A brief look this week at the challenges of corralling your franchisees and ensuring they do the right thing. While most franchisees of the big retail brands are stand-up citizens just out to make an honest crust, there’s always the odd bad apple and so it proved this week with an OK Minimark store in Claremont, Cape Town, raided by worthies from the Department of Employment and Labour for “brazenly” – their word, not ours – selling expired food items, of nature and provenance unspecified. Never a business to back away from the hard conversations, Shoprite noted that it had reminded the franchisee in question “of their responsibility to monitor stock expiry dates and to ensure any expired stock is promptly removed from shelves and disposed of in accordance with regulations”. The raid was conducted as part of a new year crackdown by the department in the hospitality, wholesale and retail sectors to enforce compliance with health and safety standards and national minimum wage regulations.

Comment: Good work by Shoprite to mitigate and minimise the damage to their brand, while also attending to the well-being of their shoppers.

SPAR’s mishandled SAP rollout in KZN cost the company in excess of R1.6bn, and saw three directors who had ignored a whistleblower heads-up about it leaving the business. But that is in the past: today, service levels are currently up over 90%, with loyalty rates in KZN rising from 68.6% in the second quarter of 2024 to 70.9% in the fourth. “Significant progress has been made in resolving SAP integration issues, including improving visibility of pricing and subsidies for buyers, as well as addressing warehouse management inefficiencies that increased labour and transport costs through the selection of a new warehouse management system,” says SPAR. The retailer has since embarked on a programme to design, build and deploy a SAP template for use across the South African business.

Comment: A botched rollout but a bang-up job fixing the mess and communicating solutions clearly and regularly to stakeholders.

Checkers’ Sixty60 delivery platform has proven a formidable instrument in the drive to market share, with average wait times now down to 33 minutes. “We do the last five kilometres really efficiently. We can do it faster and more affordably than normal online retailers,” explains Shoprite’s chief of strategy and innovation Neil Schreuder, who points to an extensive store network as the secret weapon in reaching punters all over the country: 80% of South Africans live within five kilometres of one of their supermarkets. Sticking with things done well, the Massmart Wholesale division is prioritising food safety at a time when this is becoming the focus of consumers and government departments alike. “Product safety is a key priority of ours throughout our supply chain, and three key areas of focus for us are in our supplier network, our in-store processes, and our pest control measures,” says VP Peter Mamabolo. Moving on, in a partnership with the Southern African Foundation for the Conservation of Coastal Birds (Sanccob), Pick n Pay has thrown its marketing weight behind the survival of the highly-endangered African Penguin, with a colouring campaign for young shoppers. The iconic birds could be extinct in the wild as early as this year, due in major part to competition from fisheries which go after the smaller fish they depend on.

Comment: The business of business is not saving penguins (or driving them extinct, for that matter). But every little bit helps.

In a classic case of causation vs correlation, two recent research papers have shown that despite saving shoppers money – an average of $3,100 per annum per household for regular customers – the arrival of a Walmart in a community makes it poorer. The studies say that in the 10 years after a Walmart Supercenter opened in a particular community, the average household in that community experienced a 6% drop in annual income – equivalent to about $5,000 a year – compared with households that didn’t have a Walmart open near them. Low-income, young, and less-educated workers suffered the largest losses. One possible reason offered is that the arrival of a Walmart has knock-on effects for a local economy, with shoppers changing their habits, workers switching jobs, competitors changing their strategies, manufacturers altering their output, and one supposes the Walmart in question demanding considerations from suppliers that may end up putting the squeeze on their people.

Comment: Low prices are the bait. The broader impact across a community’s economy is the hook.

2025 could be the year when thirsty investors finally get the chance to down some tasty Coca-Cola Beverages Africa (CCBA) stock on the JSE, according to some analysts. Take, for example, Chris Logan, CIO and owner of Opportune Investments. “I think the GNU has created a very favourable backdrop and hopefully Coca-Cola will take the plunge on its IPO,” he says, but sounds a note of caution. “As we have seen in the recent rand weakness, things can change quickly, so best to not delay in this rapidly changing environment.” The business first hinted at an IPO back in 2021, but has apparently been waiting (haven’t we all) for market conditions to improve sufficiently to justify the move. Last year, Bloomberg reported that Coca-Cola would list the African bottling business this year on the JSE and in Amsterdam, looking for a valuation northward of $8bn. Also in 2024, CCBA hired Sunil Gupta (no relation) as its new CEO, and he promised to play a critical role in listing the business.

Comment: Punters flushed with the excitement of the Boxer listing will surely be looking to have a little flutter on this IPO.

In the United States, Coca-Cola has presented the first-ever special Presidential Commemorative Inaugural Diet Coke bottle to Donald Trump, who prizes such trinkets, as he prepares to take his second presidential term. An early feature of the second Trump administration is the loyalty it seems to demand – and receive – from powerful business leaders. Moving on, attracting the ire of consumers this week is Unilever, currently facing a boycott for its perceived pro-Israel stance in the predominantly Muslim country of Indonesia, where its market share declined to 34.9% in the third quarter of last year from 38.5% a year previously, to the benefit of smaller local manufacturers. It’s not just politics, though, it’s also economics: Indonesia’s middle class shrank between 2019-2024 due to layoffs and lower job opportunities, and this has sent shoppers looking for lower prices than Unilever is comfortable providing.

Comment: The intersection between politics and the performance of our own great industry is becoming broader, and busier.

Another month, another excellent economic update from the analysts at Trade Intelligence – who since we opened our doors some twenty years ago have prided themselves on providing the most comprehensive summary of critical economic data available anywhere. Here’s a sampling: real retail trade sales growth for Oct 2024 was reported at +6.3% YoY, after +1.1% for Sep 2024 – the highest growth in over two years. Once again, it was supported by growth from general dealers (+11.5%), with food specialists at only +0.2% YoY and retailers in textiles and clothing: +3.1%. Inflation for Sep 2024 came through at only +2.9% YoY due to deflation on transport (caused by fuel prices being lower than last year). This bodes well for further interest rate cuts over 2025 – although cuts will be data dependent. Consumer confidence for Q4/2024 was reported at -6, ticking up slightly from Q3/2024 at -5. This is the highest fourth quarter CCI since 2018, though still in the red (where it has been for over five years).

Comment: For more indicators, and greater detail, access the full report and a free summary right here.