
THIS ISSUE: 29 Apr - 07 May
A grim week in the Beloved Country, with hunger and uncertainty in many homes and an economy looking increasingly ruinous. But there are tiny glimmers of what we must call hope: a SPAR in Cape Town overturning the rules of the free market in defence of its smaller competitors, and an act of courage and principle from an executive at Amazon. A resilient economy, we are fast learning, is an inclusive economy. This is an important lesson we must take away from COVID-19 as one day we start to rebuild. In the meantime, kindness and charity, both corporate and individual, will be our protection. Enjoy the read.
RETAILERS AND WHOLESALERS
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Coronavirus Shut shop
Shoprite have announced – with the admirable transparency we’re seeing from most businesses during this time – that 17 of their Western Cape stores have been closed after employees tested positive for COVID-19, following strict protocols that include the deep cleaning of affected stores. The Group was put under some pressure to close the stores by employees themselves. In Durban, Pick n Pay’s iconic Musgrave Centre store was closed in an abundance of caution after an employee fell ill with a non-COVID condition and sadly passed away. Back to the Cape, where the Palm Grove SPAR has broken capitalism itself by closing some of its departments and suggesting that punters go instead for those necessities to smaller local businesses. Stationery, for example: rather support “Hein and his team at PenCafe Stationers.” Nationwide, the Jolly Green one are placing trolleys outside each store for the #SPARdonate challenge, asking shoppers to donate a six-pack of eggs, 1 kilogram of maize and 1 litre of milk to the most vulnerable of South Africans. Also in the Cape, Woolies are partnering with Infinity Culinary Training (ICT) to serve around 1,000 nutritious meals per day from the product development kitchen to Cape Town’s most vulnerable communities.
Comment: OK we’re tired and emotional, but sitting here with tears in our eyes at these acts of human decency by our big retailers.
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Clicks Peace and Queues
Pretty thin news week on the retail front so we’re going to slip this in as if it’s not a COVID-19 story, which it semi-is. Anyways. Couple years back, Clicks started pioneering a queue management system called Virtual Queue for dispensary patients, allowing them to check in, maintain their place in line and receive notification via SMS when their turn arrived for service, taking some of the frustration out of the process for punters and, not coincidentally, allowing them to shop for cosmetics and small appliances in the gleaming aisles while they waited. Now of course, the system has taken on new significance. Scott Matthews, Head of Moving Tactics Retail Analytics, which supplies the tech: “In our current health emergency, it has been integral in enabling social distancing within their pharmacy areas, where there is the greatest need for social distancing.”
Comment: And no doubt, many of the innovations our current crisis has spawned will be repurposed for the opportunities and challenges that the new norm will bring.
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International Retailers Amazon grace
Four years ago, (you would have laughed then, had you known) Tesco ran a ‘Doomsday Exercise’ in which it gamed out the total closure of its head office, because of, we don’t know, an asteroid strike or global pandemic or something? Four years down the line, what with only 30 staff out of a possible 6,500 pitching up daily at HQ, they’re very glad they did. As a result, they had the toolbox when they needed it: the bandwidth they needed for Zoom conflabs, and a plan to help feed a hungry nation when shutdown arrived. Sainsbury’s in the meantime, are doing some planning of their own, for disruptions to business as usual which will last through September, they believe. Across the pond, in the meantime, Walmart has introduced two-hour express deliveries for hungry Yanks. And at Amazon, Tim Bray, a vice president and senior engineer at Amazon Web Services has resigned his position in protest against the firing of several employees that protested workplace conditions at warehouses amid the coronavirus pandemic. “Firing whistle-blowers isn’t just a side-effect of macroeconomic forces, nor is it intrinsic to the function of free markets,” he thundered. “It’s evidence of a vein of toxicity running through the company culture. I choose neither to serve nor drink that poison.”
Comment: A rare and principled stand.
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RCL FOODS Going postal
OK we’ve been avoiding addressing this one for a while to be frank, and now the post office has got involved. In summary: back in March, RCL FOODS said it had agreed to repurchase around 14.5 million shares from various shareholders including CEO Miles Dally and CFO Robert Field, who were awarded stock under the company’s Conditional Share Plan (CSP) the previous year, in a transaction valued at about R149m. Eyebrows were raised: the deal allowed the sellers to sell their shares despite the lack of liquidity in the stock, and there was concern that Remgro, which owns 71% of the company’s stock, could push through the transaction. Remgro have accordingly said they will abstain from voting on the deal at the AGM, but also indicated that if the resolution to buy the stock isn’t passed at that august symposium, they’ll buy it off Dally and Co. anyway. And now RCL FOODS have let it be known that a circular to shareholders seeking approval for the buyback has been delayed due to COVID-19 and the continued lockdown on SA’s postal services. RCL FOODS are making alternative arrangements to get the missive into the necessary hands.
Comment: Got that? Us neither.
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British American Tobacco Where there’s smoke
Back in the day – bear with us here – we used to watch the long black cigarette boats leave Gibraltar, throaty engines thrumming in the dusk, on their way to Algeciras, just across the Bay, with illicit cargoes of duty-free smokes for the black market in Spain. All by way of saying that there has always been something a little reckless and swashbuckling about the industry, and under the current state of prohibition in the Beloved Country, this is particularly the case. And so, while FITA and BAT ready themselves to challenge the overturning of President Rampahosa’s lifting of the ban on cigarettes, fleets of unmarked trucks are massing on our borders, full of Belton & Hudges and Marnberry Lights, all destined for the deprived lungs of SA’s nicotine-addicted. The black market is in overdrive, with cartons going for R900+, and containers for a cool – and a positively mentholated – R30m. And don’t even talk to us about the relative perils of the toxic impostors.
Comment: Seriously, don’t. We’re down to our last quarter pack of Stuyvesant Extra Mild, with nothing but a week old half-bottle of Nederburg Baronne to wash it down.
TRADE ENVIRONMENT
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Employment The devil’s arithmetic
The news that has us all reeling this week is that the COVID-19 pandemic may leave 3 to 7 million South Africans jobless – out of a possible 16.4 million who had jobs at the start of the crisis. This against an earlier estimate by the Reserve Bank that around 370,000 jobs would be lost to the virus during the initial 21-day lockdown. The treasury estimates that about one-third of South Africa’s productive economic resources are now idle, and that real time economic data – like average daily transaction values – have more than halved. As it stands, the Unemployment Insurance Fund has paid out just over R3.3bn to people who have lost their livelihoods as a result of the virus: claims have been filed on behalf of 1.75 million employees so far. The Government continues to catch flak for the pace at which it is disbursing the R40bn set aside for the purpose.
Comment: South Africa’s social and economic fabric is under terrible stress. There has never been a more urgent moment for government, business and labour to come together to discuss how best it can be strengthened.

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“If you destroy a free market, you create a black market.”
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