Oh ho, what have we here? Some time ago, you may recall, we ran a story on Shoprite’s advance on the catering and hospitality markets with its Checkers Food Service (CFS) brand. Now it appears that CFS has been running a website that provides not only to businesses but also to consumers – i.e. you and me – food and grocery items, at up to 40% off what we’d pay in store. What gives? While yes, the site is open to consumers, you would mostly be looking at bulk purchases, for starters. Like Makro, in the old days. And right now, delivery is only available in the Western Cape and Gauteng. Spend over a grand, free delivery within 72 hours. Anything less, 100 bucks. And oddly some items are indeed more pricy than you’d find in store. On the upside, the site carries over 8,000 lines, including fresh fruit and vegetables, meat and alcohol.

Comment: This site is really for businesses, and for people with a larger than usual chest freezer in the garage. But an insight into The Big Red One’s increasingly comprehensive business model.

Big news from Massmart at the shareholder’s hoedown last Thursday, where Mitch Slape announced that the business is to be reorganised from the existing four divisions into two more coherent business units: Wholesale and Retail, with Makro, Jumbo, Rhino Cash & Carry, Liquorland, Jumbo Shield, Saverite brands and Fruitspot falling under the former, and Builders, Game, DionWired and Cambridge Food under the latter. The realignment is part of a strategy which – according to Massmart – will improve capital deployment, unlock the synergies between trading brands and provide a sharper focus on the needs of both wholesale and retail customers. In effect, it marks the birth of a wholesale giant and an entire new route-to-market approach on the African continent, benefiting from Makro’s existing systems and processes. Despite the poor figures on display, with sales up just +3% to R93.7bn, and headline losses somewhere just shy of R1.2bn expected, punters clamoured for the share to the tune of a +6% rise on the reveal.

Comment: Exciting times. As we’ve noted before, we expect that the turnaround of this great South African business is going to be the big story of the year ’20.

Big changes also in store for Game. Their customer value proposition is unclear, there’s an over-reliance on promotions, a lack of coherence in its offering and some categories – like foods – which have simply not worked. Their words, not ours. So they’re phasing out those categories – including foods, music and movies, bringing in clothing basics, and beefing up their popular categories like baby (or rather, the supplies pertaining thereto), multimedia, and groceries. They’re also improving their customer service, basing it on Walmart’s Happy-to-Help programme. Over to you, Massmart corporate reputation manager Michelle Kemp: “Customers will see better, easier to shop price ticketing, on-shelf merchandising standards and much-improved availability of the products that they are looking for.”

Comment: After some rocky years, Massmart seems to be making the big decisions and the bold moves that will return it to sustainable long-term growth.

Ian Moir vacates the position of CEO at Woolworths on 16 Feb, the Dapper One releases its interims four days later. Timing that is not entirely coincidental, if you believe the more cynical of the analysts, who point to the shaky set of numbers Woolies is likely to present: while Food sales are up around +8% here in SA, according to their trading update, Beauty and Home grew just +0.9%, and Fashion +4%, for a Group sales haul of +3.8%. In Australia, it’s even worse, with a -0.4% decline in comparable sales at David Jones and +0.1% for Country Road. HEPS, a reliable measure of profitability, will decline somewhere between -15% and -20%, warn Woolies.

Comment: Fashion has long been a bugbear for the business, with pockets of excellence in a larger garment woven out of confusion and misalignment with the needs of the core shopper. The arrival of Roy Bagattini from Levi-Strauss may improve this – provided they keep doing food as well as they have these how many years and take to heart the lessons of the past difficult few months.

Bit of a shake up under way at The Striped One, where CEO Lawrence McDougall, who has been at the helm for a rocky four years, is stepping aside at the relatively tender age of 63. He is replaced in the position by Noel Doyle, who has done a recent stint as Tiger’s CFO – the second time he has occupied the position. The first time culminated in his departure after the bread price fixing scandal of 2008. Growth has been lacking at Tiger of late: turnover grew just +3% to R29.2bn in 2019, while profit after tax at R3.9bn was just a touch higher than where it was in 2016. McDougall presided over a strategic review of the business aimed at cost-cutting, more efficient use of the marketing budget, and the institution of zero-base budgeting, which every year is approached afresh without referring to the last. Some analysts have complained that the exercise has added complexity to operations.

Comment: All of this, combined with the listeriosis outbreak, has made for a tough tenure. Hopefully the new team will make a better go of it.

Further advances on the continent for Coca-Cola Beverages Africa (CCBA), which has just obtained financing to the tune of $50m from Standard Bank to support its expansion in Ethiopia over the next five years. Ethiopia is a large and thirsty country, with a population of 105 million and the building of a brand new $70m bottling plant underway with the eventual capacity of producing 70,000 cases of the good stuff every day. Standard Bank is Africa’s largest bank in terms of assets held, and has been supplying CCBA with dineros and expertise for a few years now. Elsewhere in the Motherland, CCBA has acquired a 60% share in Eswatini Beverages Limited, since renamed Eswatini Coca-Cola Beverages (ECCB).

Comment: Bold, ambitious stuff from CCBA, now the eighth largest Coca-Cola bottling partner in the world by revenue, and the biggest in Africa.

The IMF has helpfully suggested that South Africa “must implement strong budget consolidation and state-owned company reforms to ensure its debt sustainability.” While the IMF gives a curt nod of approval towards the R50bn reduction in spending the government intends by 2022, this should not come at the cost of pro-poor social programmes and make education and health delivery more efficient, says that august body. In the meantime, our sager economic heads are arguing against the rising tide of sentiment for austerity, a basket of measures that includes reductions in state expenditure, the privatisation of state-owned enterprises, and cutting back on systems of social protection, like state pensions.

Comment: These are not the measures that will generate robust economic growth – that virtuous but elusive state that perpetuates itself and will lift our ten million and rising unemployed out of the poverty trap.