That Shoprite trading update you’ve been waiting for then: sales of merchandise from continuing operations (excluding the furniture business, currently up for sale to Pepkor) rose +9.6% to about R128.6 bn for the six months through December. Supermarkets RSA, which contributes about 83.7% of the total, grew sales +10.4%, down from last year’s +14.6% for the same period, but still solid. Checkers and Checkers Hyper were up an even better +13.5% and Sixty60 grew an absolutely stellar +47.1% – although what this contributes to store sales growth is not given. And Shoprite and Usave were a little concerning at only +6.7%, in the general malaise impacting poorer South Africans. The Group opened 248 stores over a 12-month period – 30 of them Shoprites, 28 Usaves, 34 Checkerses, 80 LiquorShops, 53 Petshop Sciences, 11 Checkers Outdoors, 11 UNIQ Clothings, and 1 (one) Little Me, bless it.

Comment: A business hitting all the marks, although the lower end of the shopper base must be of concern.

After the fanfare that preceded the purchase of the first 50%, Walmart’s outright ownership of Massmart has been somewhat low-key, with only the occasional executive appointment or quiet adoption of this back-end system or that dry strategy to suggest that it isn’t all just business as usual. Something a little more exciting this week: Massmart’s Game, Makro and Builders stores will soon be stocking products from Walmart’s own-brand lines, including toys, snacks, baby care products, and bulk cereal. Also on offer will be products from elsewhere on the mother continent, including olive oil from Tanzania, coffee from Kenya, and textiles from Sierra Leone. Sounds nice, but, erm, why? “There are so many great manufacturers in South Africa and the rest of Africa,” explains chief merchandise officer Herman Venter. “We want to create the ability for them to engage with us in a meaningful way to ensure we can negotiate great prices that we can pass on to our customers. That is the primary reason we are doing this.”

Comment: The Walmart private label stuff notwithstanding, this does seem like a genuine attempt – at some scale – to source from suppliers closer to home. Opportunities abound for those businesses eager to get onboard.

A trading update from Pick n Pay – and it seems that Mr. Summers is eager to communicate a message of cautious optimism to the market. In the 45 weeks through 5 January, Group sales grew +3.6%, muted growth that can be substantially attributed to the scheduled closure of stores as part of the turnaround strategy, which also involves initiatives to improve the overall offer in supermarkets, including staff training. Boxer in the meantime grew sales +11.4% for the 45 weeks in question, although like-store sales came in at +6.7%, which it attributes to this update coming on the back of a particularly strong finish to FY2024.

Comment: Green shoots at Pick n Pay. The turnaround of the business would be a worthy swansong for the talented Mr Summers.

In a further legal setback for SPAR in its long running dispute with the Giannacopoulos family of Eshowe, the Supreme Court of Appeal (SCA) has dismissed the SPAR’s request for special leave to appeal in its long-running credit dispute with the group of member stores owned by the family. In the dispute, SPAR accused the family of violating labour laws and attempting to bypass its trade model; for their part the Giannacopouli claimed SPAR’s case was driven by personal animosity and an attempt to seize their stores. SPAR withdrew stock supply, credit, and brand licensing from the family’s stores, which operates 23 SUPERSPAR and SPAR stores and 22 TOPS liquor stores. “This outcome provides valuable guidance on the scope of discretion that can be exercised in adjusting credit terms,” said SPAR putting a brave face on the recent ruling.

Comment: The hybrid franchise model is not for the faint of heart, and there will necessarily be resentments on both sides from time to time.

Sticking with the theme of trading updates, and checking in on our old friends Anglovaal Industries Limited (spoken in the plummy tones of one neck-deep in his third brandy at the Illovo Club), AVI expects HEPS to rise as much as +10% for the six months through December, supported by “sound growth” in its operating margin and operating profit over the prior year. This on an increase in revenue of just 1.1% to R8.47bn for the period, with Entyce growing a healthy +8.1% and contributing R6.88bn to the haul. Personal care on the other hand declined 6.1%, partly due to lower demand in the aerosol and fragrance categories, and fashion and footwear declined 7.3%. For the rest: Snackworks down 1%, I&J +3.9% with selling price increases offset by a poorer catch mix and catch performance.

Comment: Challenges across most divisions of this highly diversified business. It remains tough out there.

As part of its ongoing portfolio optimisation strategy, Tiger Brands has agreed to sell its 24.38% interest in Chile-based fast-moving consumer goods group Empresas Carozzi, to Carozzi itself, which currently owns the rest. Expansion in South America, where Tiger has traded for 20 some years, is apparently no longer a strategic priority for the business. In a similar vein, Nampak’s shares jumped 6% on the long-awaited disposal of its Bevcan Nigeria business for a very tidy $68.2m. Not unrelated, the Competition Commission has given the nod to Nestlé’s sale of its iconic Cremora brand to French multinational Lactalis’ South African subsidiary. The sale, says Nestlé, stems from a “strategic decision to sharpen business focus”. No price given, no jobs affected.

Comment: A very similar story across three major businesses: a sharpening of focus, a disposal of underperforming assets, a retreat from no-longer-attractive geographies, our own great country excepted of course.

Gross gambling revenue totalled R59.3bn in 2023/24 in the Beloved Country, a +25.7% increase compared to the previous year, driven largely by sports betting, which contributed R35.9bn, or over 60% of total revenue. In total, South Africans wagered R1.1tn for that period, marking a 40.2% increase over the previous year. Again, sports betting came out on top, with bets totalling R761.26bn, or 66.6% of the total. And with the online sports betting industry making truly mind-boggling investments in adspend – from TV spots to aerial banners – this trend seems likely to continue. Numbers are scarce on the pressures this places on the South African wallet, although more gambling is known to increase the risks of addiction and financial distress, especially among vulnerable communities. It’s early days to assess the fallout for our industry, but with young punters betting online an average of 11 times a month, this is a pressure we are likely to be facing for some time in the future.

Comment: Watch this space as we investigate further: our industry is the first to be hit by competition like this.