A 47-week trading update from SPAR, and it could be better: turnover from continuing operations through August increased by +4.1%, affected by fluctuations in exchange rates and inflation. Sales at SPAR Southern Africa grew by +3.5%, with liquor sales shooting the lights out at +10.5%. The pharmaceutical wholesale business S Buys grew turnover +14.9%, driven by increased loyalty and growth in the Scriptwise specialised pharmacy unit. The BWG Group in Ireland and Southwest England increased combined turnover by +2.6% in euro terms and +7% in rand terms – which suggests that the business benefited from exchange rate fluctuations rather than otherwise. In Switzerland, turnover declined by -5.8% in francs, but grew +0.8% in ZARs; SPAR in its own words “Continues to assess” that business and “how it is positioned in the market to ensure it optimises returns.” The disposal of the money-losing Polish business continues, as does the stabilisation of the ERP implementation at the KZN DC.

Comment: SPAR seems like a complex and widely distributed business right now. A return to the basics might be in order.

The average price of bread in 2024 is anywhere between R15 and R20 a loaf. How, then – and more to the point, why – does Shoprite sell half a million 600g loaves of brown bread every week at R5 each? In part, it’s to fulfil Shoprite’s R5 promise covering bread, deli meals and sanitary pads. But underpinning it is a 45-year-old commitment to provide shoppers with access to essential goods and services at the lowest prices, even in the most challenging economic times. “While it certainly has not always been easy to stick to our low-price promise over the years, it remains the foundation of our business,” notes Ilze Bylos, chief marketing officer for the Shoprite Group. This is why more than 15,000 products are surveyed every week to ensure customers pay the lowest prices and that promotions remain relevant. This steely-eyed focus on what the business stands for extends to other areas like corporate social responsibility, with Shoprite Mobile Soup Kitchens serving over 150,000 free meals every week, and 250 Shoprite-supported community food gardens helping combat food insecurity amongst the most vulnerable.

Comment: A simple, compelling and widely understood proposition.

Some ingenious bits of brand-building from other retailers this week, in the absence of harder news. For example, 20 Woolies stores across the country are offering punters a 20% discount voucher on a new pair of REdenim jeans in exchange for their worn denim garments, which will be donated to a group of grassroots seamstresses for upcycling into bags, toys, cushions and more. Next, turning a marketing junket into liquid retail gold this week is Massmart, which has launched its exclusive Jack Daniels Privé Single Barrel Select 2024 Collection of three distinctive whiskeys. It has been uniquely crafted for Makro customers, produced in consultation with Makro Spirits Buyer and bearer of an ironic surname Kristin Dry, following her visit to the Jack Daniels Distillery in Lynchburg, Tennessee earlier this year. Win, win. Finally, a check-in from Choppies, which having fled these shores some years ago is doing just fine on home turf in Botswana, where revenue grew +13.6% for the year through June, in Namibia (+39.1% ) and in Zambia (+14.9%). Not so great in Zimbabwe though, with foot traffic down -30%. Overall revenue was up +31.8%.

Comment: Our neighbouring markets are tricky, with some rewards for the canny and persistent.

“What’s up with grocery retail in the world’s biggest market?” you ask, and Coresight’s ‘Market Navigator: US Grocery Retailing’ report is here to tell you. The report reveals that the $1.5tn US retail grocery market will expand by just +1.1% this year, down from +3.9% in 2023, a year characterised by markedly higher inflation after the triple whammy of COVID, the supply chain crunch and shameless price-gouging by retailers and suppliers alike. Big winners? 73% of in-store shoppers bought groceries from Walmart in the past 12 months, and 59% of online shoppers did the same. 41% bought groceries online via Amazon. General trends? Major mass merchandisers, discount or dollar stores and warehouse clubs grew market share from 18.4% to 19.4%, while traditional supers dropped food from 69.7% to 66% of the market.

Comment: What can we extrapolate for our own market? There may be room for a more obvious hard-discount model aimed at the middle of the market. And the likes of Makro should position themselves more in the Walmart or Costco bracket than they are currently doing.

A check-in this week with The Beverage Company, BevCo, local distributor of PepsiCo products and manufacturer of Coo-ee, JiVE, Refreshhh, and Super C energy beverages. It’s hatching plans to have its brands in 30% of spaza shops within three years, as the informal sector flexes its buying power and importance as a market for major brands after an ongoing run of positive coverage. BevCo’s catchily titled “route to market expansion project” would see the business partnering with The Brand & Beverage Company (TBBC) to send forth a battalion of 100 dedicated sales representatives focused on reaching thousands of spaza shops in key regions such as KwaZulu-Natal, the Eastern Cape and the Western Cape. These cohorts will distribute product, coolers, brand collateral, and skills development alike until the job is done. “As the informal market continues to grow, outpacing even modern trade, it becomes increasingly clear that this sector holds immense potential not only for economic development but also for job creation and community upliftment,” says CEO Pieter Spies.

Comment: Good to see the informal sector being taken seriously. But my, it’s getting busy out there…

Cadbury is on a modest but meaningful mission to bring unity to the Beloved Country through its new Real Mzansi Names campaign, which aims to encourage South Africans to connect with their fellow countryman by learning how to properly pronounce each other’s first names. Collaborating with the business is Dr Yanga Majola, a world-renowned Linguistics Professor at the University of Tshwane. The campaign is, as you would expect, driven by social media, a sea in which South Africans swim with particular ease, and may be found under the #realmzansinames hashtag. Next, big up to Rhodes Food Group on the sleek new packaging of its 100% fruit juice range; a business increasingly at play in the big leagues. Moving abroad now, Johnson & Johnson subsidiary Red River Talc has filed for bankruptcy as the business seeks a $10bn settlement on tens of thousands of lawsuits alleging that the company’s baby powder and other talc products caused cancer. The bankruptcy in question is a legal tactic by which a subsidiary is formed and then dissolved as a means of bringing various groupings of plaintiffs under one more easily managed settlement.

Comment: The law is an ass. Sometimes a deeply cynical and tortuously cunning one.

Telling it like it is this week: the dear old South African Reserve Bank, which in its ‘Payments Study Report’ notes that 87% of South Africans use cash most often as a payment method, regardless of what they buy. Only 15% use cardless payments and 8% use credit cards although debit card payments are widespread at 75%. In addition, cash accounts for 56% of the number of payments across all categories. And while cash dominates, there are now 4,000 fewer ATMs around the country than there were four years ago – potentially leading to a fiscal crunch for a large percentage of the population, since the venerable but still convenient machines account for 55% of South Africa’s cash withdrawals. On the upside, ATM withdrawals have become more affordable, with some major banks no longer charging their clients a Saswitch network fee, at a saving for Standard Bank customers, for example, of R245m in penalty fees in 2023. 

Comment: Cash will be with us for a while longer. Businesses which make it easier for customers to access and use cash will continue to draw traffic.