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Last week, in a trading update they probably didn’t want to issue, Pick n Pay gave notice that it was expecting a -184% to -204% decline in earnings per share for the six months through August – news which heralded an immediate -13% decline in the share price. This has been attributed to a highly promotional trading environment, which impacted both sales growth and gross margin, and continued headwinds are expected in the latter half of the year. The update also pointed to unexpected costs associated with the restructuring of the business. “It’s common cause that Pick and Pay is not in a good space at the moment, and it’s lost a lot of its momentum,” says returning CEO Sean Summers. “The first order of business is to make sure that we focus on getting sales back in the stores. Focus on the people in the company. And through that, we’ll be able to focus more clearly on our consumers and get the support back into the business. As we go forward, we will start dealing with the other issues in the organisation.”

Comment: Not an ideal time to be building from the ground up. But Pick n Pay brings a long history and a lot of goodwill to the challenge.

Bit of a reload this week for Pick n Pay’s excitingly punctuated asap! delivery app, which now boasts over 25,000 easily searchable products brought to you courtesy of AI search technology and product alternatives, which are chosen upfront in case of any ‘out-of-stocks’. The AI tech enables you – and this is important – to find what you are looking for even when you’ve made a typo. It also offers live order tracking, ensuring an accurate delivery time. And the best part is that incoming CEO Sean Summers will deliver it to your front stoep on his Harley… ok, not really. Perhaps even more exciting, Pick n Pay has launched its first zero-waste supermarket pilot in Cape Town testing a net-zero waste model by diverting food waste to local farmers, composters or waste-to-energy facilities. All edible surplus food is already donated to FoodForward SA, which feeds almost a million people daily through 2,750 beneficiary organisations. The model is predicted to save 600kg of food waste per week from landfills, and 1,500 kilograms of carbon emissions weekly.

Comment: Is the South African consumer clamouring for zero-waste stores? Not yet, but that’s certainly no reason not to do it.

On the back of a R7.7bn payday for shareholders thanks to the disposal of the benighted Australian assets, Woolies has forked over R122m some change to CEO Roy Bagattini for services rendered in FY2023. This princely sum includes a guaranteed salary of R20.4m, short-term annual incentives of R28m, long-term share options that amounted to R66.7m and R7.1m in share dividends. Next, big up to Clicks, which was a finalist in two categories of the 2023 Gender Mainstreaming Awards, where CEO Bertina Engelbrecht won in no fewer than three categories – the RMB Fearless Thinker Award, the Positive Role Model Award, and the Inclusive Leader Award. The awards acknowledge and celebrate meaningful representation of women in mainstream business across Africa. Finally, several of our retailers are taking steps to shore up the supply of poultry products as South Africa experiences its worst ever outbreak of avian influenza. Woolies and Pick n Pay are looking at rationing eggs, while SPAR may import them from other southern African countries as domestic supplies dwindle.

Comment: Desperate times, sensible measures.

Kenya’s vibrant and increasingly tech-savvy informal sector, which runs substantially on the M-Pesa mobile currency, has long been a cause to celebrate among enthusiasts of the FMCG sector. Since the launch of M-Pesa in 2007, the mobile currency has become the preferred way to make payments in Kenya, with 96% of Kenyan households holding an M-Pesa mobile money account. Less well known is how sophisticated modern retail is in East Africa’s gateway, notably in the area of customer experience. Formal retailers offer dedicated butchery, bakery, pet care, pharmacy departments, some private label offerings, e-commerce and innovative marketing at retail, and in the case of a recent pilot by Carrefour, self-service checkout stations. “Retailers are putting in more effort to give customers a better shopping experience in order to retain and maintain customer loyalty and make sure they go back to shop in-store again,” says Eric Kinoti, Senior Managing Partner of the Nineyard Consulting Group. Our very own expert, Kerry Elliot, will be heading to Kenya next week to speak at the Retail Trade Association of Kenya (RETRAK) forum with DataOrbis. Watch this space.

Comment: For more on Kenya’s vibrant retail scene,have a look here. And then order our Kenya Retail Report, which promises to be the first of many as Trade Intelligence expands its reach into new markets.

The Competition Tribunal has questioned the proposed R16m antitrust settlement agreement between the Competition Commission and Unilever, saying the penalty appeared to be “on the low side”. The Tribunal will be ruling on the settlement in some weeks, leaving Unilever on tenterhooks in the case, in which it was investigated for colluding with Malaysian palm oil producer Sime Darby Hudson Knight over the possible division of markets between 2004 and 2013. Moving on, PepsiCo has become embroiled in a quintessentially South African dispute with over 200 striking Simba workers who allege that the company has been deducting money from their salaries each month for transport to and from work; the workers say they are meant to get transport for free as part of an earlier CCMA agreement. Finally, nice work from Nestlé, which has teamed up globally with non-profit Girls With Impact (GWI) to help upskill the next generation of entrepreneurs and to provide access for development opportunities, mentoring and networking. Through the partnership, Nestlé has provided scholarships for over 100 women to participate in GWI’s online ‘mini-MBA’ programme that teaches key entrepreneurship and leadership skills.

Comment: In these days of darkness, there are many, many points of light which shining together might amount to something.

Yoco, supplier of card machines, online payments and invoicing for growing businesses, also offers small businesses financing in the form of fast, flexible cash advances. Thus far it has provided a total of R2bn to over 50,000 merchants, under the support, as it were, of its Yoco Capital division. As it continues to evolve, Yoco Capital is looking for avenues to empower and inspire business owners to foster growth, offering payments, funding, and business management under one roof. Typically, Yoco merchants use capital to buy stock and equipment, and open new locations and in doing so, expand their businesses. “A healthy cash flow starts with clear visibility of your money. By bridging payments and funding, business owners are better able to predict the flow of their money and make better decisions for their business. Merchants have greater control over where their money goes and how they choose to use it,” says capital lead Adam Duxbury.

Comment: As anyone who has attempted to start a business will tell you, capital is hard to come by. A good solution for many enterprises which might not otherwise have access to finance.

The monthly economic update from Trade Intelligence is out, and it’s not all downsides. For example, the Consumer Confidence Index (FNB/BER CCI) rebounded to -16 in the third quarter, after plummeting to -25 in the second. Respondents to the quarterly survey recorded less negative scores for the general economic outlook and the ‘suitability of the present time to buy durable goods’, even as their household financial outlook remained relatively unchanged. A lower inflation rate and the corresponding hold on interest rate increases also helped, as did the ease on load shedding over the August survey period, although water supply issues, the brutal taxi strikes and municipal worker strikes did exercise a drag on attitudes. Real GDP was up +0.6% for the second quarter, although the expected annual rise is likely only +0.7%, with total CPI a pleasing +4.8% in August although food inflation is still running hot at +8%. And as reported last week, retail trade sales were down -1.8% for the month of July.

Comment: The best and most comprehensive document of its kind, a snapshot of which is available for free right here.