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Transcript:
Nerina Visser: We’ve had a very good look at Woolworths since they brought out their trading statement last week and we are very impressed with many of the changes they’ve implemented and the new strategic direction they seem to be taking. Woolworths has two very strong offerings on the food and on the apparel side. On the apparel side they certainly came out top of the pops of the apparel retailers - they really seem to be getting their offering right, they also managed quite big changes in their sourcing having brought in an expert formerly from Tesco in the UK who changed their sourcing strategy around from a domestic sourcing strategy to sourcing a lot from South East Asia so obviously the strong rand helped them. It might be a bit of a worrying sign in terms of the rand going forward - but there’s a lot of other benefits from this like the bulk discounts that they get and better volumes procuring this way - so for us a very positive find on the apparel side. On the food side we see a very strong recovery coming through obviously on the back of the lower inflation that we see there - and as the consumer recovers we see them trading back up into the higher branded stuff that Woolworths offers so Woolworths is my stock pick.

Erika van der Merwe: There’s quite a few retailers in the sector - what would your second choice in the retail group be?

Nerina Visser: Probably second would be Shoprite also on the food side. They fared very well and we do like their expansion strategy into Africa. .

Broker:
Nerina Visser, Nedbank Capital

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