
THIS ISSUE: 22 Sep - 29 Sep
Welcome to a short week and a shortish Tatler. A roundup of Shoprite’s latest tech, great initiatives from SPAR globally and in Europe, some grim numbers from Astral, and our suppliers continue to innovate furiously even in the face of a dispiriting decline in retail trade sales for the month of July. Enjoy the read.
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Shoprite Rise of the machines Part XXIV
What exactly, you ask, is Shoprite doing to integrate the latest tech into its operations? That’s a tall ask for 175-odd words, but we’ll try. First up, it’s using smart tags and advanced RFID in its UNIQ clothing stores so that punters can easily scan and pay for items. This also enables the business to maintain accurate stock levels, reduce overstocking or understocking, and enhance supply chain efficiency. Next, in its supermarkets, it’s deployed a powerful end-to-end supply chain software solution that uses machine learning and AI to ensure highly accurate orders, considering a number of external factors when ordering ultra-fresh products and using historical data to predict buying patterns of certain products. Moving on, it’s also using machine learning to define optimal delivery regions, overlaying a map with the spatial-temporal view of orders and using order data to determine the optimal delivery area for each store. Finally, it’s using tech to integrate the front-end Sixty60 experience with the back-end operations of actual supermarkets.
Comment: Question is, what is your business doing to keep up?
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In Brief The Doctor is in the house
Big up to Clicks for taking – four times in a row now – the Coolest Specialist Health & Beauty Store category in the Sunday Times GenNext Awards. Clicks ClubCard was also ranked as one of the Top 5 Coolest Loyalty Programmes. “By appealing to this market with affordable, quality products and services, Clicks is able to position itself as a trendy and innovative brand,” says Head of Marketing Dr Mel van Rooy. Next up, Pick n Pay has completely revamped its fresh offering, from bakery to butchery, with a special focus on the braai. This after testing the waters in its Spring Survey, which found that 62% of South Africans consider themselves adventurous cooks, and 48% cite locally sourced ingredients as essential. Finally, more congrats are in order, this time for the Boardwalk Mall in Summerstrand, Nelson Mandela Bay Metro, Gqeberha, Eastern Cape, which recently won the refurbishment/expansion category of the SACSC Retail Design & Development Awards (RDDA).
Comment: More reason, if any were needed, to visit that bright, breezy and utterly charming metro by the sea.
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International Retailers SPARring partners
To Ukraine first, where SPAR is keeping the home fires burning by supporting local producers through a competition that highlights the support the company offers entrepreneurs, including training and expert advice about developing locally produced products suitable for the retailer’s store network. The initiative gives entrepreneurs a chance to introduce products into the formal supermarket sector, while accessing professional guidance about launching and maintaining a successful brand. The objective is to increase the diversity of locally produced goods available to shoppers. Keeping with the Jolly Green One, SPAR International has expanded its partnership with food-waste reduction tech outfit Whywaste with the introduction of Smart Markdowns – a dynamic discounting system that leverages real-time data and AI-powered insights to dynamically adjust prices on products nearing their expiration date, driving sales and reducing waste. Finally, keeping it green, SPAR Austria will be running its fleet off biofuels, an intermediate step en route to the objective of powering its logistic operations with renewable energy sources by 2050.
Comment: A nimble business whose flexible operating model allows innovation all over the map.
MANUFACTURERS AND SERVICE PROVIDERS
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Heritage Day Braai the time you read this
While you lot were enjoying your time around the fire with families and watching our national team lose narrowly to a similarly gifted side, we and our mates at research outfit Chirp were hard at work surveying you about your Heritage Day traditions and preferences, and this is the result: 72% of you said you associated the occasion with braaivleis or shisanyama, and a surprising 48% said steamed bread, with tripe coming in at 46%, chakalaka at 42%, and samp and beans at 40%. A braai with family and friends (75%) was your gathering of choice; if you were hosting, 53% of you would ask your mates to bring some dops and 46% a salad. 38% planned to shop for your braai meat at Pick n Pay, 26% at Checkers, 25% at your secret butcher and 22% at Food Lover’s Market. 58% of you expected that you would spend more than you did last year, 100% of those with lang tande. 46% of you said you would buy something special to wear, be it a sari, an ibheshu, or an ultra-teal Bok jersey, and an encouraging 51% of you expressed the desire to buy local for your food and drink requirements. And 92% expressed heart approval for public holidays in general.
Comment: Although this particular one occupies a special place in all of our hearts.
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Astral Foods Scratching for margin
Just as we were reporting on some glimmers of hope for the poultry sector, Astral comes along and bursts our bubble with reports that production has been severely curtailed by load shedding and the worst bird flu outbreak the country has ever experienced. This in a trading statement that it expects to record a significant headline loss in its forthcoming results, with costs of R741m for the six months through Mar 2023, stemming from diesel for generators, the cutback in poultry production, higher feed costs due to older broilers, and additional overtime payments. And load shedding is likely to cost the business R1.9bn for the full year. Regarding the birdflu outbreak, beyond the lost production, the business has incurred costs relating to the safe disposal of the birds, and measures taken to prevent the spread of the disease – stripping another R220m off the bottom line.
Comment: The variables impacting this industry are complex and powerful. A tricky business.
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In Brief Where’s the beef?
New last week from Simba, just in time for Heritage Day, was the new braai-inspired Steakhouse Beef variant. “With this new flavour, Simba continues to revolutionise taste sensations by embracing cultural traditions to craft unique flavour experiences says Giulia lorio-Ndlovu, Senior Snacks Marketing Director at PepsiCo South Africa which owns the venerable and beloved brand. Next up, a brand refresh and new positioning for Albany Breads, 50 years old this year. The concept is a bread that reflects the reality of people’s lives “rather than the unrealistic expectations of perfectionism in society reflected through communications and overall representation of people, life, and bread,” says Zayd Abrahams, Chief Marketing and Strategy Officer, Tiger Brands. Albany is the largest of Tiger’s “Billion Rand brands” and the market leader in the bread category. Finally, Mondelez International has released its ‘2022 Snacking Made Right Report: Energy’ report, a bit of a mouthful, but… snacks. Targets include driving down energy-related emissions, improving energy efficiency, increasing our use of renewable electricity, recovering heat from biscuits ovens, converting from fossil fuels to biogas, and reducing emissions in logistics, along with a lot more national and regional ambitions.
Comment: Chips, bread and other snacks. Sounds like this weekend’s menu is sorted.
TRADE ENVIRONMENT
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Retail Trade Sales The shrouded tills
The latest retail trade sales numbers are in from the beard-tuggers and brow-furrowers over at StatsSA, and – not good, declining by -1.8% year-on-year in July, and down for the quarter to the tune of -2.2%. The guilty parties were general dealers, down -4.1%, and retailers in hardware, paint and glass, down -6.8%. In fact, the only positive contribution came from retailers in textiles, clothing, footwear and leather goods in this unusually cold winter, up +6.8%. Our own great industry, as measured in the food, beverages and tobacco in specialised stores category, saw a decline of -2.3% for the month, while pharmaceuticals and medical goods, cosmetics and toiletries were down -3.1%. The Bureau of Economic Research (BER) noted that retail sales could improve in the upcoming quarters if inflation remains stable and interest rates do not go up. “However, as long as load-shedding persists, it will continue to dampen consumer spending in the sector,” the BER said.
Comment: A chill economic wind continues to blow across the vlakte.