Like a surprisingly attractive butterfly emerging from an underwhelming chrysalis, the SPAR results have followed last week’s profit warning, and yes, while on paper the numbers are not great – a -47% decline in operating profit – they’re not as bad as they seemed at first glance, with a +10.1% increase in wholesale turnover. And even the grimmer aspects are not as bad as they first appeared – for example, the R2.7bn hit to the KZN operation’s turnover from a shaky SAP implementation was mitigated somewhat to R1.6bn by the good graces of the other regions, which stepped in to supply the necessary to stranded KZN stores. The core grocery business pulled its weight this round, delivering wholesale growth of +7.1%, even as TOPS wholesale logged a minor decline (-0.1%) and Build it wholesale had its largest decline in living memory (-4.3%). “This result reflects some of the tough decisions the Group has had to make to reposition itself as a stronger organisation, for the benefit of all SPAR’s stakeholders,” said CEO Angelo Swartz to assembled pundits. “I believe that we are at a strategic inflection point. We need to strike a balance between centralised control and decentralised decision making.”

Comment: In times like this, the margins for error – and SAP rollout overruns – are slimmer. But better times are hoped for SPAR.

At the Tatler, we do not typically cover minor variations in the weather. Nor do we report much on the crime rate. This is a mistake: crime and its causes are not an environmental variable about which we cannot do much. Nor do we have to accept it, indefinitely, in our businesses and our lives. So, the news that Shoprite over the last three years has successfully secured through the courts over 1,700 years of prison time – including 24 life sentences – for criminals who have impacted its operations is welcome, if unfortunate. In 2018, Shoprite established a command centre from which a team of investigators, data and crime analysts and law experts use technology, artificial intelligence and an intelligence network to monitor the Group’s large range of business assets, including stores, trucks, and trailers. The centre shares info with the SAPS and NPA to secure prosecutions and ensure that bail is also successfully opposed. Shoprite also employs an expert criminal lawyer to help with the prosecution of criminals, while data and crime analysts testify during sentencing.

Comment: It’s a shame that retailers are forced to deploy substantial teams to keep crime in check, when such resources and efforts could be used to the benefit of other business areas.

Shoprite has announced its top suppliers of 2023, with Unilever taking honours in the grocery department, Coca-Cola in snacking and beverages, Lactalis in perishables and AMKA products in personal care. The Faircape Group took the sustainability award, while Stephan & Seuns Boerdery claimed fruit and veg. And receiving the first ever Grand Prix, Tiger Brands for its exceptional overall performance and impact on the Group’s operations. Moving on, a minor brouhaha at the Woolies AGM over executive pay, with 53% of punters voting against the remuneration policy and 26% against the remuneration implementation report, fairly modest opposition, say some, considering the R122m CEO Roy Bagattini has bagged this year (nearly twice that of rival Shoprite CEO Pieter Engelbrecht). Finally, some anecdotal reportage from Massmart on their Black Friday performance: deals on essentials like soft drinks, toilet paper, pantry items, and milk were predictably popular, but so were deals on big ticket items like TVs, fridges, and air conditioners.

Comment: We’ll keep you updated as those numbers start to come in. But in the meantime, read our findings on the event here.

What’s up with SPAR in Uzbekistan, you ask, and we’re here to tell you that the global franchise giant is opening shop in that Central Asian economy through a licencing deal with Korzinka, Uzbekistan’s largest retailer. Korzinka will enjoy new access to international expertise, advanced technologies, stringent international standards and industry knowledge, as well as SPAR’s proprietary approach to local supplier development. Next, to North America, where Canadian chain T&T Supermarkets is opening its first US store, a 76,000 square foot super in Seattle. It won’t stop there though – the Asian-specialty super has hired Whole Foods veteran Chris Pine (not that one) as head of real estate. Finally, Tesco has enjoyed a stormer of a year in the UK, with the share price climbing +23% this twelvemonth past. And now they’re flogging their banking division, with nibbles from the likes of Barclays and Lloyds.

Comment: There are still new markets to explore, it seems, and gaps in markets that appear consolidated. Interesting times.

We’ve said it before and we’ll say it again – the poultry sector is a tough one to navigate, perhaps the toughest within our greater FMCG industry. This week’s case in point: Quantum Foods, which posted a R35m loss in the year through September, after South Africa’s worst bird flu outbreak decimated its chicken flock and power cuts somehow got worse. This after reporting a R37m profit in 2022. The business was forced to write off assets like layer hens and breeding stock worth R155m as a result of the outbreak, incurring further costs from feed and eggs that had to be destroyed. It also spent R52m on diesel to keep the lights on, and another R35m on more generators.

Comment: Load shedding is the perennial straw just before the one that broke the camel’s back – heightening the stress on businesses before other variables like bird flu, climate change, and COVID kick in.

Kudos this week to Carling Black Label for the launch of its #NoExcuse 2023 campaign to tackle gender-based violence. The theme of the 2023 campaign revolves around the statistic that every 63 seconds, a woman in South Africa becomes a victim of abuse. Through the campaign, Black Label will encourage men to take part in the Champions for Change course, a programme designed to provide practical tools for personal growth and the cultivation of healthy relationships. Black Label will also integrate the #NoExcuse campaign into the Carling Knockout Cup tournament, in partnership with the PSL. Next up, The Association of Meat Importers and Exporters of Southern Africa (AMIE) is warning shoppers of significantly higher poultry prices through the festive season and into the new year due to ongoing poultry shortages caused by the bird flu outbreak, and the lack of government action to address the issues around the introduction of a rebate on import tariffs.

Comment: Timely stuff from Black Label going into the festive season, when instances of abuse tend to increase.

BankServ Afrika is an organisation nobody pays much mind to until such time as there is an urgent need to know what South African shoppers are spending on. A time such as now, almost two weeks after Black Friday, with the holiday season bearing down on us like a tinsel-bedecked locomotive. Bankserv, you will recall, provides payment clearing services to banks, and has the best available handle on credit card transactions. Over to you, then Bankserv: “In-store shopping was slightly down from last year’s levels compared to online, which delivered again as merchants upped their Black Friday promotions and attracted interest from eager consumers,” says head of stakeholder engagements Shergeran Naidoo. Bankserv Africa’s online card authentication service recorded a Black Friday total of 1.4 million transactions to the value of R1.39bn, a +29% value improvement on 2022. In-store transactions totalled 5.9 million, with a value of R3.1bn, a decline of -21% YoY from 2022

Comment: For further granularity, have a look at this excellent article from Trade Intelligence research.