly to supermarkets and smaller and informal traders make more use of the leading grocery companies for their supply. Supermarkets have expanded into less central areas, local convenience stores, and garage forecourt retailing.
The coronavirus outbreak has had a significant effect on consumer shopping patterns and analysts expect the rising demand for food and essential grocery products to provide a short-term boost to supermarket sales and revenues. While panic buying has subsided, overall demand for food remains elevated. There has also been a massive increase in demand for online shopping services.
This report examines South Africa's wholesale and retail market for food, with a particular focus on the country's large supermarkets. It includes comprehensive information on the state and size of the sector and its major players, and influencing factors including the effect of coronavirus, the rise of online shopping and the increasing importance of technology. There are profiles of 10 companies including the dominant retailers Shoprite, Pick n Pay, Spar and Woolworths, as well as FoodLovers Holdings, fresh produce market agent Subtropico and specialist player Wellness Warehouse.
Key Topics Covered:
2. Description of the Industry 2.1. Industry Value Chain 2.2. Geographic Position
3. Size of the Industry
4. State of the Industry 4.1. Local 4.1.1. Coronavirus 4.1.2. Corporate Actions 4.1.3. Regulations 4.1.4. Enterprise Development and Socio-Economic Development 4.2. Continental 4.3. International
5. Influencing Factors 5.1. Economic Environment 5.2. Input Costs 5.3. Technology, Research and Development (R&D) and Innovation 5.4. Labour 5.5. Environmental Concerns 5.6. Household Food Expenditure 5.7. Consumer Preferences
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