Time for a peek, if you will, under the bonnet of investments, particularly the sort which keep Woolies ticking along in these troubled times. Investment outfit Allan Gray let it be known this week that on behalf of its better-shod clients it has upped its stake in Woolies to 20%, or 7 billions of rands. What gives, Al? Woolies, after all, has lost over half of its value these five years past, due mainly to its misadventures in the blasted Antipodes, and is, furthermore, the custodian of a debt-hole worth R12bn – in the midst of a global pandemic, moreover. Duncan Artus, Allan Gray’s new chief investment officer, points to the excellence of the South African food business, and believes that its other divisions are on track for more of the same. He even has confidence that David Jones is on course for a turnaround, and that the hands of Roy Bagattini are capable and steady.

Comment: Not to mention that the share is very attractively priced right about now….

Tough times for PnP, which issued a warning to the effect that first half profits for the 2021 financial year are likely to halve as a result of the fallout of COVID-19 – fallout which as you are aware includes restrictions on the sales of liquor and tobacco. 1,400 staff have taken a voluntary severance package since March as the Group cuts costs. “We have prudently and carefully preserved our cash through tight working capital management and a keen focus on critical capital and operational spend,” said CEO Richard Brasher, who was set to retire when the virus struck. He probably figured he was going to spend a lot of time stuck at home, getting in the way of the wife and kids and noodling around on the computer anyway, so might as well draw a pay check. And speaking of which, around a quarter of the punters at the recent shareholders’ Zoom jamboree voted against PnP’s executive pay policy. A couple more, and they would have triggered a JSE rule compelling the business to tackle their concerns.

Comment: Still – prudent moves it seems, in times which call for caution.

Just a week after Shoprite announced it would be upping sticks in Nigeria, it’s announced that it will be closing its City Mall store in Mombasa, Kenya, as part of a process of evaluating all of its operations across the continent, “based on current and future performance,” their words. Back home, in a trading update, the Big Red One let it be known that Group sales for the year through June had risen +6.4% to R156.9bn some change, with sales in its core South African business up +9.4% in the last three months of the fiscal year through June, even as customer visits declined by -7.4%. This may be attributable in part to their Sixty60 grocery app, which is apparently going great guns, currently operating from 87 stores around the Beloved Country – a rapid rollout considering it was running from just ten stores at the start of the lockdown, giving pause to rivals Woolies and PnP whose own online offerings are far more mature. Shoprite has also said it will be selling its DCs then leasing them back from the buyers, to free up cash in these straitened days.

Comment: With their typical blend of pragmatism and quick footwork, Shoprite seems to be riding out the current storm pretty well.

Very quick trading update from Clicks, more next week. The perennially defensive (in a good way) health and beauty business seems to be faring pretty well over the pandemic, with retail sales up +6.3% for the 23 weeks through 9 August, Group turnover up +10.2%, and online sales up “significantly”. UPD was as always a dependable performer, growing +11.4%. On the downside, social distancing and the wearing of masks have played merry hell with the spread of colds and flu, always a good source of over-the-counter revenue for the business, at this time of year, so our gain was, so to speak, their loss.

Comment: Still, one cannot have it all.

In the US, Walmart is bringing back a grand old American tradition, turning 150 of its vast parking lots into drive-in cinemas, showing a range of classics from the Wizard of Oz to Ghostbusters, with punters stretching out and tuning their dials to the soundtrack on FM radio, a step up from those clunky, crackly window-hanging speakers we knew as children in the family Cortina. In the UK, Tesco is being pressurised by Greenpeace and other activists to cut ties with their meat supplier JBS, which is responsible for deforestation in the Amazon – primarily caused by beef farming. And speaking of Amazon – the business, not the planetary oxygen supply without which we are all dead – Aldi is reaching out to tech start-ups that specialise in AI and computer vision to help it in its drive to establish an Amazon Go-style self-checkout system.

Comment: Red meat is a hopelessly inefficient and environmentally costly way to feed a planet. Perhaps it is time for it to be relegated to feast days and fancy restaurants, and priced accordingly.

Last week, you will recall, Heineken announced that it would be halting production and calling off development of its planned plant in KZN. This week, the country’s biggest brewer, South African Breweries (SAB) said that it was giving up on as much as R5bn in investment projects – R2.5bn this year, and the rest to be taken into consideration in 2021. Under the recent prohibitions, the business lost 12 weeks of trading, equivalent to 30% of annual production. The projects affected are part of SAB’s annual capital and infrastructure upgrades, and their cancellation will affect players in the entire supply chain, both up and downstream, including farmers and other raw material suppliers, tavern owners, and packaging and logistics companies. All told, the booze ban has cost the country an estimated 118,000 jobs with perhaps 84,000 more to come on the heels of the new ban.

Comment: This is not the time to be standing on principle. With no plan to replace this vital industry, the Government needs to let it trade.

In the midst of the pandemic, RCL FOODS has published “Six keys to deliver meaningful change through collaboration” a useful guide to making CSI initiatives more effective. The keys are based on RCL’s own initiatives, including their assistance for the 'Leave No Young Child Behind' programme and the '#DoMore4Hammarsdale' initiative, which yielded an almost 350% return on investment across its various food-growing and economic linkages projects in its first two years. The six keys are:

- Understand what government policy is and where opportunities exist for action

- Have a shared vision and stay focused

- Prioritise open communication to build trust between role players

- Place empowerment of local communities front and centre

- Involve employees and suppliers as essential partners

Comment: In this time of crisis, South Africa’s large companies are becoming part of a ‘shadow government’ in the area of humanitarian relief.

How do our prospects look for the rest of the year, anyone, anyone? Absa? “We believe the prospects of a relatively robust recovery in the second half of this year have dimmed, given the deteriorating global growth backdrop and the escalation of the COVID-19 pandemic domestically.” This according to senior economist Peter Worthington, who believes that greater inequality, rising poverty and greater indebtedness, compounded by global uncertainty, will depress our chances for a robust recovery this year. Absa also point to the impact of R38bn extra in public sector wages on our straining fiscus, predicting that the state will lose its court battle against unions over the stalled wage increase for their members. And 32% of CEOs surveyed by PwC have said they anticipate laying off staff in the next month, up from 18% just a month earlier.

Comment: The pandemic poses more questions than we are able to provide answers for at this point. Bottom line is we’ll be digging in for the foreseeable future.