Them Woolies results this week, and not too shabby either (have a look at our summary here). Turnover was up +9.1% YOY for the 12 months through June to R78.8bn, (including concession sales: +9.7% to R85.9bn, with growth +5.9% in constant currency), and operating profit growing a positively barnstorming +44.5% to R6.9bn. Online sales grew +117.9%, contributing 2.3% to South African Food sales, which grew +7.4% here in South Africa, to R37.7bn while sales in Fashion, Beauty and Home grew just +3.5% to R12.9bn. Unsurprisingly, perhaps, Woolies has announced plans to reduce the floor space in this underperforming business by -11% of its 2019 area. “Sustaining the momentum of our Foods business is key to our success,” says CEO Roy Bagattini. “Critical to this is a deep understanding of our customer and our ability to deliver a world-class experience, underpinned by our commitment to quality and sustainability, but also to critical back-end capabilities.” In other Woolies news, South Africa CEO Zyda Rylands is taking early retirement from the position at the end of September, and with it the role she occupies, as part of the Group’s ongoing streamlining efforts. She has, however, agreed to defer her departure and will head Woolworths Food until she leaves in 2024.

Comment: A sad loss to our industry, which suffers an ongoing dearth of women in senior leadership positions.

More on those Massmart interims, to which we alluded last week, and of which you can find a handy summary here. Group sales for the 26 weeks through June rose +4.4% to R41.3bn, with trading profit (including discontinued operations) up a deceptively barnstorming +266.6% to R444.2m. This was driven, they say, by growth in profit before interest and tax (PBIT) increases at Builders of +184% and at Massmart Wholesale of +70%, as well as the positive impact of turnaround interventions, including improved gross profit margins and delivery. Last week we reported on the pending sale of its underperforming food assets to Shoprite; another area of interest is the turnaround strategy at Game. The business piloted its first ‘Game Reimagined’ store in the Mall of Africa in September last year, started rollout of the programme in February this year and has refurbed 64 stores since, reporting double-digit growth in basket size and an average +13% increase in comparative sales growth at these locations. Massmart has also announced that it will be closing all 14 of its Game stores in West and East Africa.

Comment: Massmart’s leaner model seems geared for success in these more straitened times. Suppliers would do well to acquaint themselves with the constraints and opportunities this brings.

E-commerce is estimated to be worth as much as 5.6% of South Africa’s total retail market right now – but much of this value is being squandered, according to the latest SA Digital Customer Experience Report. The survey by the online polling community ovatoyou and digital marketing agency Rogerwilco found that glitches in online merchants’ trustworthiness, ease-of-use, security, delivery and after-sales support are estimated to cost them almost R12bn in lost sales every year. “A staggering 96% of respondents said they would spend more online if e-tailers’ customer experience was better,” says ovatoyou. An additional R20bn is tied up in the digital equivalent of abandoning your trolley in aisle three, where shoppers do not go all the way to checkout with their orders, citing high delivery fees or long delivery times as major reasons for this. World Wide Worx estimate e-commerce sales in SA at R30bn per annum, while Deloitte put it closer to R40bn.

Comment: For a deeper understanding of e-commerce in our own great industry, have a look at the Trade Intelligence e-commerce report here.

Spreading the love, and indeed the profit his week, is Walmart, which has announced the launch of a delivery service called GoLocal that will deliver goods from other local retailers to customers, deploying a fleet that will include technologies such as self-driving vehicles and drones, and operating through a combination of associates, gig workers and even other delivery companies. In the UK, speaking of delivery, the driver shortage is threatening Christmas itself. An estimated 100,000 jobs remain open as retailers prepare for the busy holiday trading period, with shortages showing up on the shelves even now. UK retailers are doing their best to mitigate the unfolding crisis, with Tesco offering lorry drivers a £1,000 joining bonus. And having disrupted the US electoral system, Russia are looking to do the same to grocery retail: Mere, Russia’s answer to Aldi and Lidl, self-proclaimed fastest-growing discounter in Europe, is looking at launching in the US, with initial sites in Georgia and Alabama.

Comment: The rise of the no-frills discounter remains one of the biggest stories of the last ten years.

Distell and Heineken are perhaps within a month of the conclusion of their discussions regarding the disposal of the former to the latter for a healthy consideration, and out of a surfeit of caution, and according to the terms of the negotiations, Distell have declined to provide the punters with the customary dividend. This despite some very nice results, marking a return to almost pre-pandemic levels: Group revenue was up +26.3% YOY to R28.3bn for the six months through June, and earnings positively catapulted heavenward, by +99.8% to R3.8bn. It has been suggested by certain gimlet-eyed analysts that the reason for Distell’s willingness to accept some fairly stringent terms from Heineken is that controlling shareholder Remgro had approached Heineken with an offer to sell rather than vice versa.

Comment: On the one hand, a shame to see a great South African business in foreign hands. On the other, a vote of confidence from abroad in our businesses and our economy.

Tiger Brands was one of the first South African businesses to explore the potential of the frankly chaotic Nigerian market, and now it seems it will be one of the last out. It is leaving the country with the expected conclusion in September of the sales of its 49% holding in UAC Foods to parent company UAC. Tiger entered into a JV with UAC in 2011 to manufacture and distribute some sausage, ice cream and water brands. In 2015, you will recall, the Striped One exited its investment in Dangote Flour to Nigerian parent Dangote Industries, three years after buying it. Two months ago, Shoprite also disposed of its assets in that challenging geography to Nigerian investors. Nigeria has been a particularly difficult market in recent years, with economic weakness suppressing consumer demand, input cost increases cutting cut into margins, and currency volatility eroding profits. However, the country has recently emerged from recession, and grew its economy 5% in the second quarter.

Comment: The challenges of Nigeria have proven too great for even the most long-sighted and pragmatic businesses. There may come a time when it provides a more welcoming environment for South African businesses, but that time is not now.

This week’s economic headlines are all about how we’re backed into a corner. Or more resilient than expected. Burdened by the fallout of the July Rebellion, or bouncing back from COVID. Immiserated by taxation, but hobbled by a shrinking tax base. It’s a rollercoaster being us right now, no mistake. Amid the confusion, there is, well, more confusion. For example, StatsSA has delivered the apparently wonderful news that at R5.52tr in 2020, the economy is +11% bigger than previously. Hold your horses there though – this apparent growth results from a change in which GDP is calculated, rather than the discovery of a stockpile of change in the cushions of the national sofa. It is however true that the economy has performed better in its recovery from the initial shocks of COVID-19 than expected – admittedly off a very low base. “One reason there’s been a degree of resilience is that, unlike previous crises, where the financial sector was the genesis of the crisis, in this case the financial sector has contributed positively towards stabilising household income and stabilising firms’ incomes,” says deputy Reserve Bank governor Kuben Naidoo.

Comment: Turbid waters indeed. But it’s still possible to swim in them, at least for some.