Notable underperformers for the year to date have been The Lewis Group and The Spar Group. Full year results revealed a 35.8% (further) contraction in the Lewis Group’s earnings over the period. The Spar Group’s interim results were subdued with the group losing some market share in South Africa and a pre-tax loss in it’s Swiss operations amidst a deflationary consumer environment, although the Ireland business remained the silver lining, proving resilient in a constrained consumer environment.
Shoprite and Richemont are the notable outperformers for the year thus far. Shoprite’s share price saw an initially euphoric reaction to news that the potential merger with Steinhoff’s African assets had been called off. The proposed merger had been perceived by investors to prejudice minority shareholders and lack transparency for investors. Shoprite is also leading the local food retail pack, having posted double digit sales growth (full year results ending December 2016) in its South African operations, as well as achieving solid revenue growth in the rest of Africa and in areas where a number of other SA companies have failed (i.e. Nigeria).
Richemont FY17 results saw sales contract by 4% over the period, however investors appeared encouraged by the groups return to growth in the USA and a much improved performance in mainland China and Korea, which are considered the real potential future catalysts of growth for the company.