For some reason, Massmart has always been one to espouse the cautious view of how things are going and this financial year is no exception. Having expressed – again, cautious – optimism at the end of the 2017 FY, what with the drought ending, lower interest rates and declining food inflation, they’re back into negative territory after a sober assessment of their first-half performance. Disappointing sales in areas like general merchandise, they believe, can be attributed at least as much to shaky consumer sentiment as to the underlying economic fundamentals, and sentiment took a hit with the ratings downgrades and the political events which preceded them. Total sales grew just 0.3% for the first 21 weeks of the financial year, but comparable sales declined 1.9%. There are some positives, however: market share was up in all key categories, and food growth is outperforming the sector. 

Comment: There’s something refreshing about Massmart’s sometimes gloomy pragmatism, and there’s no doubt they’re making strides in important strategic areas, with particular lows on back-end efficiencies, and divisional collaboration.

Taking things to the next level as usual is Woolworths, aka The Dapper One, which has hooked itself up with something called a Retail Advantage solution from a business known rather excitingly as HighJump. Woolies, you see, finds itself in the tricky, if enviable, position of having its stores increasingly doubling as fulfilment centres for online orders, and this requires some fancy footwork supply chain-wise. Retail Advantage offers a picking solution which will help Woolies reduce the number of times an item is handled, and eliminate inefficient and archaic paper records in the system, making better use of its time, space and human capital. This in turn will help the retailer standardise its processes and increase productivity. To complement the system, the business has also invested in the requisite hardware, including cool-crates, custom trolleys and wearable scanners, bringing all the mod cons of an up-to-the-minute DC into the store.  

Comment: Brilliant stuff, which takes us back to the glory days of Efficient Consumer Response (ECR), a visionary movement which has had much to do with the shape of the modern supply chain.

Walking softly and carrying a big spade this week is Shoprite, which in its unassuming way is giving market access to several of the community garden projects in which it is involved. To raise awareness of World Hunger Day on Sunday, produce from the gardens was sold in Shoprite and Checkers stores around the country. The Big Red One works with identified specialists in this area, including Urban Harvest and Food & Trees for Africa to ensure that community organisations are mentored and equipped to create and maintain their gardens, this with a view to alleviating hunger and generating income for vulnerable individuals and organisations. As reported here before, Shoprite, along with some of the other major retailers, already provides surplus food to hundreds of non-profits involved in feeding the poorest of the poor.  

Comment: As the world population grows beyond the capacity of big business to feed it, the day may come when helping communities feed themselves is an important part of the food business model.

In one of the best sentences we’ve ever heard from an interims presentation (and we’ve seen a few from Whitey Basson in our time) “a confluence of various inhibitors contributed to a material decline in profitability.” Not to be outdone, analysts pointed to “exogenous factors” and “unfavourable procurement positions”. Bottom line is, Pioneer’s results were not all that, with turnover up just 2% and HEPS (the One True Measure of Profitability, or so we’re told) down 48%. Beverage volumes were down with the cooler summer inland, although cereals managed to increase profitability. Perhaps more concerning is the loss of market share in four out of the five categories in which the business operates. 

Comment: In these straitened times, market share is the one to watch, as it’s the best guarantor of a return to form when the economy improves.

In 2016, after the contretemps (if that’s the word) in Nigeria, Tiger Brands undertook a strategic review (and no doubt a bit of soul searching) in order to set the business back on the right track. This involved, they decided, a rejuvenation of the core South African division to ensure sustained profitable growth, and a refinement of the model elsewhere in Africa, including immediate exiting of non-core categories in East Africa, and the prioritising of future African outings according to core category opportunities based on market attractiveness, strategic fit and something they’re calling “our right to win”. And… yes? Ah, quite, those interims you’ve been on about: group turnover up 7% to R16.4bn, with domestic growth coming in at 8% to R14.3bn, while group operating income was up 10% to 2.2billions of rands. 

Comment: So while things continue tightish, as is to be expected in this economy, the Striped One does, like Shere Khan, have a plan.

Here we are again, waiting for another downgrade (pretty sure we lifted that line from one of the gloomy New Wave bands we listened to back in the 80s) and what does it mean? Eh? What does it all mean? For savvy brands, it means the need to rejuvenate the offering, tailoring it to a consumer grown more parsimonious and picky. And agile: now is not the time to stick to the tried and tested, but to adapt when market reality makes itself felt. Finally: a focus on growing market share – the punters out there are rattled by the downgrades and burdened by debt; the economy is growing at just 1% and no one can honestly say how long this is likely to last. Any number of businesses, from Tiger Brands in Nigeria to SPAR in Switzerland are finding that there’s no true Eldorado out there. Time to work the efficiencies, give the punters what they want, hunker down and plan for the good times which may be yet to come. 

Comment: The good news is that with the exception of the poultry industry, and a couple of unforced errors here and there, everyone is weathering the storm pretty well.

As you know, we normally don’t touch the wideboys and nasty women of the garment trade with a bargepole, unless they also happen to sell groceries, but for young Mr Pattison we’ll always make an exception. Mr P, you see, always an outlier in the grocery industry, and after some time in the promising wilderness of alternative energy, has decided to become an outlier in the garment business, grasping with firm but cautious hands the poisoned chalice that is Edcon, as CEO. We wish him well.

Relative newcomer Rhodes Food Group Holdings, having invested around R230m in efficiencies and capacity over the past six months, has said that it will invest a further R220m in consolidating its investments, notably with the upgrading of production facilities at the newly acquired Pakco (you have to try their green mango atchar if you haven’t already) and Ma Baker pies.