Woolworths just isn't worth it anymore
There's a gap in the market for any retailer brave enough to step up to the plate.
When I first moved to South Africa, shopping at Woolworths was something to aspire to, especially for a constantly hungry student in need of a break from canteen food.
Somehow, Woolies still has that image, but I'd suggest it's vastly misplaced. How many times have you trawled through its aisles, shopping trolley at the ready, only to find that this bastion of retail is out of everything? Out of tsatziki, out of sweet corn, out of croissants, out of low-fat convenience meals, out of your favourite muesli, out of chicken sausages, out of good sparkling wine. This list could go on.
In fact, the other day I noticed for the first time that in its canned section, Woolies was stocking Koo products. I quite like Koo, but it's not Woolies and I was there to buy Woolies products. It's become so annoying and depressing to walk past empty shelves with big signs proclaiming "Great value!" (thinking 'free fresh air is great value?') that I'm taking my trade elsewhere, and you've got to wonder how many other South Africans are doing the same thing.
Stock the shelves
Spar, Pick 'n Pay, I don't really care as long as they have the items on their shelves that I need to buy. But what does it say about the retail sector in South Africa? It says that Woolies' shares are not a good bet. If this company can't stock the plethora of stores it opened with great fanfare, then its overhead costs are going to eat into any profit made. Add an economic downturn into the mix and Woolies' earnings are in trouble.
It also says there's a huge gap in the market for any retailer brave enough to step up to the plate. For those of us working long hours, we want to be able to stop off and buy a healthy dinner on our way home. We want conveniently located stores with fresh food on offer at reasonable prices. How hard can that be?
For those of us working long hours, we want to be able to stop off and buy a healthy dinner on our way home.Ren'ee Bonorchis, editor at large, Business Day
Spar is getting there and not only do these stores stay open late, but you can buy a Lotto ticket and cigarettes at the same time, and then pop into the video shop next door. Pick 'n Pay has started a few small convenience food stores, but I've still never seen one - I think they're hidden among the fake Tuscan villas of the north. I don't think Shoprite will ever go the convenience store route, but its business plan of catering to the masses is working just fine.
But here we have a country where more people are becoming economically active every day. More people are working till all hours and more people need convenience shopping. And yet, where are our Tescos? Where are our Sainsburys? Where are our Wal-Marts?
South Africa's retail sector, particularly Woolworths, is lagging despite the glut of money that people are willing to spend on making life just that little bit easier. Despite all of this, the good news is that most retail stocks are expected to do well this year. People still have to eat and falling interest rates will increase spending. But are our retailers really catering to the public? I don't think so and it's deeply disappointing that Woolies, the one that came the closest, is now falling back from the race.
* Ren'ee Bonorchis is Business Day's editor at large.