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A victory of sorts for Shoprite in the now decades-long fight over exclusive lease agreements in South Africa’s malls. In 2019, you will recall, the Competition Commission’s Grocery Retail Market Inquiry (GRMI) released a report stating that exclusivity lease agreements were prevalent, anti-competitive, and harmful to shoppers and smaller retailers. Shoprite was the first of SA’s big retailers to voluntarily consent to exiting such agreements, subject to certain conditions. The business was given until December 2024 to come into compliance, rival Pick n Pay was allowed until 2026 because it does not enjoy Shoprite’s footprint. Moreover, Pick n Pay was given free rein to expand into non-urban areas which were then dominated by Shoprite, while Shoprite was curbed from expanding in urban locales. While most of Shoprite’s conditions have been dismissed by the Competition Tribunal, that august body has ruled that the Big Red One be given the same amount of time as Pick n Pay to observe the initial ruling.

Comment: In these days of load shedding and disrupted supply chains, this fight seems almost quaint now.

Chairman Ackerman the Younger – Gareth of that proud line – has been an elder statesman since he grew his first grey hair, commenting more on the economy and politics than the aspects of running a large grocery retailer. And so, it was at this week’s AGM when he weighed in on a number of issues of concern to business.
On affirmative action: “The Act tries to force on business by decree an outcome that most large corporates are already doing their best to achieve.”
On the new provision for race-based water rights: “This could ruin or close many of our farms and undermine the value of all existing farms, thus also creating a banking crisis.”
On the new partnership between government and business: “There is reason to believe that some of the most urgent challenges in energy, logistics and safety and security can be more rapidly turned around.”
On the resolution of our current energy crisis: “The consequences (of independent power projects) will ripple through the economy for years to come.”

Comment: A strong and balanced voice, offering warnings and hope alike.

The SENS announcement of the acquisition by Choppies of the Kamoso Group in Botswana is something of a head-scratcher, even for our astute and witty friends over at The Finance Ghost. But as far as they – and we – can tell, the reason for the deal was to get a liquor licence for their Botswana retail operations. Moving on, big up to SPAR, which has sponsored SA’s Netball Proteas for over a quarter of a century. The Proteas are ranked fifth as they go into the World Cup – to be held in Cape Town at the end of the month – and have hopes of a podium. Finally, the tech mavens over at Mybroadband have done a basket comparison of sorts across ten items at Takealot, Game, and Makro and found that despite Massmart’s best efforts to dominate the online space, Takealot offers the best prices to SA’s gadget-hungry punters. However, while Takealot offered better value on Samsung’s Q60B 85-inch QLED 4K TV, the Galaxy Z Flip 4, and the 7ℓ Milex Steam Air Fryer, for example, you could save a grand by getting your Xbox Series X at Game rather.

Comment: A highly contested space where, it seems, there is still value to be had by shopping around.

A big buy for Carrefour this week – its first major domestic purchase in 20 years – as it acquires the assets of the Cora and Match retail brands in France from Belgian retailer Louis Delhaize Group. The transaction, worth €1.05bn, includes the purchase of the real estate of 55 hypermarkets and 77 supermarkets, and gives Carrefour strong presence in Eastern and Northern France, where it has hitherto enjoyed negligible market share. To Brazil, now, where the Brazilian Association of Supermarkets (ABRAS) has announced plans to launch a nationwide shopping app in the second half of 2023.The as-yet-unnamed app will mediate between shoppers and some 94,000 stores associated with 27 state supermarket entities, which will be able to sell through the platform. The overarching aim of the initiative is to allow small players from the sector access to digital tools to help them compete in the digital landscape.

Comment: A model for something similar on these shores? Anyone?

In the US, Nestlé is leading the way in greening up its supply chain, most recently by investing in support for regenerative agricultural practices on the farms that supply wheat for its popular DiGiorno pizza brand. The initiative will see over 100,000 acres of farmland brought under practices which improve soil health and fertility, use less water, energy and fertiliser, enhance biodiversity and help reduce the impacts of climate change. Currently, nearly two-thirds of Nestlé’s emissions come from sourcing ingredients; the business is aiming at net-zero emissions by 2050. To get there, it’s intending to source 20% of its key ingredients through regenerative agricultural methods by 2025 and 50% by 2030. “At Nestlé our aim is to help leave the world better than we found it, and as the world’s largest food and beverage company, we have a tremendous opportunity to help create a regenerative, healthy food system while also working with the local farming communities that employ it,” says Steve Presley, CEO of Nestlé Zone North America.

Comment: We’ve always enjoyed a little bit of the green stuff on our pizzas, normally in the form of rocket. But hats off to Nestlé on this idea.

Parmalat has been ordered to amend its yoghurt packaging after an extremely details-oriented consumer established that each small tub of low-fat yoghurt contains around half a teaspoon of real fruit pieces rather than the abundance depicted. This is a move which if used as precedent could have quite ludicrous ramifications for the entire food manufacturing sector. Overseas now, where Heineken, Unilever, Philip Morris and Mondelez are among the businesses accused by Yale researchers of breaking their promise to close their operations in Russia while its invasion of Ukraine continues. Heineken, for example, still has seven breweries and 1,800 employees in the country. For its part, Heineken says that it has stopped selling the Heineken brand beer in Russia and found a prospective buyer for its business on those shores. Unilever has said that exiting the country is “not straightforward” without handing the assets to the government or hurting employees there.

Comment: The pressure on companies to be good corporate citizens is mounting. And often hard to reconcile with the bottom line.

According to Bankserv, South African salaries have grown +22.8% to an average of R15,438 over the past five years, all well and good. But the CPI, which measures our cost of living, has risen +26.6% over the same period, you do the maths. And additionally, real take home pay, which considers other variables like escalating fuel prices, a weaker currency, and elevated interest rates, fell to R13,416 per month in May. If you listen to the Bureau of Economic Research (BER), better-than-expected load shedding in June is driving economic activity for the second quarter of the year, which you would think would be good news. But it’s likely to bring an uptick in inflation, and hence another 25-basis point increase by the Reserve Bank later this month.

Comment: Bottom line, tough times prevail. Although better times may be ahead.