As any supplier NAM will tell you, price negotiations with retailers are not for the faint of heart. So much so, in fact, that in its Fresh Produce Market Inquiry, the Competition Commission has taken it upon itself to have a look at whether any feature of the fresh produce value chain impedes, restricts or distorts competition. First fish in the barrel last week was Pick n Pay. Next up, Food Lover’s Market, which might not have the same heft, but with 88 Food Lover’s Market stores (31 of which are franchised), seven Food Lover’s eateries, and 330 FreshStop stores, is a sizeable player in produce. The Group sources around 40% of its produce from markets and 60% from direct suppliers, shifting to 75% in the summer months. And while the negotiations are tough, it says, they’re not inhumanly so. “I don’t get into a situation where somebody is unhappy with what I am paying them,” says fresh division head Vito Polera. “I do get into a situation where I bought a product on the market for a low price. But that gets shifted to the agent. I didn’t push him [the supplier] to that point. He is asking me to get the volume off his floor.” And – although the details are not given – smaller producers do get better payment terms.

Comment: Suppliers will surely welcome a bit of light in the dark places where price negotiations can sometimes go.

More on the competition between Pick n Pay and Checkers in home delivery – a fight which Checkers is currently winning hands down. According to Mybroadband, on a theoretical basket of 10 products, Checkers Sixty60 is beating Pick n Pay asap! at R698.91 versus R782.90. Standouts are Grabouw Thick Boerewors (R89.99 vs R121.99/kg) and an 18-pack of Babysoft 2-ply (R139.99 vs R172.99). Each charge a standard delivery fee of R35, and the prices are generally pretty well-matched, so a small price investment by Pick n Pay could put them on a more competitive standing. Sean Summers seems unafraid to eat humble pie on this one, although he does hint at the failings of his predecessors in getting in the delivery game sooner. This suggests that the always-canny retail legend might well be poised to step things up a notch.

Comment: For more comparisons between the performance and the strategic and operational successes of the major retailers, have a look at our Corporate Retail Comparative Report.

On news this week of the L’Oréal-owned Body Shop filing for bankruptcy in the UK, Clicks has assured the market – and employees – that the business, which Clicks operates under a newly-renewed licence, is safe here. The Body Shop is a staple of the beauty and skincare scene in SA, where it operates 50 stores. Moving on, an interesting appointment by Woolies’ CRG Group this week, where Kay Raidoo has taken over the reins as South African country manager for upmarket apparel and homeware brands Country Road, Witchery, and Trenery. She has recently occupied such positions as head of trade operations and customer experience for Woolworths Fashion, Home, and Beauty, and divisional executive for Woolworths’ KwaZulu-Natal and Eastern Cape division. “As I enter this new role, my vision is to firmly entrench the brands in the hearts and minds of more South Africans,” she says. Finally, nice work from Pick n Pay which has partnered with the University of Pretoria’s Mammal Research Institute Whale Unit to create a reusable bag to raise funds and create awareness about the research on southern right whales. A QR code on the bag enables interested shoppers to track the movements of eleven whales that were tagged just a few months ago in October 2023.

Comment: Relief re. the Body Shop, which is ably and creatively managed by Clicks on these shores.

Major news from Walmart this week is that the Big Feller is in talks to buy smart-TV manufacturer Vizio for a cool $2bn – 30% higher than its market cap. Vizio sells one out of every five televisions bought in the US, is the biggest-selling TV brand in Walmart stores, and also owns an associated software platform business that generates 60% margins and annual advertising revenue growth of +27%, with a captive audience of 18 million active users. This is four-dimensional integration of the supply chain, and a move that gels neatly with Walmart’s new focus on higher margin businesses including Walmart Connect, the retail media advertising business, which allows brands to sell targeted ads to Walmart shoppers on its website and in-store such as on digital displays, connected TVs and radio.

Comment: Data and attention are two of the biggest businesses out there right now. This move will entrench Walmart ever more deeply in both.

Hot on the heels of last week’s news that poultry giant Astral Foods was well on the way to recovery, rival RCL FOODS has let it be known in a trading update that it also expects some fireworks in its forthcoming results, with HEPS, a reliable marker of profitability, up by +30% in the six months through December. This, they say, is despite the impact of last year’s disastrous bird flu outbreak and comes on the back of the “continued execution of the turnaround plan, which drove an improvement in agricultural performance and operating efficiencies, coupled with higher volumes and margins.” It also excludes proceeds from the sale of Vector Logistics, which is now listed as a discontinued operation. The poultry unit has done well, with a new decentralised operating model, and is likely to do better with the introduction of a new breed into the sheds.

Comment: Can poultry sustain this apparent turnaround? RCL’s strategy of diversification and rationalisation seems to suggest a way forward.

Annual results from global consumer products giant Unilever for the year through December: underlying sales (meaning numbers excluding changes due to acquisitions, disposals, and changes in currency) grew +7.0% on volume growth of +0.2%, arguing that the cost-of-living crisis is real, with underlying operating margin increasing to 16.7%, and underlying sales growth of its 30 “Power Brands” up +8.6%. Breaking things down a little, Personal Care, representing 23% of Group turnover, grew +8.9%, while Nutrition grew +7.7%, accounting for 22% of sales. Back home, Tiger Brands has been instructed by the Health Department to relabel its range of five Jungle Oats beverages, which claim the benefits, variously, of “heart wellness”, “digestive well-being”, “brain support”, “immunity support” and “energy boost”. Such claims – whether true or not – are prohibited under Section 9 of the Foodstuffs, Cosmetics and Disinfectants Act.

Comment: Unilever’s results cause one to long for a simpler, better time, when sales and profitability were more closely aligned.

A brand spanking new South African Economic Report is hot off the Trade Intelligence press, and as usual it’s the most comprehensive and readable of its kind out there. But enough about us: those numbers you seek. GDP growth is predicted to hit +0.6% for 2023, with load shedding and transport challenges weighing on performance, and reduced activity in trade – including the wholesale sector and food. Consumer price inflation came in at +5.1% in December last year, after a full six months over +6%. And marginally good news is that 16.8 million people are formally employed in the Beloved Country, almost a million up for the year, and higher than pre-pandemic rates. Sadly, retail trade sales were down to the tune of -0.9% for the month of November as consumer confidence reached its lowest festive season ebb in 20 years.

Comment: Obviously, this is just scratching the surface. For the real lowdown on the dear old South African economy, click here.