Exploring the dynamics of macro-economic factors on financial stability of listed grocery stores in developing African economies

This paper aims to investigate the presence and direction of causality between macroeconomic factors and the financial stability of JSE listed grocery stores in selected Southern African countries. Utilizing purposive sampling, a total of four thousand five hundred and ninety grocery outlets across sixteen Southern African Development Community (SADC) countries were identified and categorized into four holding companies because their financial statements were consolidated at the holding company level rather than on a country-by-country or outlet-specific basis. This approach resulted in the inclusion of four listed grocery stores, making a total of hundred and sixteen (4 firms x 29 years) observations spanning the twenty nine-year period. Descriptive and correlation matrix tests were conducted to ascertain the presence and direction of causality between macroeconomic factors and company financial stability, measured by ROA. The descriptive results highlighted a notable growth in the CPI, compared to a lower GDP growth rate during the period under investigation. The correlation tests, revealed no significant relationship between the ROA and GDP, CPI, ER, and IR. In light of the findings and conclusions, the study recommends that grocery stores implement strategies to mitigate macro-economic factors, potentially by actively supporting local businesses such as farmers and manufacturers that could serve as primary suppliers. This approach aims to reduce dependence on costly imports, contributing to enhanced financial stability and sustainability for the listed grocery stores.