There’s a cottage industry emerging in law arguing the merits as to what exactly constitutes an essential service and what does not. Case in point, Woolies, which briefed its attorneys Webber Wentzel to provide an opinion on whether or not the Dapper One should continue to sell hot food. According to WW, (the lawyers, not the retailer) rotisserie chicken and those very delicious pies are ‘vitally important to many Woolworths consumers’; this notwithstanding Woolies has decided to suspend the service for the moment. As you know, the government put the kibosh on sales of hot food on April 16. Clicks has announced that it will be providing free primary healthcare services like temperature, blood pressure, cholesterol and glucose screenings for the next six weeks, providing relief for a healthcare system that needs to marshal its resources for COVID-19, and punters who currently can’t afford even the basics. In a piece of really bad news, 24 employees at Dis-Chem’s Retail Park branch in Boksburg have tested positive for the virus. They’ve deep cleaned the store and opened up with a completely new staff complement. Then there’s also been Cambridge Food, Albany and Unilever (and we’ve no doubt missed some others) who have all closed stores or plants in varying measures due to the virus taking hold. Massmart’s board and executive committee will personally fund, through a waiver of a portion of their monthly take home, 230 tonnes of food for distribution to vulnerable communities through FoodForward South Africa, over a period of three months. And finally, in the Strand, a group of independent Somali retailers has teamed up with local businesses to deliver R50,000 worth of groceries to 400 families in need, demonstrating that there is room for essential works at every scale

Comment: Terrible news our businesses succumbing to the virus and a timely reminder of the real dangers for the frontline workers in our industry.

Some moderately good news from Massmart at a time when the business could really use some. In a trading update they reported that sales for the quarter through March were up +1.3% YoY to R22bn, with like-store sales up a more muted +0.6%. This on the back of a terrible 2019, in which the business recorded its first ever loss of R861m in the face of deteriorating conditions for consumers and the underperformance of DionWired, now no more. Chair Kuseni Dlamini remains sanguine, however. “The board is confident that with a clear turnaround plan in place, driven by an experienced leadership team, Massmart’s prospects will improve,” he writes in a letter to shareholders. And indeed, the arrival of a decisive Mitch Slape seems to have got the ball rolling on a turnaround.

Comment: Although, through absolutely no fault of their own, the timing for this turnaround could be better.

Research outfit McKinsey has published a paper chock full of good advice for retailers seeking to survive the current scourge and grow their businesses beyond it. One section of the report – Transform your business model to ensure that it is tech enabled and future proof – is particularly salient. Inter alia, the sharp Suited Ones advise that stores should be rendered cashless or as close as possible, with seamless checkout, that technology including machine learning should be deployed in the supply chain to reduce the labour burden, that merchandisers are supplied with the tech to run their categories as remotely as possible, that investments be ramped up in e-commerce, and that Head Office be optimised for work from home.

Comment: Whew. Lots to get the old head around, but much in there that many retailers were heading towards anyway. Sometimes a crisis provides the necessary acceleration.

Word from Tesco is that the average punter is cooking 17-21 meals at home these days, up from the more, modest pre-COVID levels of 4-6 per week. And interestingly, these would-be Olivers and Ramseys are not resenting the extra workload, far from it, with 89% saying that they’ll carry on cooking more at home even when the shutdown is a distant memory. Jumping on the bandwagon, Tesco have launched a multi-media campaign encouraging people to create and dedicate a special dish to a loved one and share it on social media, using the hashtag #FoodLoveStories, with the results profiled on an ITV show. On a more pragmatic note, across the pond, Walmart has implemented a number of safety measures at all of its stores, including Plexiglas barriers at checkout lanes, floor decals for safe distancing, temperature checks for employees, compulsory face masks for employees and contact-free key services such as payment and pickup and delivery.

Comment: Draconian, but pretty standard in these difficult times.

Tough times globally for AB InBev which hasn’t exactly bet the farm (as it’s a truly enormous farm) on premium beers but is certainly bringing a lot more of them to market than it used to. And as hipster bars close their doors on at least six continents, sales of premium beers – heck, of all beers – is way down. Other issues for the brewing giant include the vast pile of debt the business accumulated with the $100bn acquisition of SABMiller back in the one six, and the weakness of various developing country currencies, like the Brazilian real, the Mexican peso and the dear old ZAR, bearing in mind that the business derives 60% of its profits from economies like these. So, discretion being the better part of valour, AB InBev has decided to halve the dividend, saving a billion dollars which will be re-routed from shareholders to creditors, and putting the business in a stronger position when the bars open again.

Comment: Hard times, hard decisions.

A nuanced look at increased sales driven by the global pandemic from Unilever, which since the stewardship of Paul Polman has shown that a global FMCG giant can focus on more than just the bottom line, and that it’s willing to communicate with consumers just as if they were intelligent adults. So while some categories like essential food items and hygiene products have seen an uptick in sales in recent weeks, other categories like ice cream and restaurant products have taken a big hit, and the net result is a reduction in revenue. However, says CEO Alan Jope, “Unilever is not a bad place to be right now. Our portfolio is the type of basic products that people need. We have got a conservative financial picture and our balance sheet shows great strength.” The bump from stockpiling (and one assumed, the associated downturn in sales once everyone had what they thought they needed) was apparently only a factor in the US, land of the brave and home of the paranoid.

Comment: A balanced portfolio is probably the best protection against this pandemic and future crises.

According to consumer credit reporting agency TransUnion, almost eight in ten South Africans report that their household income has been cut by the COVID epidemic, and one in ten have lost their jobs already, for an expected rise in unemployment of a million people. The economy is projected to shrink -8% to -10% in 2020, with a return to normal economic activity expected only in 2021 (and remember, the old normal was not all that, either). On the upside, South Africa has world-beating infrastructure in place for widespread cash payments. Among the sources from which the Government is seeking funding are the New Development Bank ($1bn according to sources), the World Bank ($60m of COVID funding) and the IMF (for an unspecified amount, strictly for COVID-related projects).

Comment: Fortunately, our government is not approaching these monstrous challenges with the wishful thinking, bluster and denialism of some of the more developed economies.