‘Allo, ‘allo, ‘allo, wot ‘ave we ‘ere? It’s Shoprite, isn’t it, running a nice little game on the side, in the form of “reckless lending” (the National Creditor Regulator’s words, not ours) to punters they hadn’t vetted properly for creditworthiness. The Big Red One was hit with a R1m fine, the first big judgement the Regulator has handed down but, in the ominous words of the manager for investigations and enforcement, Jacqueline “Judge Dredd” Peter, “It won’t be the last.” The lending in question was not, naturally, in the grocery division, where wiser counsel tends to shy away from unsecured debt, but in furniture, where the business model is basically built on the stuff. Among other discrepancies, Shoprite was allegedly taking unverified incomes other than the borrower’s into account when approving loans. 

Comment: Tough times, tough measure from the NCR. Other retailers would do well to burn the midnight oil and get their books in order.

Comment: We’re almost certain it didn’t go down like this at all.

What’s up in the world, then? The fun exciting world of global retail that is, not the other, floody, hurricaney, earthquakey one. Well, things are pretty grim there too, as it turns out: in the UK, Asda is laying off hundreds of head office jobs in a cost-saving move, while Tesco – having built a “Big, Bold and Homely” hyper designed by a Swedish agency called Blink, a store designed to be more “foody and human scale” according to the blurb – have also raised the ire of consumers by deducting £3.4m (or 10% of total proceeds) from the sales of its charity plastic bags. Over in the US, in the meantime, the Amazon takeover is proving a gift to the posher punters who patrol the earthy, yet gleaming aisles of Whole Foods in search of microgreens and organic spelt. The Clicky One has cut prices by as much as 43% across the group, including bananas, eggs, avocados and rotisserie chicken, throwing down a gauntlet for the likes of Walmart, Costco, Giant and Kroger. And in China, fast becoming the global capital of good ideas executed at scale, online giant Alibaba is following up its incredible Hema grocery concept store with a five-storey mall, packed full of Alibaba specialties and traditional retail. 

Comment: Because we’re in the middle of it, we have no real idea of the change that technology is wreaking right now.

In a sombre trading update last week, of a sort with which we have become all too familiar, Clover let it be known that headline earnings, a reliable measure of profitability, would be down by as much as 65% for the year. This muted performance was caused in substantial part by the drought and by currency fluctuations which increased input costs beyond the point at which they could be covered by price increases – themes echoed by businesses across the industry this reporting season. Clover is a well-run business however, and has a plan, involving cost-savings, the spin-off of the more volatile and commodities milk business through Dairy Farmers SA and an increase in market share – all of which should see an uptick in the results in 2018. The business is also developing higher margin, value-added products in dairy and other food categories. 

Comment: Tough times, down at the dairy and in homes around the country alike.

Another trading update, this time from (relative) newcomer Rhodes Foods. Regional turnover for the ten months through July, they report was up 21.1%, and the integration of recent acquisitions Pakco and Ma Baker is proceeding apace, delivering the projected cost savings and synergies. That’s the good news. The export business, however, hasn’t fared as well, impacted by the strengthening of the rand (by 11-odd percent against Rhodes’ basket of trading currencies) and weakening demand for Rhodes’ industrial products, including pulp and puree. This has led Rhodes to warn punters of a decline in headline earnings of between 17% and 27%, with conditions in the last two months of the FY expected to continue along similar lines. 

Comment: OK… we did not see that coming about the rand. Yet another solid business up against unfairly harsh conditions.

South Africa’s business confidence index has just dropped to a 32-year low – little perspective here, PW Botha was in the saddle, economic sanctions were in full swing, the Boks couldn’t get a game and everyone hated us. The South African Chamber of Commerce and Industry (SACCI) who run the index point to political uncertainty and poor economic prospects as causing the drop, but express muted confidence about our prospects. Don’t take it from us, take it from them: “The positive developments with inflation, interest rates and the trade account of the balance of payments could serve as inspiration for other challenging areas in the economy and reinvigorate business confidence,” they intone, as a chorus. Back to the downside, because we’re tough, we can take it, Moody’s, unsettled by how things are going here, might be considering downgrading us to junk, a status from which return is arduous. 

Comment: No wonder Messrs’ Susman and Heyward (below) feel compelled to weigh in.

Speaking to analysts on the presentation of the Massmart interims, Flight Lieutenant Hayward pitched it pretty strong about the dear old South African Govt.: “Continued high levels of economic volatility and political uncertainty complicate any useful outlook,” he said. Simon Susman, in the Woolies annual report, was less diplomatic. “How difficult it is,” he thundered, “even for a free nation, to remove corruption when… it starts at the top” and carried on in much the same vein for 750-odd words. We look forward to a time when the reporting of our top businesses can go back to P and L’s and inventory levels and stuff being amortised against other stuff. 

Coke’s sinisterly-named External Technology Acquisition Team (ETA) is crowdsourcing research (is that like a competition? Ed) putting up a million bucks US for the research team which comes up with its next big artificial sweetener. This as it increases its drive into consumer-centric products, which include more low-sugar and no-sugar options.

Making like Amazon with Whole Foods this week is Nestlé, which is buying Sweet Earth, a Californian-based maker of vegan meals and snacks made from plant-based proteins. This on the insight that up to half of Nestlé’s customers want more plant-based foods in their diet. This just a couple weeks after their acquisition of a stake in home-delivery service, Freshly. The times are a changin’.