The Big Red One has launched its expansion drive with the opening of 14 new stores last week, creating 820 new jobs along the way. This added to the 6,027 jobs created for the FY2017, cements its position as SA’s largest private employer. And if that’s not good news enough for you, they saved a packet on CEO Pieter Engelbrecht’s paycheck, too, which came in at R31m and some change, compared with Whitey’s last bonsela, which was closer to a cool 100 bar. But back to them new stores… the latest crop includes several liquor stores and a Usave in Aberdeen in the Eastern Cape, a historically under-serviced area of the sort Shoprite are targeting. 82 new stores are planned for 2018, including Shoprites, Checkers, Checkers Hypers, Usaves and Liquorshops. According to the newly flush Mnr. E., “Over the past year 2.4% more customers voted with their feet and wallets to buy at our stores and we processed over one billion transactions.” 

Comment: The canny way that Shoprite translate their present scale into yet more growth, taking few missteps along the way, is something to see.

There’s at least one sector that comes through just fine in tough economic times: booze. Accordingly, most of the major retailers are continuing to go great guns in this sector, with SPAR fielding 705 Tops’s end March 2017, and Shoprite playing catch-up at the rate of one liquor store a week over the last FY, for a total of 390 LiquorShops across its Checkers and Shoprite brands end July 2017. Pick n Pay had a respectable 395 at the end of Feb, while Massmart has liquor departments in every Makro and is now seemingly selling liquor in 40 Game stores, complementing or at least adjacent to the Game with Food offering. Shoprite grew liquor sales at +22.7% last FY, Pick n Pay at +15% and SPAR at +12%, reflective more of the maturity of their various offerings rather than mad booze skills. Shoprite claims 18.2% of the formal liquor market excluding wholesale, which by extrapolation puts SPAR at around 35%, their words, not ours. New legislation is aimed at the phasing out of wine sales from supermarkets where a liquor store exists in proximity.

Comment: Which explains in part the drive to stand-alone liquor.

A couple weeks back we reported – somewhat bullishly, we admit – on Lidl’s prospects in the US, where they’re going up against more established competitor Aldi and whatever the local market can throw at them, too. Now it seems that things aren’t as star-spangled over there as it seems, to the extent that the business has appointed a new exec in Germany to look after its US operations, results from which according to a recent report in a German newspaper are “frighteningly weak”. Keeping with Lidl, Tesco is in a spot of hot water for repackaging chicken drumsticks rejected by Lidl under its own “reared exclusively for Tesco” Willow Farm brand. The reared exclusively claim has been removed following footage showing the repackaging by Tesco supplier 2 Sisters Food Group. Finally, the Amazon Go concept store in Seattle is nearing the end of year one of its pick and go experiment, aimed at the nattily-named "generation CX" (which demands customer experience, as distinct from generation X, which demanded cut-off army pants, Soundgarden and cheap weed) with no immediate indication as to how it’s going. 

Comment: It’s devilishly tricky to keep up with the cost-cutting shenanigans of one’s private-label suppliers, as the Tesco story shows.

Two years ago, we reported on the establishment of bottler SoftBev when Bowler Metcalf merged its Quality Beverages businesses with Softline. Last week, Bowler reported a R93m loss at the unit for the past FY, which it attributes to planned costs in a sector with an “intensely competitive and sieged nature” at a particularly difficult time. SoftBev bottles brands like 7UP, Pepsi, Mountain Dew and Mirinda as well as local heroes Jive and Coo-ee. Bowler is critically examining its continued involvement with the business, a relief to some analysts. In other news from purveyors of fizz, the Food and Allied Workers Union is hopeful that members of the FAWU employed by Coca-Cola Beverage South Africa (CCBSA) will soon own an 18% stake in the business under the employee share ownership programme upon which Coke’s acquisition of the AB InBev stake in CCBA was conditional. Still with us? Good. 

Comment: The second-string status of SoftBev’s brands might be more of an issue than the “sieged nature” of the fizzy drinks market.

Comment: Yay brands!!

A couple years ago we reported more in sorrow than in anger that South Africa was no longer Africa’s largest economy, an honour that now belongs to Nigeria. No we report with a touch more anger than sorrow that we’ve also lost our position as Africa’s most attractive investment destination to Egypt. This is not tricky to understand, it’s a simple question of slowing growth rates and mounting concerns over our country’s governance and the strength of its institutions. And it’s not just the lack of investment that’s of concern – it’s the money leaving our shores: since 2006, R378bn has gone overseas, mainly in the form of the purchase of foreign businesses by local ones (coughwoolworths,sparandshopritecough)and not all of it is coming back with interest. 

Comment: In these difficult times, we must take hope where we find it, and we prefer to take it from one of our own: “Problems are everywhere in the world,” says Oom Christo Wiese, who could live wherever he wanted. “Our problems in my opinion, are relatively easy to solve. If we start using our heads. Other countries are stuck with problems that are virtually impossible to solve.”

Sometimes the story is the story. After Pick n Pay reported last week that it would be launching a credit offering to qualified Smart Shopper members, there was an absolute slew of stories in the local press warning of the pitfalls of easy credit for food purchases – some of whom pointed out, correctly, that Woolies was already doing it. Pick n Pay Deputy CEO, Richard van Rensburg on Monday said that the retailer is following the National Credit Act strictly, and has suggested that it’s not a good idea to buy food on interest-bearing credit. 

Flying in the face of Top Brands surveys everywhere, the sales of Kellogg’s have been tanking in the US for seven years, and this has led (perhaps indirectly) to the recent resignation of CEO John Bryant. Word on the street is that the board is looking outside of the business for a replacement.

Woolworths, has been named by Ornico (a media monitoring company) and Africa Brand Index as the third best social media platform on the continent and the best social media platform in retail. The business has 20 social media channels operating through 12 countries, with a combined following of over 2.2million fans, attracting over 350,000 interactions a month. Woolies’ SA Facebook page alone reaches well over a million targeted South African consumers every week.