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A profit warning from Woolies, who expects its half-year haul through December to decline by as much as -10%, as Group turnover increased +5.4%, or +4.4% in constant currency terms – less than half the 12.5% reported in the prior period. What gives? Consumers are pulling back on spending on clothes, say Woolies, against a backdrop of broader macroeconomic uncertainty. The energy crisis and the less reported but just as dire logistics debacle have also impacted the retailer’s ability to consistently get the right stuff in front of the right people. “This has negatively impacted footfall, resulting in a greater-than-expected pullback in discretionary spend,” says Woolies. On the upside, the business enjoyed better sales in the last six weeks of the reporting period, with numbers up +7.2% as the effects of Black Friday and the festive season kicked in. Turnover in Food rose +8.4%, while sales at its Fashion, Beauty and Home business grew by +2.2% due in part to summer stock being held up in (or outside) congested ports.

Comment: Another business with a recent run that reveals it is doing nothing wrong. And yet here we are.

How’s Checkers’ Sixty60 home delivery service doing? Who better to ask than Pick n Pay’s Sean Summers, who launched Pick n Pay’s original delivery service during his tenure in the early noughts, but who readily confesses that the current Checkers offering is the more reliable. And if that’s not good enough for you, how about these numbers: In less than 18 months after launch, over 1 million punters downloaded the app, with sales growth of almost +150% in the 2021/22 financial year, and +81.5% in July 2023. As it stands, the app had achieved 3.1 million downloads through March 2023, and expanded service to 466 stores by September. “In our time-pressed society, providing consumers with a swift, on-demand grocery delivery service is like giving them back time: today’s most precious commodity,” says innovation and strategy chief Neil Schreuder.

Comment: : The Shoprite way is to wait until the right time to execute then rapidly put more daylight between their business and the opposition than can ever be fully extinguished.

The Shell Retailer Council (SRC), representing a number of Shell outlets, has approached the Johannesburg High Court to prevent Shell Downstream South Africa from using “draconian” and unfair tactics against its members. Inter alia, the SRC alleges that franchisees are forced to pay “development fees” when Shell “unilaterally” revamps their business premises; refusing to do so brings threats of termination or non-renewal. “The assumptions, estimates, projections and speculations underlying the calculation of the development fee due and payable are highly subjective and unrealistic,” says the SRC, which also alleges that Shell employs threats, harassment, and unfair tactics to force its members to pay debts. The British petroleum giant collects an estimated R388m from 450 South African franchise sites in franchise or royalty income annually.

Comment: A big oil business running roughshod over the little guy, you say? Seems a little farfetched to us.

Clicks’ now venerable but somehow still fresh The Body Shop has announced that it has become the world’s first global beauty brand to achieve 100% vegan product formulations across all ranges, including skincare, body care, haircare, make-up, and fragrance. This in fulfilment of the target it set for itself in 2021 when 60% of its products had already been certified by The Vegan Society, and which has now given its nod to the entire range. “We were the first beauty company to fight against animal testing in cosmetics. We were the first major global beauty brand to use cruelty-free musk in our fragrance and we have now achieved another global first,” correctly observes brand manager for The Body Shop South Africa, Refilwe Mashego. And speaking of planet-enhancing retail practices, by converting 1,000 tons of food waste into animal feed over the past six months, Shoprite is providing enough fodder for up to 3,000 cattle daily as part of its commitment to environmental sustainability and advancing the circular economy. Dried goods such as rice, pasta, maize products, cereal products, flour, chips, snacks and seeds now supplement hominy chop, a byproduct of maize milling, in the Group’s animal feed formula.

Comment: : Further evidence, if more were needed, that sustainability is a priority for SA’s major retailers – and, by extension, for the suppliers who serve them.

What’s up with wine exports, you ask. In fact, they’re down -17% by volume off 2022’s 368 million litres, for a current total of 306 million, although export values have risen a touch to a healthy R10bn. And this in an environment of surplus, which has had a depressing effect on global prices, especially in the lower- and entry-level segments of the market. But the drinkability of our product is helping out. “It is this reputation for top quality wines that seems to be setting South Africa’s wines apart from many of its counterparts and fuelling a positive premium growth trajectory,” explains Siobhan Thompson, CEO of industry body Wines of South Africa (WoSA). On the downside, infrastructure issues – including holdups in the Port of Cape Town – are making it challenging to get our wines to where they’re appreciated.

Comment: Another instance where the excellence of South Africa’s private sector is frustrated by the dishonesty and incompetence of state enterprises, to the disadvantage of every single South African.

Inflation, an indicator at which we haven’t looked for a while, slowed to +5.1% in December, with an average of +6% for 2023. Declining fuel prices were a factor, as was a welcome drop in food inflation, which moderated from +9% to +8.5%. “We expect this moderation path to continue in 2024 for most of the products within the food basket,” says Wandile Sihlobo, chief economist at the Agricultural Business Chamber. The El Niño phenomenon has created generally favourable growing conditions across the Beloved Country, enabling farmers to plant their planned 4.5 million hectares for the 2023/24 season, up +2% YoY. The Reserve Bank, which would prefer CPI to hold steady around the centre of its targeted 3-6% band, held its key repo rate steady at 8.25% and the prime lending rate at 11.75% when it met last week over Koffiehuis and beskuit to deliberate on the issue.

Comment: Some welcome news for South African households, whose disposable income has been steadily eroded by rising prices over the past couple of years.