Woolworths Posts 27.3% Profits Rise In FY2012/13
News: South African retailer Woolworths posted a 27.3% year-on-year (y-o-y) increase in profits during FY2012/13, despite the consumer market suffering during the period, Reuters Africa reports. Retail sales rose 23.2% y-o-y during the period to US$3.40bn.Woolworths has hailed the resilience of its customer base, despite the country's industry being in the doldrums, for the significant profit gains. South African retailers are struggling from sluggish sales, as many customers are being more fragile with their spending due to high personal debt, unemployment, rising fuel and transport prices.
BMI View: The South African mass grocery retail sector is characterised by high levels of competition and concentration. The top five retailers account for approximately 75% of total mass grocery retail sales. The industry is dominated by domestic retailers that are familiar with the market and that have their distribution networks in place. This is a particularly unique situation for an emerging market and testament to the strength of the established majors.