Replacing a legend
Despite succession rumours, Basson says people should not expect him to retire soon
Some may say Whitey Basson is something of an acquired taste. But like the renowned wines from his home ground of Stellenbosch, Shoprite’s front man is one of the region’s greatest exports — and like fine wine, he gets better with age.
Basson has led Shoprite for just under four decades, growing the business from one with a value of R1m to a retailer with a market capitalisation of R114bn. Based on market dynamics in the early 1980s and 1990s the retailer should never have risen to its current heights.
When Basson and his management team arrived on the scene, it was dominated by Pick n Pay, OK Bazaars and Checkers.
Calculated risks by Basson — which included moves into the rest of Africa when no-one else was expanding north of SA, and absorbing OK Bazaars and Checkers — turned the group into a market powerhouse.
At 70, Basson is long past the conventional retirement age but shows no signs of slowing down or stepping down.
Yet industry pundits have already begun to speculate as to who the next CEO of Shoprite could be.
Damon Buss, an equity analyst at Electus Fund Managers, says expectations and hopes were for an internal successor to Basson.
“We think Pieter Engelbrecht, the chief operating officer, is the best suited and hence most likely internal successor. Given the quality of Shoprite’s management team and their exceptional track record, we would prefer an internal successor,” he says.
Speaking on the sidelines of the group’s presentation for the results for the year ended June, Basson says people should not expect his retirement too soon.
“People think that I do everything and that is not true. I probably will not run at the speed that I used to because the body can’t handle it — 90% of the work is done by the team here, so hopefully I can just be a sounding board for them.”
But one thing is clear, his replacement will have to match his high standards.
The group’s results showed that Shoprite’s full-year profit rose 17%, beating analyst estimates, while headline earnings per share, which exclude onetime items, rose to R9/share in the 53 weeks through June, from R7.69.
Trade Intelligence MD Maryla Masojada says turnover growth on both a 52:53 and a comparable 52:52 week basis was ahead of full-year 2015 growth of 11.2%, despite a slowdown in new store openings. Shoprite has accredited its consistent trading profit of 5.6% to rigorous cost control and more effective operating methods.
“The group’s focus on Africa remains strong, with growth in African stores well ahead of SA stores,” she says.
Masojada says the group’s local operations have continued to feel the pressure of an overcrowded trading arena and tough economic conditions.
“However, under these conditions, Shoprite Group has reported turnover growth of 10.9% from SA supermarkets with positive real like-for-like growth reflecting that Shoprite Group continues to perform well.”
She says the succession debate is ongoing, adding that there is no obvious internal candidate but Basson spends a lot of time with three or four senior managers, and “it could be any one of them”.
While many of the