JSE listed companies in the food and drug retail sector: A content analysis of financial statements to determine their primary purpose

Vanessa Gregory,Mihalis Chasomeris

doi:10.4102/jef.v9i3.77

Abstract

The overall purpose of the study is to analyse financial statements to determine the primary purpose of JSE listed companies in the food and drug retail sector. There were two parts to the analyses. First, the study examines the literature on the three models, namely: neoclassical, conscious capitalism and entity maximisation and sustainability in order to identify themes or major identifiers of each model. Second, it analyses the financial statements (over five years from 2010 to 2014) of JSE listed companies in the food and drug retail sector, in particular the non-financial information. The entire population was analysed as there were only four in the population, namely SPAR, Pick n Pay, Shoprite and Clicks. Annual integrated reports and sustainability reports (where separately published) were analysed using content analyses. Keywords and themes were used to link the attributes of the company to the attributes identified in the literature to determine the model the company used. The content analyses showed that the dominant model was the entity maximisation and sustainability model. However, each company appears to have chosen to focus on a different stakeholder: SPAR on employees, Pick n Pay on customers (with a differentiation strategy), Shoprite on customers (with a low cost strategy) and Clicks on shareholders.

Highlights

Over the years there have been varying approaches to running businesses, resulting in many different goals, aims and schools of thought pertaining to what the ultimate goal or purpose of an entity should be
The second one, conscious capitalism (CC), is trending in America at present and differs to neoclassical in that the focus turns from shareholders to all stakeholders and has the business focusing on a higher purpose as opposed to profits (Mackey, 2011)
The last model, entity maximisation and sustainability (EMS), differs slightly to CC in that only part of the focus is maximising entity wealth, the other part of the focus being sustaining the business in the long term (Høgevold, Svensson, Wagner, Petzer, Klopper, Varela, Padin & Ferro, 2014)

Summary

Introduction

Over the years there have been varying approaches to running businesses, resulting in many different goals, aims and schools of thought pertaining to what the ultimate goal or purpose of an entity should be. The purpose of this study is to identify within a South African context (in this instance, the food and drug retail sector as listed on the JSE) which model companies are purporting to follow through an inspection of annual financial reports. The research objectives linked to this purpose include: to examine the literature on the three models (neoclassical, CC and EMS) in order to identify themes or major identifiers of each model, to examine the financial statements (over five years from 2010 to 2014) of JSE listed companies in the food and drug retail sector, in particular the non-financial information, for themes that could link to the identification of any of the three models and to prepare a content analysis based on this examination to draw a conclusion on which model each company in the population appears to be following

Objectives

Methods

Results

Conclusion