Serial Pick n Pay CEO Sean Summers has thoughts about the store of the future, which, he avers, is going to be smaller rather than larger (see Makro’s take on this here). This on the demise of the direct-to-store delivery model, which demanded that 40% of floor space be reserved for stock dropped off by suppliers. Centralised distribution has put paid to this approach, freeing up space. The rise of home delivery – particularly for bulky items like toilet paper – will free up more square meterage. So what, then, are stores for? There will be more emphasis on specialist areas like bakeries, fish shops, cheese bars, and delicatessens. “You have to be on your game in these areas,” says Mr S. “That is ultimately where the art of retail will be. It is about having good coffee and baristas and good quality food to consume in the stores.” He points to the flagship On Nicol store as an avatar of what’s to come.

Comment: Shoppertainment, or the ‘art of retail’ as coined by Summers, has long been a must-have for stores in affluent areas. It’s going to be interesting to see what else Pick n Pay will do to differentiate itself from competitors.

So – honestly without much fanfare – Amazon is here. The online retail and Global Government-in-Waiting launched on Monday, and while some users report surprises and glitches – smoking accessories categorised under health and household, no products listed under pet food, Lego listed under Home and Kitchen – it seems otherwise to have gone smoothly. The business is offering same-day delivery in certain locations on a wide range of items fulfilled by Amazon itself, with free delivery on orders over R500 and order tracking on WhatsApp. And to sweeten the initial deal and get punters signed up, they’re offering a tidy discount on the first order placed. To deal with some of South Africa’s geo-social complexities, Amazon has over 3,000 pickup points, mostly serviced by startup, Pargo, which has a network of click-and-collect locations across the Beloved Country. Many of these points are in small, remote towns and townships. In a clever response, Takealot launched its ‘Amaz’ng Deals’ promotion this week too, which it has no doubt been itching to release upon the e-commerce giant’s arrival on our shores.

Comment: Amazon is clearly not letting good be the enemy of complete market domination here.

A side hustle for SPAR this week as it lists on the hip and young A2X Markets stock exchange, in addition to its primary listing on the fusty old JSE. “This secondary listing will allow investors to have easy access to our stock at very low transaction costs,” explains CEO Angelo Swartz. “The listing through the A2X secondary-listing platform will also come with improved liquidity and narrower spreads”. Next, the brand’s overseas troubles notwithstanding, Clicks, is going all in on The Body Shop, with the launch of its latest Workshop store at Nicolway in Bryanston, where proponents of harm-free beauty can sample 100% vegan products and more. “The Nicolway store opening signifies our commitment to the South African market, but most importantly, ongoing dialogues and mobilisation for change,” says brand manager Refilwe Mashego. Finally, congrats to Shoprite, which won big at the 2024 International Loyalty Awards held at a gala event in Dubai for its Xtra Savings rewards programme, awarded the ‘Best Rewards Programme in Africa’, and for Xtra Savings Plus, which received the award for ‘Best Loyalty Launch or Initiative’ globally for the new unlimited delivery offer.

Comment: Never a dull moment in SA retail, but in the best kind of way.

In major US news, which may have implications for local businesses like Clicks and Dis-Chem, Walmart is closing all 51 of its Walmart Health clinics, and discontinuing its telehealth operations, on the back of rising operating costs and the apparent difficulty of getting reimbursed by the increasingly rapacious medical insurance system. Pharmacy chain Walgreens (no relation) has recently shuttered 160 of its own VillageMD primary-care clinics, having lost around $5.8bn of value in that business, suggesting an issue with the model itself. More encouragingly, rival CVS, although closing 25 MinuteClinics in Southern California, will continue its Oak Street Health primary-care clinic operations, adding another 50-60 locations this year. Unrelated, over in Europe, McKinseybelieves there are “signs of hope” going into 2024 for the previously despondent grocery sector. In its recently published State of Grocery Europe 2024 it notes just how challenging 2023 was, with grocery sales across the continent growing +8.6% in 2023 against food price inflation of +12.8%. When adjusted for inflation, however, real grocery sales declined during the year and were 4.5% below 2019 levels as real wages decreased and shoppers traded down. While pressure on margins, costs, and prices remains worrying for CEOs, they are less pessimistic about the future than they have been though, thanks to signs of economic recovery, wage increases and returning consumer confidence.

Comment: Interesting news from Walmart. It is of course to be hoped that this is a local phenomenon endemic to the criminally dysfunctional healthcare industry in the US.

A check-in with Libstar, owner of such brands as Lancewood cheese and Finlar Fine Foods, a supplier of chicken and meat products to the likes of McDonald’s, County Fair and Woolies. As already reported in these pages, Libstar is busy simplifying its portfolio from seven categories into two super-categories to optimise its offering. In the fourth quarter of last year, for example, it completed its consolidation of the Cape Herb & Spice and Khoisan Gourmet’s sales, marketing, human resources and administrative functions, and is looking to finalise its consolidation of the Montagu Foods, Dickon Hall Foods, Cecil Vinegar and Retailer Brands business units before the first half of this one is up. Plans are also moving ahead for the disposal of its household & personal care segment. Now the business is also looking at a major expansion into new export markets, including the United Arab Emirates (UAE), Saudi Arabia, and the rest of Africa, armed with the halaal and kosher certifications necessary for exposure to some of these markets.

Comment: A sound strategy, with implementation well underway. Businesses like these will emerge from South Africa’s current travails much strengthened and fit for growth.

Big news from Coca-Cola Beverages Africa (CCBA) this week: the South African bottler of the world’s most iconic beverage is reportedly considering listing on both the Johannesburg and Amsterdam stock exchanges next year, according to certain industry insiders, and may seek a valuation of more than $8bn for the business. Coca-Cola owns 66.5% of CCBA, with the rest owned by Gutsche Family Investments. Next, in an ambit that seems unusually favourable for poultry producers, Astral Foods has let it be known that it expects earnings per share (EPS) to increase between +465% and +475% for the interim period through March (i.e. between 913 and 930c per share versus 162c the same time last year), after a prior trading statement posted a more reserved expectation of +300%. The share price jumped a sprightly 6.73% accordingly. Finally: geopolitics. Clover products will no longer be halaal certified by August, as the Muslim Judicial Council Halaal Trust withdraws the certification. Clover is owned by Milco, a consortium headed by Israeli beverage firm Central Bottling Company.

Comment: The current conflict in Palestine has had massive global repercussions, across every sector from education to commerce.

It’s not often that we report on individual companies in this section. But the news this week that Shell will be partially divesting from South Africa after a 120-year run is so huge that it seems like a bellwether for how things are going economically. Not so fast, say cooler macroeconomic heads. While it is true that the South African economy has been in better shape – indeed, it has hardly been worse – Shell isn’t doing so well either. Yes, Shell is involved in an ugly dispute over the valuation of the stake of local partner Thebe, who wishes to exit the deal. And that the Shell/BP collab in Durban’s Sapref facility hasn’t produced petrol for two years, in part because the government hasn’t managed yet to bring into play new rules to reduce sulphur emissions. But at the same time, as electric vehicles inexorably find their way onto the roads of the world’s major economies, Shell is flatlining and needs to scale back in places where trading is difficult. But let’s not forget that it is only exiting its forecourt retail business – of 600 service stations nationwide – and will be holding on to its upstream assets, i.e. oil and gas exploration and extraction.

Comment: The big question for our sector is what happens to the Shell Select franchisees? Watch this space. And for those playing in the forecourt game, look out for our new Forecourt Report, hot off the press early next week.