Last week we reported on Dis-Chem’s trading update and the retirement of CEO Ivan Saltzman; it behoves us now to report on the full set of results, armed as we are with this excellent summary from our analysts. Pretty solid, as South Africans return post-pandemic to more normal shopping, albeit constrained for all the usual reasons. Turnover was up +7.4% to R32.7bn for the year through Feb, with retail revenue increasing +6.5% to R28.9bn and like-store growth of +3.3%. Dispensary at +15.8% was the big performer, with personal care and beauty growing +7.1% and baby care, including Baby City and Baby Boom up +8.6%. The business opened 13 retail pharmacy stores, increasing market share to 24.6%, in a bid to extend its position as SA’s largest retail pharmacy group, and now has 258 retail pharmacy stores and 54 baby stores. A big focus, now and going forward, is Dis-Chem’s plan to vertically integrate the medical value chain, from insurance to clinics to the dispensary.

Comment: An ambitious business and a bold strategy, well executed under difficult conditions.

Big news for Clicks this week, which has just got the nod from the Competition Commission for the acquisition of selected stores of Sorbet Holdings from Old Mutual Private Equity. These include Sorbet Experience, Sorbet Man, Sorbet Man Woodlands and Candi & Co professional salons. The Group in question is a franchisor of the Sorbet brand, and also sells Sorbet-branded beauty products to Sorbet Independent Salons and the corporately owned Sorbet Salons. Clicks will be designing and developing the Sorbet-branded beauty products, which will be manufactured by a third party, and will also be sold at Clicks Group’s stores and online. Clicks will be forking over R105m for the package.

Comment: A sharp move from a business which seldom puts a foot wrong.

To SPAR, which just six days after having revamped its SPAR Rewards cards, offering shoppers, inter alia, the same discounted price on all promotional products no matter the store they’re shopping in, signed up over a million new members in a week. Additional benefits of the new card include automatic entry into SPAR competitions, a ‘spare’ virtual rewards card on the SPAR SA app, and access to unique education opportunities through Upskillist, a global online education platform offering business courses and more. SPAR Rewards cardholders will be given three months’ free access to study as much and as many courses as they want within the period. Next, Pick n Pay is rewarding its Smart Shopper members with a chance for 17,000 of them to have their shopping trip paid for between now and the middle of June. The Group said that it also aims to give away up to R10m in free groceries over six weeks.

Comment: As the man said, if you want loyalty, get a programme. Especially in these straitened times, when punters will go anywhere for a good price.

In the UK, Tesco is launching a major range review across its entire fresh and packaged food line-up under a new reset programme called Fit for Growth. “This is Tesco looking across the whole store and saying where do we dial things up and where do we have to dial things down,” explains an unnamed source. “It’s going to have pretty huge implications for suppliers. For example, Tesco acknowledged they are big underperformers in meat and fish, so they will be looking to expand and improve that offer.” In Portugal, bleeding edge hi-tech retail specialist Sensei has in partnership with Hewlett Packard Enterprise launched a not-open-to-the-public 500m² Lisbon test store where it will be trailing tech for frictionless shopping. The Dojo store tests new features including gateless entry and exit, and an automatic card payment terminal where purchases are displayed in real-time at the end of a shop. Customers can shop without an app, and while they will interact with real human staff at specialty counters, they’ll be able to take the goods acquired there as they would anything from the shelf.

Comment: Touch free retail is gathering pace. No one is putting that genie back in the bottle. How will our businesses and brands adapt and flourish in the store of the very near future?

A dire set of interims from Astral Foods, South Africa’s biggest chicken producer, for the six months through March: while revenue was up +6% to around R9.9bn, operating profit plummeted a vertiginous -88% to R98m, drawn thither by the price of feed, which was impacted in 2022 by the war in Ukraine and a drought in South America, which produces most of the world’s soy. Throw in declining sales and rising diesel consumption, and despite an +11% cost increase at retail, the numbers start to make sense. Plus, there’s the 7km pipeline to the Vaal River the business is constructing for a cool R100m, on the failure of the municipality of Standerton to guarantee water provision. Finally, there’s the failure of the country’s rail infrastructure, which means everything needs to be transported by road at four times the cost.

Comment: You don’t want to read every set of results as a litany of our still-promising county’s failures. And yet here we are.

Congrats to Danone, which has appointed Tsholofelo Ngobeni as its new head of manufacturing, the first woman to hold this position at the company. An experienced ops leader, she was previously with Coca-Cola Beverages South Africa, Kellogg, and L’Oréal, inter alia. Another big hire this week is Tadeu Marroco, named the new CEO of British American Tobacco (BAT). Currently the FD, he takes over from Jack Bowles who stepped down in mid-May, having led the business into the profitable new world of vapes and other non-combustible products. Next up, Coca-Cola’s Powerade energy drinks brand is launching a new global platform, which counterintuitively celebrates the power of the pause in an active lifestyle. “Pause is Power” partners with sports and fitness talent – including Caster Semenya and Tatjana Schoenmaker – to tell powerful and inspiring stories of the moments when they choose to pause.

Comment: In a market where the brand promise is generally “will give you heart palpitations and freak you out”, that is indeed refreshening.

The hoary sages over at Stats SA, with their scrolls and abacuses, report that South Africa’s retail trade sales decreased -1.6% YoY in March. Chief contributors to the decline were general dealers, where sales declined -1.9% and, sadly, our own great industry, lumped together as retailers in food, beverages and tobacco in specialised stores, where sales dropped a worrying -6.6%. Retailers in textiles, clothing, footwear and leather goods, however, saw an increase of +6.3%. Not unrelated, the Bureau for Economic Research reports that retail confidence dropped to 34% from 42% in the first quarter of 2023. “Consumer sentiment remains lacklustre as the spiralling cost of living erodes disposable incomes,” says Investec analyst Lara Hodes. “The indebted are also having to contend with rising interest rates […] Accordingly, we don’t anticipate a meaningful pick-up in household consumption expenditure.”

Comment: Woeful – although a -6.6% decline in our grocery sector does seem a bit steep.