It would be a "natural development" for international retail group Steinhoff to take over Shoprite, Africa’s biggest supermarket chain, according to retail tycoon Christo Wiese.

Wiese is the largest shareholder in budget store Shoprite as well as lower-end furniture, apparel and household goods retailer Steinhoff. Bringing the two together would allow him to add groceries to his sprawling discount empire.

The merger, if it happens, would pull together Wiese’s retail assets under one roof following Steinhoff’s about $6bn acquisition in 2014 of the magnate’s budget clothing retailer Pepkor. It would also create a global retail giant worth at least R400bn.

"People will speculate about that," he told Reuters in a rare interview at his modest offices overlooking factories in the northern Cape Town industrial suburb of Parow.

"People know that I am 75 years old, and I fortunately have a son who is in business with me, but as a family, we are continually looking at consolidating our business interests.

"So, it would be, in a way, a natural development."

Since Steinhoff’s Pepkor acquisition, some analysts have wondered if Wiese, along with Shoprite CEO Whitey Basson and Steinhoff’s Markus Jooste were working on a tie-up.

Wiese, who describes himself as a "realist, pragmatist", started Pepkor in the 1960s, in Upington on the southern edge of the Kalahari desert, after spotting an opportunity to bring cheaper clothes to the poor.

He then transformed budget chain Shoprite from a six-store company in the 1970s to one with hundreds of stores across Africa, from SA to the Democratic Republic of Congo, dwarfing rivals including Wal-Mart’s South African unit, Massmart.

His discount strategy, which now includes investments in clothes retailer New Look, has catapulted him to the cover of Forbes magazine as one of Africa’s richest businessmen.

"Why is it so successful?.... The people who earn a lot of money are a small portion and then at the base is where your mass market is, where people have limited disposable income and we’re aiming at that market," he said.

Wiese studied law in Stellenbosch, but lives in Clifton, overlooking the Atlantic Ocean. The businessman owns a high-end vineyard near Stellenbosch — it is an area dotted with executive golf clubs, but he said he "finds playing golf boring".

Wiese is also a top shareholder and board member in investment heavyweight Brait, which in 2015 bought gym chain Virgin Active, a relative outlier in his business model as it targets middle-class consumers.

More in line with the low-cost theme was Brait’s purchase of no-frills retailer New Look.

Wiese said Brait’s "most obvious" growth trajectory was through its existing businesses, which include UK supermarket chain Iceland Foods as well as South African maker of staple foods Premier.

"There is plenty of scope [to grow]. It’s got a strong management team and the biggest scope lies within the existing businesses. New Look, for instance, our clothing retail operation in the UK, has identified China as a major growth area," he said.

Wiese said New Look was looking to open 500 stores within three years in China, where it already runs 90 outlets.

"China is an enormous market," Wiese said, describing the New Look store expansion plan as a "drop in the ocean" given the size of the Chinese population.

Virgin Active, which has taken top spot in Italy and whose biggest chain is located in SA, had identified Asia-Pacific as the next growth market thanks to a growing population of health-conscious consumers, he said.

Wiese was optimistic for the outlook for Europe despite gloomy economic forecasts but was cautious about the idea of snapping up cheaper assets in Britain following its June vote to leave the EU.

"Undoubtedly it does offer opportunities, but there are greater risks because none of us know how it [Brexit] is going to play out," he said.

"There are studies that show that by 2040, Britain will have a bigger economy than Germany and a population of more than 80-million people — that’s a market you can’t ignore."

In SA, several businessmen including outspoken CEO of Sibanye Gold Neal Froneman, have called for harried President Jacob Zuma to resign after a series of scandals.

Wiese said that as a businessman rather than a politician, he would like to stay out of politics. However, he said, the country’s leadership was hurting the economy, which is expected to grow less than 1% in 2016.

"It is clear to a blind man that today the top leadership in the government is seen as a problem. It is not helping our economy. That is a fact of life."

But the retail tycoon also dismissed suggestions by some analysts that he was looking to preserve his wealth by moving assets abroad during the current political turbulence that has also drawn in Finance Minister Pravin Gordhan.

On the contrary, he said, he expected business to continue to expand, including interests in SA. Virgin Active, for example, had its head office in London, but earned more than 60% of its earnings before interest, tax, depreciation and amortisation, or core profit, in SA.

"There is no bias to disinvest — in fact the very opposite," he said.

Reuters