The analysts are all of a twitter (and not the kind you read on your phone) this week, with the arrival of Mitch ‘The Fixer’ Slape from Walmart. They all have some ideas for him. “Cut costs,” says Petri Redelinghuys of Herenya Capital Advisors, pointing out that across the Group expenses were up by close to a billion. “Fix Game,” chorus Cassie Treurnicht of Gryphon Asset Management and Stephán Engelbrecht of Anchor Capital. “The stores look dated,” says the former, and “food seems like more of a hassle than its worth,” says the latter. “Build a proper online retailer,” argues Schalk Louw, portfolio manager at PSG Old Oak. Woolies grew online locally +30% last year, Massmart shrunk it -14% due to third-party issues, and in the meantime, Takealot is going gangbusters. Ron Kiplin of Cratos Wealth isn’t afraid to go one further: “It looks like Slape is going to change Massmart’s fortunes by major cost-cutting,” he boldly predicts, “Possibly rebranding the company and a potential selling of non-core assets. He might even make the Group more focused on the Walmart format, by doing things the Walmart way.”

Comment: Attaboy Mitch. No shortage of sound advice, if you know where to look. Hint: everywhere.

Clicks hits the news pretty much only when it achieves, like clockwork, one of the milestones laid out in strategy. Touch wood, of course, but it’s absolute yonks since we heard any bad news from that business. So it surprises us not one bit to report this week that South Africa’s largest drugstore just opened up its 700th outlet, at Woodstock Quarter in the Mother City. Clicks planned to open 25-30 new stores this year; increased availability of retail space has accelerated this to 41. And HEPS were up +13.2% for the HFY you may recall. Where’s this growth coming from? The three pillars of convenience, differentiation and personalisation, says CEO Vikesh Ramsunder. There will be a shift in focus to the last of these, as increasing digitization makes all things possible. “We will be using our ClubCard database to communicate with customers, focusing on technology to assist us to achieve a more personalised experience for our customers, as we move into a more digitally transformed world in the next 5 to 10 years,” he says.

Comment: Excellent work from a South African institution which even in this hellish economy goes from strength to strength.

A bit of a random reporting period to be perfectly frank, but you’ll no doubt be interested to know that South Africa’s second biggest drugstore almost hit R10bn in revenue in the five months through July 2019, with retail revenue jumping +12% to R9bn in the same period, and like-store sales up +5.3%, assisted thither by the single exit price for pharmaceuticals increasing +3.78%. Wholesale revenue, in the meantime, grew a positively bullish 15.3% to R6.8bn. And all of this in a tricky economic ambit where a sizeable four-month strike at the wholesale division also took its toll. With the strike now ended and the warehouse decentralisation completed, the business will focus on reducing and rationalising its stock holding. And of course, growth: it intends to open a not-insignificant 13 new stores before the end of the year.

Comment: A very solid set of numbers in what must have been a pretty challenging …. erm, five months.

Tesco, still on its ethical business journey, has started selling humanely-raised chickens at affordable prices after a video surfaced showing brutal conditions at plants where its suppliers raised birds at a torturously-rapid 35 days. In the Netherlands, Lidl is selling food at 25 Euro cents on its day of expiry, to cut down on food waste in an experiment which includes such staples as bread, meat and boxes of fruit. It’s marketing these on the existing ‘Too Good To Go’ app, which already provides the service for restaurants. And some huge news from out of the Forbidden Kingdom: China has gone absolutely bonkers for Walmart’s classier competition, Costco, thronging its first Chinese store to the point of closure. Costco is not just a retailer, it’s a Club like Makro used to be, and it’s thought that the relative novelty of the concept is what has delivered the goods in a notoriously tough market to crack.

Comment: Costco is one to watch: it combines something of the low-price, small-range model of the hard discounter with the big-box format that big economies need.

An interesting set of results from Distell. While domestic revenue up by +9.5%, sales volumes declined -0.9%. Net profit was down -45.5% to R909.8m partly because of asset write-downs and credit-loss provisions in Angola and Zimbabwe, but headline earnings adjusted for foreign exchange movements and once-off items grew +7%. And elsewhere in Africa, the business saw comparable revenue growth of +20% and sales volumes up by +10.3%. The star category was ciders and ready-to-drink, which grew in the double digits as Savanna, Extreme and Bernini continued to steal market share from beer. Plans? Defend and grow the local business through market share and innovation, accelerate growth in certain markets beyond our borders, and grow premium spirits and wines in key markets and drive brand premiumisation in line with consumer demand.

Comment: There you have it. Cheers.

Some housekeeping news from Coca-Cola Beverages Africa (CCBA), which has obtained regulatory approval for the acquisition of 60% of the soft drinks business of Eswatini Beverages; ownership of the other 40% will be retained by Tibiyo Taka Ngwane. The new entity will trade as Eswatini Coca-Cola Beverages (ECCB), which will function as a subsidiary of the South African business. What’s the thinking? Over to you, ECCB country manager Sanele Khumalo: “Access to shared best practices will enhance efficiencies and a better distribution capability will provide pervasive availability of cold beverages to end-customers. We will also be able to respond to consumer demand more quickly.” CCBA produces 40% of all Coca-Cola products sold in Africa by volume, and trades in South Africa, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Comoros, Mayotte, Zambia, Botswana, and now Eswatini. The thinking behind this sort of footprint is to leverage scale to the benefit of punters, they say, and to drive their sustainability agenda.

Comment: Solid bit of M&A there, big feller. Keep it up.

You know what? Forget the economy. Let’s talk about something fun, for once. Let’s talk about, yes, why not? Stokvels! Savings group the People’s Stokvel has just achieved the not-inconsiderable feat of establishing a war chest of R1m in 18 months, collecting just R100 per month from its members. It will use this cash not to buy groceries come Christmas, but to invest in small businesses, thus growing the contributions of its members. This is just one stokvel: the National Stokvel Association of SA reckons that more than 11.5 million individuals belong to about 810,000 stokvels, for a market of about R49bn. This, says erstwhile and oft-quoted economist Mike Schüssler, is a big chunk of savings, that goes unaccounted for by the hand-wringers over at the Reserve Bank, who say we have a household savings rate of around -0.5% of GDP. Nonsense, scoffs the ebullient Mr Schüssler. If you take informal savings like stokvels into account, it’s more like 5.6% in the black.

Comment: We’re with Mike on this one. And it’s not just stokvels: South Africa’s entire informal economy is a sleeping dragon, in a good way.