THIS ISSUE: 31 Jul - 06 Aug
The Roundup For everything there is a season
We've been running a regular COVID feature in this slot for a while now, and will continue to do so as news presents itself. In the meantime, some other items of news from the retailers. First up, Pick n Pay, which has just launched an online store for its extensive clothing range, kicking off with a summer collection. Next, and we did mention this in passing last week, Woolies have sold for a princely R1.4bn their Bourke Street menswear store in Australia, as a step toward reducing their R4.9bn debt burden in that difficult to crack economy. Aussie acquisition David Jones has relaunched its Mindfully Made hub on its website and in seven stores across the country, showcasing dozens of sustainable fashion, beauty, home and food brands. Back home, Lindt has announced the launch of its Creation chocolate range, which will only be available at Woolworths and Lindt stores. Finally, SPAR Zambia have closed all of their corporate stores in that country.
Comment: A time for gathering and a time for casting away, to paraphrase our man Ecclesiastes, although he probably wasn't talking exclusively about supermarkets.
Shoprite Northern exposure
A trading update this week from Shoprite, which let it be known that despite the current crisis, sales for the year through June were up by +6.4% to around R156.9bn, with sales up by +8.7% here in the Beloved Country after a strong second half performance. While customer visits were down -7.4% during COVID, basket sizes grew +18.4%, more than evening things out. Elsewhere, not so good: sales were down -1.4% in its non-South African supermarkets. The pandemic also added costs, with R327.2m spent on such essentials as security, mobile clinics, PPE, temperature scanners, store and DC sanitation, employee meals, communication costs and remote network access, as well as R116.9m paid to staff including an appreciation bonus to help them through the lockdown. In other news from the Big Red One, Shoprite is thinking of exiting Nigeria after 15 years, and has accordingly started a formal process to consider the potential sale of all or a majority stake in its business in that beyond challenging geography, which has already sent the likes of Woolies and Mr Price packing.
Comment: One of the benefits of a crisis is that it sharpens focus and reveals what is truly important – for businesses and people alike.
SPAR Engendering support
Big news this Women's Month from SPAR, which has partnered with Lifeline to help end gender-based violence by leveraging their extensive store network and media reach to communicate an 'END GBV' message and inform women about the services Lifeline provides to victims. SPAR is also supporting many of the country's care centres through initiatives like the Women's Month 'Make Change Happen', where customers purchase a pair of bracelets for R5, which goes to a regional charity that uplifts women in the area. Centres supported include the Saartjie Baartman Centre for Women and Children in the Western Cape and The Open Door Crisis Centre in KZN. In other SPAR news, the spat with the Giannacopoulos family has come to an end after a judge at the Pietermaritzburg High Court ruled that the family's 41 stores be reinstated into the SPAR Guild. SPAR, as you will recall, had argued that the family's business practices brought the brand into disrepute.
Comment: So that's that then. And big up to SPAR for taking steps towards ending that scourge afflicting the beautiful women of our country.
International Retailers Aldi right people
In the UK, in a rare bit of good news for the embattled sector, Aldi has announced that it will be creating 1,200 new positions as it continues its unchecked expansion across that blessed archipelago, with plans to open a store a week between now and Christmas. In the US, Roman Heini has resigned as chairman of Lidl's operations over there, in order to pursue other interests, which we are given to understand include raffia work and figure skating, and to spend time with his family. He is the latest victim of Lidl's efforts to gain traction in the United States of Walmartlandia. And speaking of Walmart, something it is difficult to avoid doing, the business has apparently laid off hundreds of white collar staff in departments like store planning, logistics, merchandising and real estate, even as it ups its quota of frontline store personnel. Walmart has said the cuts were part of their drive to omni-channel as a business serving punters online as efficiently as they do in real life.
Comment: Seismic stuff in global retail, although the signs are sometimes subtle and hard to read.
Food Safety Peddling influence
Four million South Africans live with diabetes, 42% are hypertensive, and a vast section of the population – 70% of women and 40% of men – is either overweight or obese, according to the Healthy Living Alliance (HEALA). Despite these deleterious numbers, our industry engages in a number of practices to discourage the government from regulating for healthier choices. These, according to a study in the International Journal of Public Health, include lobbying government officials, influencing scientific research, and attempting to refocus policy issues by diverting attention away from the role of unhealthy products which contribute to ill health. The study looked at over 100 examples of practices by ten businesses or entities in our sector, which will remain nameless here so as not to unfairly single them out. "This study reveals the range of tactics that South Africa's food and beverage industry deploys, putting profits before people and undercutting critical public health initiatives," says HELEA's Lawrence Mbalati.
Comment: Strong words. But we are living in a time of transformation, and transforming our views on how we as an industry could contribute to wellbeing is an important agenda item.
Health-e.org.za 03/08/20 Comments 0
Heineken Glass houses
Grim news this week from Heineken, that classy Dutch beer in green bottles with the dashing red star, which as a result of the COVID-19 booze ban has been forced to halt production entirely. It's also called a halt to its plans for a R6bn production facility at the Inyaninga site near eThekwini's Dube TradePort. This is a blow for Heineken, but also for the region, which would have benefitted from 400 new jobs and various contracts related to the plant. Heineken, which brings to market the Heineken, Amstel, Windhoek, Sol, Miller Genuine Draft, Strongbow Cider, Soweto Gold and Tafel brands, has already cut executive salaries by -20%, with no bonuses. Among the many players affected by the prohibition are 34,500 taverns, which contribute an estimated R40-60bn annually to the critical informal economy.
Comment: Again, while nobly motivated, the liquor ban has proved a damaging own goal by Government, and the sooner it is lifted – with the necessary restrictions – the better.
The Citizen 01/08/20 Comments 0
The Economy Surplus to requirements
Who doesn't like a good trade surplus? In happier times, it suggests that we're selling more than we're buying, and that our economy is running at a profit, so to speak. In this instance, the record surplus we recorded in June – of R46.6bn, up from R19.7bn in May – speaks to a weakening demand for imports here at home as battle-weary consumers hunker down and keep their spending to the basics, even as the easing of lockdown restrictions saw exports rise, notably in the precious metals and stones sector. Manufacturing also surprised on the upside – although Absa's Purchasing Manager's Index (PMI), which monitors manufacturing sentiment, declined to 51.2 for the month of July from 53.9 in June, it remained in positive territory for the third straight month after a record decline in May. This suggests that the sector is stabilising after the initial shock from COVID-19.
Comment: Fragile green shoots…
"Maybe 'Okay' will be our 'always'..."