Chief executive’s review - South African Retailing

Our South African business has continued to make progress against a background of increasing unemployment and fierce price competition.

Sales were up 2% as the result of very effective merchandising and pricing strategies, while operating profit in Rand grew by 25%. The management team was also successful in improving the operating margin by over 4% through careful control of bad debt and the expansion of their financial services offer. A credit scoring system developed by Experian is enabling pre-approved credit offers to be given to selected customers.

A further ten new Best Electric stores are scheduled for the current year and a new store image programme is to be rolled out across Lewis stores.