Some news from the informal sector this week. One is that in one of its periodic flights of well-intentioned nosepokery, the Government has introduced a bill which will primarily hit the smaller operator. The Tobacco Products and Electronic Delivery Systems Control Bill introduces among other provisions a ban on smoking in public places such as restaurants, workplaces, and public transport, plain packaging requirements for tobacco products, and strict limitations on how tobacco products are displayed at points of sale. The National Informal Traders Alliance of South Africa (NITASA) believes the legislation, if enacted, could play merry hell with the livelihoods of its members. “We need to understand that cigarettes are not illegal products. However, the bill will place informal traders under severe pressure by criminalizing them for selling tobacco as part of their livelihood,” says NITASA president Rosheda Muller. In other news, Gauteng’s Finance and Economic Development has rejected all but 5% of compliance applications received from foreign spaza shop owners, mainly on the basis of incorrect or fraudulent paperwork.

Comment: Tough times in the toughest segment of this great industry we call home.

This “Hip Hop” thing seems to be all the rage these days, doesn’t it? First that Kendall (Its Kendrick. Ed.) Lamar chap at the Superbowl, then Rick Ross shilling for Pick n Pick in their latest Smart Shopper TV spots, adding his baritone to a version of DJ Khaled’s hit ’All I Do Is Win’, which also inexplicably but delightfully features the homegrown lyrical stylings of Schalk Bezuidenhout. The campaign strategically aligns Pick n Pay’s rewards programme with the song’s winning theme, reinforcing the value of Smart Shopper benefits for shoppers. And speaking of – Pick n Pay didn’t seem to do much right under the previous few leadership teams, but Smart Shopper, which introduced a high-profile loyalty offering to the mainstream grocery sector, was an excellent move: when last reported, in 2023, the programme had 11 million active members with an 80% sales participation, and (our gut feel here) greater brand recognition than comparable offerings by other retailers. But back to the vibes. “When we initially pitched the idea, it instantly appealed to Rick Ross, given that he is the biggest boss and a smart businessman, so the message of Smart Shopper aligned,” says Co-Head: Omnichannel Vincent Viviers.

Comment: Bold, silly, newsworthy. Nice move.

Nice work, the Shoprite Foundation for its investment of over R3m to equip two fully functional robotics labs at Cingani High School and Soqhayisa Senior Secondary School in Motherwell, Eastern Cape. “Through this investment, the Foundation aims to equip our youth with core competencies such as analytical thinking, cognitive abilities, resilience, teamwork, and collaboration,” says the Big Red One. Big up also to Woolies for their wins at the 2024 International Content Marketing Awards (CMAs), hosted by the Content Marketing Association in London earlier this month: Gold in Best Purpose-Led Content for This Apple Can Save the World campaign and in Best Use of Influencer Marketing for Woolworths Taste; Silver for Best Annual Always-On Content Strategy for Woolworths TASTE's digital-first strategy and Best Content Team: Woolworths Taste, plus a plethora of Bronzes. “Our commitment to digital content unlocks incredible opportunities to connect with our customers in more meaningful, personal ways,” explains executive content director Cathy Lund.

Comment: We old-media purists were sad to see the death of the print version of Taste. It seems that excellent publication has enjoyed a new lease on life in the ether.

Always interesting to check in with SPAR internationally – and particularly informative, we would argue, to check in with SPAR in China, which may in the months and years ahead become an ever-more-significant trading partner for South Africa. SPAR was introduced to China in 2004 with the signing of a licensing agreement for Shandong Province, and has grown at a relatively cautious pace in the decades since – although they now also trade in Guangdong Province. The privately-owned retail chains licensed to operate SPAR have a cooperative relationship in line with the original SPAR mission of working together to reduce costs, maximise sales and increase profits. The SPAR China Partners maintain 100% local ownership. They turned over just more than €1 million in 2023, and currently trade from over 340 stores. They’ve been recognised as one of the top 25 supermarkets in the country by the China Chainstore Franchise Association (CCFA). Digging in a little, the 4,000m² SPAR Supermarket Jiajiayue Beijing Chaoji Heshenghui, opened last April, boasts modern design, developed in collaboration with SPAR International, and blends the best of traditional Chinese culture alongside a best-in-class Western supermarket.

Comment: And one day soon, we suspect, it will be carrying biltong, rooibos and Mrs Balls on its shelves.

Some illuminating words from Aspen Pharmacare’s Group Senior Executive Stavros Nicolaou, on CNBC the other day, on the news that US Secretary of State Marco Rubio has issued a waiver partially lifting the Trump administration’s freeze on foreign aid, potentially offering a reprieve for US-funded HIV/Aids programmes like PEPFAR, to which Aspen Pharmacare is a significant supplier. During the interview, Stavros highlighted the need for self-reliance, advanced planning, and effective implementation in the industry. He stressed the importance of Africa taking control of its healthcare capacity and not depending on external support in times of crisis. Looking ahead, he urged for continued policy changes and collaborative efforts to enhance healthcare resilience in Africa. “The bottom line is twofold,” he said. “Number one, the healthcare of the continent is an immensely important element to both social and economic stability and economic growth [...] Number two is that we are going to have to carefully navigate where we go to with the bilateral and multilateral relations with the US.”

Comment: A measured approach to what may have been a five-alarm crisis. The resilience of businesses like Aspen is not to be underestimated.

A handsome trading update from RCL FOODS, which predicts a +31.2% to +38.6% increase in HEPS for the six months through December, on the back of gains in Groceries and Baking, as well as a partial recovery of the additional levy raised by the South African Sugar Association (SASA) as a result of Tongaat and Gledhow suspending payment of their industry obligations. Moving on, in reporting its global results, PepsiCo noted that the South African business, established with the takeover of Pioneer Foods, reported double-digit organic revenue growth for the year, as the international business turned in revenue growth of 16%. “Our results demonstrate that the investments we have made in our people, brands, portfolio, value chain, and go-to-market systems are working," noted chairperson and CEO Ramon Laguarta. Finally, cheers from Astral Foods to legendary CEO Chris Schutte who steps down from a business he has successfully shepherded through load-shedding, COVID, and bird flu, leaving behind him the largest producer of chicken in a country that loves the stuff. He will be succeeded by Gary Arnold.

Comment: Good work sir. And good work the SA FMCG manufacturing sector in general.

A quick glimpse between the covers of the latest Corporate Retail Comparative Report from Trade Intelligence, which reveals that in the second half of 2024, food inflation moderated, supporting underlying volume growth performance, with Shoprite Supermarkets RSA joining Clicks and Boxer in the black, while Woolworths Food and SPAR Retail Grocery improved but remained in the red. But despite the good volumes, those businesses didn’t sit back and relax. Instead, they juggled gross margins with aggressive price investments to hold onto – or snatch up – market share in a hyper-competitive landscape. They also significantly expanded their presence across the continent. Over the past five years, they have opened, on average, one store per day in South Africa and Africa, resulting in +24.2% growth in store footprint, for a total that now exceeds 10,000 outlets. For the grocery retailers, this expansion includes growth in non-grocery channels (i.e. pet, baby, clothing) to diversify revenue streams and enhance profitability. What’s next for these retail titans? Big decisions and even bigger investments.

Comment: The details of which you will find in the full report, available here.