In news this week of the extremely slow-burning, Clicks has at long last decided to give vegan and cruelty-free beauty retailer The Body Shop a real go by ramping up the expansion of the brand after signing a further 10-year franchise agreement in SA. There are currently 56 standalone stores in SA, with brand presence in a further 800 Clicks stores, give or take. This as punters turn in increasing numbers to products that objectively improve well-being and planetary health. “We’ve seen the markets really change over the last decade or so around consumers looking for more ethically sourced and sustainable beauty brands. The Body Shop brand really does fall into that,” explains beauty and wellness investments head Linda Sinclair. The Body Shop was recently acquired by UK-based Aurea Consortium, whose deep understanding of the category is in part driving Clicks’ renewed focus on The Body Shop brand.

Comment: Excellent news, and frankly about time. But if they try to bring back Musica, we’re out.

A very quick recap of that flurry of interims and updates we’ve had recently. Shoprite is the clear winner, with sales up +9.6% to R128.6bn for the six months through December, with notable success for Checkers and both its Sixty60 delivery platform and Xtra Savings rewards scheme. Pick n Pay was slightly down for a 19-week period it shared the numbers on, although growing like-store sales by +3%, and recent spin-off Boxer up +10.8%. Woolies Food up +9% for the interim period, with FBH managing only +2.5%. And Clicks grew turnover +8.1% to R18.2bn for the 20 weeks through mid-Jan, with like-store sales slowing to +5.9%. What’s the big takeaway? Over to you, our friends and colleagues at the dear old Financial Mail: “In food retail, the market remains polarised — premium segments show resilience, while budget-conscious shoppers sustain the lower end,” they say. “Overall, sales across most sectors have benefited from a significant moderation in inflation.” They also point to the uptake of delivery at the upper end as being a potential landscape changer for the sector, and a threat to brick-and-mortar convenience.

Comment: A time of immense change – to which most of our retailers are adapting (or which they’re actively driving) with remarkable agility.

Not hard news exactly but a little set of numbers that casts a bit of light on one of the longstanding rivalries that animate our water cooler discussions: since it listed, Dis-Chem’s group operating margin has contracted from 6% to 5%, while Clicks has grown its margin from 6% to 9% over the same period, the larger business perhaps benefitting from the efficiencies that are possible above a certain scale. Next, from our peers at Business Day, South Africa’s FMCG retailers added more than 10,000 stores to their collective haul over the past five years, for an expansion in footprint of +24.2%. A number they got from (checks notes), ah yes! The latest Corporate Retail Comparative Report from Trade Intelligence. Finally, Happy belated Valentine’s Day to storied UK sandwich shop Pret a Manger which opened its inaugural Mzansi store in Melrose Arch last Friday, offering the usual menu of sandwiches, salads, wraps, baked goods and snacks, as well as vegetarian and vegan options. Plus that ineffable feeling of being 24 again and striding down Earl’s Court Road with hope in your heart, a Pret in your hand, and a well-earned hangover.

Comment: A welcome addition to SA’s already lively fast-food sector – which TBH has suffered from a bit of a gap that only upmarket sandwiches can fill.

In Brazil, French grocery giant Carrefour has offered to buy the shares it doesn’t already own in its subsidiary there, Atacadao SA, as it seeks to boost growth in that promising geography. “From the […] French standpoint, it is a transaction that makes sense,” says Joseph Giordano, a no-doubt gimlet-eyed analyst at JP Morgan. “Brazil is an interesting market from a top-down perspective and Carrefour is the number one player while Brazil is a substantial earnings before interest contributor to the group.” True that. The Brazilian supermarket industry enjoyed revenues of $183bn in 2023, and could hit $195.4bn this year, with annual growth of +6.1% expected to 2030. 414,000 stores are currently trading in that vast country, where Carrefour already enjoys status as top supermarket group, followed by Assaí Atacadista. Like our own, it’s a highly consolidated sector with the top ten retailers owning 71% of the formal market.

Comment: Still, a promising place to do business, if you have the product and the appetite for adventure.

Punters are rushing back to the great businesses which make up the FMCG manufacturing sector, which had been shunned like a Puritan adulteress for some time by investors. “This sector has long been out of favour with investors,” confirms Dhersan Chetty, Equity Analyst at Foord Asset Management. “Limited pricing power, heightened competition from private labels, underinvestment in manufacturing facilities, and rising commodity prices have squeezed margins for many players.” Premier Group’s stock has surged +65.33% in the last six months, for example, and Tiger Brands has also delivered solid returns, rising by +24.07% in the same period. This he attributes to a range of factors – stabilising food inflation, which had previously led to declining volumes, allowing food producers to pass on price adjustments. Commodity input costs such as wheat, maize and rice have also come down, improving margins, and shoppers have had their morale boosted by lower interest rates, declining fuel prices, policy reforms and the introduction of the Two-Pot retirement system.

Comment: Sometimes, merely surviving looks like a win. But for some of our businesses, that is thankfully in the rearview for now.

A flurry of results and updates and veiled promises from the international contingent. First up, Nestlé, which expects its 2025 full-year organic sales to be higher than last year, with an underlying trading operating profit margin of 16% or more, down a touch from 17.2% last year. Under new CEO Laurent Freixe, the Swiss giant is attempting to grow sales volumes, invest in innovation and restore investor confidence after years of soaring prices sent shoppers looking for cheaper alternatives. Next, British American Tobacco is anticipating a rough year after the £6.2bn settlement against it from a long-running lawsuit in Canada, with revenue to grow only about +1% in 2025. Sticking with the vices, Heineken reported an +8.9% increase in its 2024 full-year organic operating profit to about €3.5bn. The local business did its bit, growing in both the beer and cider categories. Finally, shifting away from results, Coca-Cola may be heading back to plastic as Trump’s 25% aluminium tariff kicks in. Asked during an earnings call this week about the impact of the import tax, Coke CEO James Quincey said that when it comes to “ensuring affordability and ensuring consumer demand,” Coca-Cola has other package offerings “that will allow us to compete in the affordability space.” He means plastic. Related, Coca-Cola accounts for 11% of branded plastic pollution in the world.

Comment: We have to – collectively, as consumers and businesses – find a better way, when it comes to competing in the future of the planet space.

The January South African Economic Report from Trade Intelligence is out, and it’s a humdinger, don’t believe us, ask our analysts: A rollercoaster of bad and good news – GDP revised down, fuel prices ticking up, and electricity prices will go up again in Apr 2025 but retail sales growth is on the up, inflation is moderating and interest rates are dropping. Digging in, yes, GDP growth for 2024 was indeed revised down to +0.7%, from +1.1%, even as the dear old ZAR continued stronger year-on-year despite slipping for the month of Jan as a result of the increased uncertainty in the global markets stemming from Trump’s first month. CPI averaged +4.4% for 2024, with +3.0% for Dec 2024, supporting a 25 basis points interest rate cut at the end of January, in an uncertain environment. Consumer confidence hit the (not so) dizzying heights of -6 for the last quarter of 2024, its best performance since 2018. And finally, those retail trade sales: an absolutely stonking +7.7% up for November 2024, its best growth in over two years.

Comment: So there you have it. Could do better, in the words of almost every teacher we ever had.