Those Shoprite interims and everyone – Shoprite themselves included – are surprised that the news is not as good as it used to be in the glory days. Sales up just +0.2% in the six months through December, to R75.8bn, with like-store sales down -2.7% YoY. In the rest of Africa, the Group recorded a trading loss of R61.8m, driven largely by currency issues in Angola, as against a trading profit of R552.7m last year. The worrying performance back home was driven by DC strike action causing out of stocks which cost an estimated billion in sales, the extended SAP conversion of over half the business and the longest period of internal price stagnation in living memory. On the upside, says the trading statement, “since January 2019, an improved sales trend is evident”. But for a wrap up of the numbers, have a look at our summary here.

Comment: In the absence of the immortal wit of Whitey, here’s something from Oom Christo, who showed up at the presentation, lending some gravity to the whole shebang: “Shoprite has been through tough times before. We proceed with caution, but we are not in any form or fashion about to run away.”

A game we analysts like to play is called “That’s not a retailer,” and it goes a little something like this: in order to draw attention to a retailer’s dependence on a non-core revenue stream, we compare it to another type of business altogether. So we’ve had, in recent years, “Pick n Pay’s not a retailer, it’s a bank,” and “Shoprite’s not a retailer, it’s a property developer” What then are we to make of the news that Shoprite has enabled the transfer of R1bn and counting in remittances from South Africa to Lesotho, in just three years? “It’s not a retailer, it’s Oxfam”? The transfers take place at Shoprite Money Market counters, naturally, and at just 2% per R900 are among the cheapest cross-border transfers in the world, saving the recipients an estimated R80m over the period. Shoprite is partnering with FinMark Trust to provide similar services to the people of Zimbabwe, Malawi, Mozambique and eSwatini.

Comment: Another plus is that 70% of the recipients in Lesotho are women; the service serves as a de-facto enabler of development in our landlocked neighbour.

Here’s a story that probably belongs down yonder among the suppliers, but then again maybe not. Pick n Pay’s Enterprise and Supplier Development programme has named its 2019 Small Supplier of the Year, and the name of that small supplier is Tropical Mushrooms. Tropical, owned by Magaliesberg farmer Peter Nyathi, got in on the programme in 2007, and sold the Big Blue a relatively modest R2.5m worth of mushrooms, although admittedly that sounds like a lot of shroomage to us. Last year, they bought over R11m of the flavoursome fungi off him, stocking over 330 stores in the hinterland. The case of Tropical highlights perhaps the most important way in which a business like Pick n Pay can empower smaller suppliers: not through skills transfer or business support, but in cold hard cash. Says Suzanne Ackerman-Berman, Transformation Director, quoted here for the second time in as many weeks: “(Peter) knew his business well, but needed financial support to expand his business to build a sustainable future. Through our commitment to fulfil orders, he secured the funding he needed to grow.”

Comment: Orders. That’s the ticket.

The travails of this great industry we call home continue. This week, it’s Tiger Brands’ turn in the proverbial barrel, with the Striped One reporting an increase in revenue of just +1% for the four months through January. Last year’s listeriosis outbreak weighed heavily on the numbers: excluding the affected value-added meat products unit, revenue was in fact up +8%, on the back of a +6% rise in volume and price inflation of +2%. Like many other businesses, the Group is experiencing margin pressure, with price increases not completely covering the costs of selling price inflation at a time when consumers are feeling the pinch on disposable income. And Tiger is battling to get the meats unit back on its feet, struggling to meet demand in the face of challenges in the factory start up – challenges it assures us it is resolving.

Comment: With listeriosis now substantially behind it, and the disposal of Oceana to wrap up end April, Tiger is well positioned to face the difficult trading climate with renewed focus.

Last week we reported that Coke expected revenues to be hit by the sugar tax. Imagine, then, the position in which Tongaat finds itself: after last year’s decline in headline earnings by -37.2%, the Group reports that once again it expects earnings to fall, by around R8 per share, as a result of oversupply and the effects of the aforesaid tax. What is to be done? According to new CEO Chris Logan, the business has appointed advisors, is undertaking a strategic review, and is considering impairments to cane assets and project costs. In the past, Tongaat was able to offset poor performance in sugar by turning the cane fields into malls and golf courses; this year land sales brought in only R28m, compared with R1bn last year.

Comment: Tough times for an iconic and often innovative South African business. But it seems that management are ready to make the hard decisions and return to profitability in a difficult and cyclical industry.

Providing some relief for SA’s embattled consumers, most of whom did not feel a lot of love from last week’s budget, were this week’s inflation figures. CPI slowed to 4% for January from 4.5% in December, beating the expectations of economists who were expecting closer to 4.3%, and assisted thither by two straight months of reductions in the fuel price. This has the pleasing knock-on effect of restraint from the worthies at the Reserve Bank, who will hold off on any interest rate increases as long as this lasts. Within that, food inflation was even lower, at 2.3%, although veggies spiked alarmingly at 11.1% and cold beverages even more at 11.2%. Water and other household services were also up by 11%.

Comment: Inflation has been one of our few economic successes in recent years, and thank the gods of spreadsheets and algorithms for that.

Not much on the boil this week. In the US, Aldi are upping their private label offering to appeal to younger price and quality conscious punters in the posher suburbs where they’re setting up shop. So for e.g., where once they sold a single type of own-brand olive oil, they now sell four, one of which is sourced from somewhere special in Sicily. Their expansion notwithstanding, they still only account for 2% of the grocery market there. In the UK, in the meantime, Brexit has put the wind up the retailers, who despite a generally positive business outlook, are now planning the smallest level of investment in seven years, ahead of the coming storm.

Big up to the crisply refreshing Heineken, which have given 1.2millions of rands to the WWF to help in a water preservation project in Ncotshane Township near Pongola in KZN, where community volunteers are responsible for fixing household leaks, reporting sewerage spillages as well as illegal dump sites to the local municipality. As you may know, global water demand has doubled in the last 50 years, and we may be facing a deficit of 40% in that most essential resource by 2030.