A trading update from SPAR for the 24 weeks to 15 March, and not too shabby, all things considered. Group turnover increased +8.8% while the wholesale business grew +5.7% over the period, with grocery weaker than expected at +5.0%, and TOPS at SPAR liquor and the pharmacy business achieving +12.8% and +17.7% growth respectively. Build it was up +1.1%, a pleasing return to growth after a period of industry contraction. Abroad, the BWG Group in Ireland and Southwest England grew turnover +6.6% in euros (+16.9% in rands), with operations impacted by inflation, high interest rates and a +12.4% increase in the minimum Irish wage. Switzerland, not so hot in the face of cost-of-living pressures, declined -4.7% in Swiss francs (but +8.8% in rands). The wholesale operating model, which delivered margin of only 1.3% in FY2023 in South Africa compared with almost 6% at Shoprite and Woolies, is expected to get back to the 3% level in FY2025.

Comment: Once Poland is fully dispensed with and the SAP implementation recedes into memory, SPAR looks set for a proper return to growth.

Pick n Pay reports that its Smart Shopper loyalty programme members are increasingly spending their points on airtime and data. Since the relaunch of the Smart Shopper app last October, with its seamless points-to-airtime/data conversion feature, there has been a notable surge in redemptions, and over R1m worth of points has been switched for these important commodities. Recent insights from the 2023/4 Truth and BrandMapp Loyalty Whitepaper bear this trend out, revealing that 58% of customers from households earning less than R10,000 per month prefer airtime and data benefits to other rewards. Next, a nice little bonus for the Saltzman family, founders of Dis-Chem, the value of whose remaining 35% stake in the business grew a whopping R398.7m in March as investors flocked to the share, taking its market cap to $1.5bn. Dis-Chem has grown from a literal mom-and-pop shop under the Saltzmans to a national behemoth, with 300 pharmacies and counting in operation.

Comment: In a highly consolidated and competitive sector, the rise of Dis-Chem as a player is a remarkable achievement.

In very good news for Actual People, Amazon has decided to drop its much-trumpeted experiment in cashier-less stores. Well, not drop exactly. The camera-driven store of the future allowed shoppers to breeze in and out, without a care in the world, and receive a receipt later through their Amazon account. It will be replaced by a smart cart system, that will still allow them to skip the checkout line but also see their spending and savings in real-time as they shop – something they have reportedly said they want. Amazon has over 20 of the Amazon Go frankenstores all over the US, and trades from several formats, including the more traditional although cavernous and unwelcoming Amazon Fresh, but has yet to find a model that works, grocery retail not being something one can just pick up on a whim. It has closed several Fresh and Go stores, and will be opening new stores only selectively in the most promising neighbourhoods.

Comment: We had occasion to visit a cashier-less Whole Foods not so long ago, and the thousands and thousands of tiny cameras frankly creeped us out.

Easter may be behind us, but the price of chocolate will continue to rise as growing conditions in West Africa worsen. Cocoa prices have tripled over the past 12 months due to disease in Ghana and Côte d’Ivoire, an unfavourable El Niño season, mismanagement, and the pressure placed on traditional cocoa-growing regions by illegal mining operations. It’s estimated that almost 600,000 hectares of Ghana’s 1.38 million hectares have been infected with swollen shoot, a virus that will inevitably kill all of these trees, which are nevertheless still producing beans. Cocoa production in West Africa is run by a handful of large companies who pay small farmers poorly for their crop, which means they can’t invest in soil and crop health and climate change resilience. Price surges and shortages over Easter saw manufacturers like Hershey and Mondelez upping promotions and marketing more non-chocolate Easter treats like cookies ‘n cream bunnies to keep sales up. Locally, shoppers hit by the increased prices of Easter treats – a standard Lindt Bunny cost more than R100 this year – were trading down or doing without to make ends meet.

Comment: Chocolate today, but what crop might be next? Rice? Maize?

The Nampak Group has announced plans to sell its liquid cartons business in South Africa for R450m en route to settling the R5.2bn debt burden under which it has been staggering since its ill-fated expansion into the rest of Africa. The business raised R1bn last year in an oversubscribed rights offer and will also sell its interests in Nampak Zambia and Nampak Malawi to a consortium represented by Corvest 15 and Dlondlobala Capital. Next up, Adcock Ingram Critical Care (AICC) is expanding its reach in ostomy and advanced wound care through a sales, marketing and distribution agreement with medical products and technologies company Convatec, covering South Africa and neighbouring countries. Finally, congrats to L'Oréal’s iconic Dark and Lovely brand which has announced the launch of Stimulating Hair Serum, the latest addition to the Dark and Lovely Pro Collection. This new offering completes the range and sets a new standard in premium formulations, packaging, and pricing, catering to the needs of the African consumer.

Comment: Contraction, expansion, extension. Just three of the ways it takes for a business to get by these days.

Word from our colleagues at NIQ, née Nielsen (which nobody knew how to spell) is that South African consumers have had it up to here. 44% of us feel we are in a worse financial position than we were last year, with 82% blaming increased costs of living, up from 76% a year ago, and 62% blaming the economic slowdown, up from 57%. Upside: only 27% blame ongoing COVID-19 disruptions and setbacks for their financial situation, down from 45% last year. Downside: 50% of us are worried about job security, versus 43% last year. Major downside: almost all of us – literally 99% – have changed the way we buy groceries in response to our woes, commonly downgrading from premium to mainstream or value products, with 48% switching to lower-priced options, 46% closely monitoring the overall cost of their basket, and 39% buying whatever’s on promotion to save. All of this according NIQ’s “Consumer Outlook 2024”, which captures the mindset and sentiment of consumers around the world.

Comment: Some stark and inarguable numbers. Look out for our own research into some of these topics, out next month.