Some snippets from Clicks this week. First up, the Department of Health has upped the single exit price (SEP) for 2020, increasing the amount manufacturers can charge for prescription meds by 4.53% – slightly lower than the allowable max, but higher than last year’s increase of 3.78%. This (it seems to us) will have a material impact on turnover but on little else for the business. Next up – after last week’s announcement that Clicks would be entering into a new loyalty partnership with Engen, Shell have announced their own new loyalty programme, giving punters 15 cents per litre back in rewards as opposed to the 10 cents they were getting through the Clicks programme. Finally – and this one’s probably the biggest story, Clicks has launched a new concept store in Fourways, with a larger beauty department, differentiated with distinctive fixtures, flooring and lighting, beauty advisors, extended ranges, and makeover stations with selfie mirrors that encourage customers to interact with product.

Comment: Excellent idea, particularly in difficult economic times, where the little indulgences take on greater importance.

Pick n Pay are taking their supplier development programme to the next level with the launch of an app that will connect its small supplier to experts in disciplines like procurement, merchandising, compliance, supply chain, financial management, marketing and human resources across the Pick n Pay business. The Big Blue has already been offering mentorship informally to members of its Enterprise and Supplier Development (ESD) programme, helping to prepare them for the hurly burly of listing with a major retailer, with some notable successes; now, 150 staff have been verified on the app, which was launched internally in November. On the app, catchily called “The Mentorship app”, suppliers, who must be part of the Enterprise and Supplier Development, will be able to search for the expertise they need to help them navigate a thorny business problem, then request a meeting at the click of a button.

Comment: The rise of supplier development programmes is a uniquely South African solution to a particularly South African challenge: how to channel the enormous entrepreneurial energy of businesses that otherwise lack resources and exposure.

Community Gardens have been one of the mainstays of Shoprite’s corporate social responsibility programme for some years now and received a deserved boost in attention during ‘Giving Tuesday’ a couple of weeks back. The Big Red One now supports over 100 community gardens and 300 home gardens in an attempt to improve nutrition in South Africa’s poorest suburbs, and to generate income through the sale of surplus produce. The gardens are run sustainably, with home-made pesticides, and salvaged materials for the construction of everything from beds to benches. Crops are grown in rotation to maximise the yield from often impoverished urban soils, and Shoprite steps in with whatever’s necessary, from protective netting to Jojo tanks, depending on the requirements of each garden.

Comment: Inspiring stuff – and increasingly necessary, as small scale agriculture steps up to close the inevitable gaps that will develop in commercial models under climate change.

Trader Joes, despite trading from only 350-odd locations is one of the best-loved retail brands in the US, inspiring fierce loyalty among its faithful, who love it for its quirky take on snackage and ready-to-eat meals, for its aloha-shirted staff, its everyday low prices and its unpretentious take on wellness and sustainability. What they don’t know is that the business is owned by the Albrecht family of Aldi Nord, and runs a very tight ship indeed, with just 3,000 SKUs, a super-streamlined distribution operation and more sales per square foot than any other super in the States: they sell $2,000 of groceries per square foot, compared with Whole Foods’ $1,200 and Walmart’s $600. What they don’t have is home delivery, self-checkouts, or any kind of loyalty programme at all – which these days are pretty much considered the cost of doing business. For more, have a look or indeed a listen, here.

Comment: A fascinating if secretive business, and one that an enterprising local retail group might do well to emulate.

A couple years ago – to widespread alarm in the advertising world – Unilever announced that it would be bringing a lot of its advertising in-house. How did that go? In fact, it didn’t, not exactly. They adopted a sort of hybrid model, working with creative outfit Oliver, which specialises in setting up in-house studios, to establish centres called U-Studios in Unilever offices around the world. One such studio is in Unilever’s South African head office, located over the azure Indian ocean and amid the whispering canefields of Mhlanga Ridge. There, Oliver has created a team that works on-site with Unilever, providing the proximity of its marketing capability, while managing both costs and talent for the client. “As U-Studio grew, there was less pushback and much more vested interest from Unilever’s people,” says U-Studio’s Ashveer Mahabeer. “They saw how the proximity and agility bring their ideas to life faster and test them more quickly.” The innovation has saved Unilever €500m globally in 2018 alone.

Comment: Tough for the agencies which didn’t make the cut. But getting respect from a 24 year-old brand manager is always nice, no matter how you come by it.

Jumping on the bandwagon with a sackful of cash and a hastily-procured tie-dyed t-shirt this week is The World’s Biggest Brewer™, viz. AB InBev, which is launching its drive into cannabis-infused beverages with a collection of flavoured teas – lavender chamomile, vanilla rooibos and peach ginger green, in Canada, where edibles and beverages are shortly to become legal. But – as they’ll hasten to tell you – you cannot get any kind of buzz off the stuff, which is infused with only the non-high-getting sort of dagga, the sort that cures glaucoma, the common cold, and disappointment. Allegedly. Anyway. Once they’ve captured the contemplative afternoon tea drinking market, they’re going to launch a range of non-alcoholic fizzy drinks for more adventurous souls, at a time when alcoholic fizzy drinks (we’re looking at you, beer) have lost their sparkle somewhat among health conscious punters. Interestingly, the much vaunted cannabis goldrush has so far, proven something of a bust, too.

Comment: Still. Fascinating to be witnessing the birth of an entire new industry.

Trade Intelligence lost a dear friend and champion last week, and the South African consumer goods industry one of its greats. Malcom Leitch spent the heart of his career at Unilever, finding his niche in trade marketing, where he developed a reputation as a tough negotiator and a true gentleman, and where he finished his time as VP for Customer Development. He was an influential leader in the consumer goods industry, pioneering the principles of Efficient Consumer Response (ECR) in South Africa, and bringing retailers and suppliers together to tackle non-competitive industry issues. In his later career he brought his experience and expertise to a number of other concerns, including Chep and Smollan Holdings. He was one of the first clients and earliest supporters of Trade Intelligence, later an executive associate of the business (we were extremely fortunate to get him), and always a true mentor to the leadership team. Malcolm was a man of great good humour, integrity, and courage, and we were privileged to work with him.

The Consumer Price Index (CPI) has dropped to its lowest level in nine years, hitting 3.6% for the month of November, and giving rise to a chorus of appeals for the Reserve Bank to give us all a break for a change and drop the repo rate. Some economists have suggested that this might mark the low point of our current slowdown, but have also warned that things are unlikely to look much rosier until well into the new year once (we hope) weak demand and load shedding are behind us. It’s believed that the Reserve Bank is spooked by the risk of a further downgrade from Moody’s, and on the risks imposed by the government’s deteriorating fiscal position to drop below the current rate of 6.5%, but it is believed somewhat more strongly in some quarters that this caution is a grave error.

Comment: SA’s beleaguered consumers need a break. This might be one way to give them one.