Edcon has maintained its lead in the retail sector for the second successive year, though competition from old rival Foschini and newer entrant Lewis Group is hotting up.
Edcon's major advantage over its rivals is in its equity ownership, helped substantially by its broad-based BEE staff share scheme.
It's been in operation since July 2005 and the first dividends were paid to participating employees at the beginning of last year. Though Edcon will soon be delisted as a result of its private equity buyout, the staff share scheme will be replicated in unlisted form. With an ownership score of 16,7%, it's way ahead of its competition. Employment equity and management are two other areas where it enjoys a clear lead.
Foschini moved up a notch because last year's number two - LA Group - has since delisted from the JSE. Its score isn't markedly different from last year but the composition is. It did well on skills development and preferential procurement. Its ownership score, while low, is the second-highest in the sector after Edcon. And from what management says in its 2006 annual report, it looks like the company is determined to make even greater strides in all areas of broad-based BEE in the coming year. With Edcon likely to drop out of the survey when it delists, Foschini looks set to assume the leading position.
The Lewis Group is a newcomer to the top three BEE companies in the sector.
It initiated a five-year employment equity plan in 2000, and t he targets for 2005 have been met. Its biggest scores were in preferential procurement and enterprise development.
Pick 'n Pay's rating - at number 10 - seems harsh. It's done a lot in employment equity, but the skills development score of zero and preferential procurement score of almost zero are hard to fathom. The company has worked tirelessly in both arenas for many years and these low scores appear unjustified.
