In a gloomy results preso last Thursday, Massmart – which has never sugar-coated the bad news in our experience – let it be known that trading profit declined -46.3% to R1.11bn and operating profit (before forex, interest and tax) declined -55.0% to R852m, on sales that grew +3% to R93.7bn. Sales back home in the Beloved Country grew +2.7%, but elsewhere in Africa looked more promising at +6.4%. Food and liquor sales were up +5.1% to R53.5bn, home improvement grew +2.9% to R14.2bn, while general merchandise fell -1.3% to R25.9bn. Massdiscounters, encompassing Game and DionWired, recorded a trading loss of -R674.6m after a trading profit of R32.6m last year, explaining the urgent focus on that segment of the business. “2019 was a year of under-performance, it was a year of change, reset, and will help us reposition our business better,” says new guy Mitch Slape. “2020 will be a year of change and refocusing the business.” For more, read our one-page summary here.

Comment: There’s no margin for error in these tough economic conditions.

In a very smart move, Pick n Pay is launching an exclusive range with healthy food takeout crew Kauai. The range includes frozen ready-to-eat meals, sides and smoothies, and will be available nationwide. The ‘Pick n Pay powered by Kauai’ range includes Kauai’s top-selling smoothies. Customers need only blend the contents at home to enjoy the same smoothie they’d buy at Kauai. Among the smoothies are Kauai favourites Strawberry Stinger, Tropical Greens, See Monster and Plant Power, the ingredients of which need only be run through your Nutribullet to be ready to eat. A range of frozen meals includes Butta Chicken Bowl and the Moroccan Chicken & Chickpea Bowl, and vegan options such as a Thai Veg Curry Bowl and Mexi Veggie Bowl.

Comment: The Kauai brand – despite the fact that it’s been trading for over twenty years – retains its youth and freshness. With this move, Pick n Pay is capturing some of that cool kid cache for itself.

Something we didn’t highlight last week in our reporting on Shoprite’s interims was there relatively poor performance elsewhere in Africa, where they have been the undisputed leader in formal retail for the better part of a decade and perhaps longer, but where sales grew +4.8% in constant currency terms, and declined -3.1% in rand terms. Not being a business that takes adversity lying down, Shoprite has taken immediate action, reducing the number of new supermarkets planned for the next few months from 17 to 13, exploring other operating models like franchises, JVs and different formats, and assessing the viability of underperforming stores. It’s not all bleak: in Angola, where hyperinflation hit the business hard, the business has improved its liquidity and is better able to buy stock. In Nigeria, however, where xenophobic violence in South Africa saw sales decline -59%, Shoprite has yet to recover the goodwill of shoppers.

Comment: A complex and fast-evolving geography, where even a hardened campaigner like The Big Red One has tough lessons to learn.

Tesco are quietly rolling out their cashless self-checkout stores at a rattling pace, with plans to do “anything” to reduce lunch-hour congestion in their central-city stores in London, Manchester and Birmingham. They’ve already opened their first one in London. The problem, say some pundits, is that 8 million Brits, including many who are elderly or otherwise infirm, still rely on cash for their daily transactions. More Tesco news is that over 1,800 bakery jobs are on the line as punters opt for healthier options like wraps, bagels and flatbreads rather than the store-baked loaves they used to prefer. Also in the UK, Lidl are harvesting plastics off the beaches of Southeast Asia for their new line of “ocean bound” packaging, and as part of an initiative which will see them reducing the use of plastics -50% by 2025 across their food operations.

Comment: Yay, Lidl, boo Tesco. The rush to remove every single human from the value chain is a road to nowhere.

A rough week for Unilever, who have been ordered by SARS to fork over R470m in unpaid VAT, courtesy of an export fraud scheme by Unilever customers Devland Cash and Carry and Gatbro International, both owned by the Gathoo family. The deal was that in 2013 and 2014 the businesses were buying stock off Unilever for ostensible sales beyond our borders, exempting them from VAT. Problem was, none of the 156 shipments in question ever made it over Beit Bridge into Zimbabwe, leading gimlet-eyed SARS investigators to believe that the stock in question had in fact been sold back home. This as part of a wider investigation into the cash & carry industry, which presumably still has pockets of the Wild West that are fast disappearing as it formalises. By law, Unilever would have been required to ask for proof of export in the form of documents that Gatbro appears to have lost. In their absence, Unilever carries the can.

Comment: Unilever is perhaps a more attractive target to SARS than the more opaque and nimble Gatbro might be.

Two centenaries, two beleaguered businesses, two otherwise very different bits of news. First off, Tongaat Hulett, of recent (and ongoing) reported accounting scandal fame, is selling off its 100 year old starch business to Barloworld subsidiary KLL Group for R5.35bn in an attempt to relieve the old balance sheet of some of its debt and to finance ongoing operations. The business produces modified and unmodified starch, powdered glucose and agri-products in four mills, processing close on a million tons of mealies a year. Next up, Tiger Brands is celebrating the centenary of its venerable Jungle Oats business with the opening of a state of the art mill in Maitland to supplement the output of its existing factory, also in Maitland. The new mill offers improved output and increased efficiencies, as well as reduced manufacturing costs and food waste. What it does not offer is windows: of those, it has none, relying instead on a computerised air management system. And the great thing is the whole place can be operated remotely via – anyone? – yes! An app. Although it does employ 180 new staff, and provides revenues for small local farmers through a supplier development programme.

Comment: That’s the way, Tiger. A feel-good story from the Striped One, at last.

What to expect from Covid-19, the coronavirus? With almost 100,000 cases at time of writing, this epidemic is on the verge of becoming a pandemic, and is depressing expectations for global economic growth for the year. In the US, the Federal Reserve has announced a -0.5% drop in the lending rate, to shore the economy up against the slowdown to come. Back here in the Beloved Country, where one case has been reported, we don’t have the wherewithal to make such provisions. Disruptions relating to supply chain restrictions, reduced travel and factory closures might be expected should things get bad. Worst at risk are of course the travel and related industries, and small to medium enterprises with no backup resources in the case of closure.

Comment: As of Wednesday, the economy has gone into a technical recession. An outbreak of the Coronavirus here is not what we need.