A couple of weeks ago we reported on Shoprite’s trading update for the year through June; here are the actual results: turnover up +8.1% to R168.0bn in the toughest conditions anyone can remember, with trading profit climbing +24.9% to R10.3bn, and margin growing to 6.1% from 5.3%. This performance, they say, resulted from a shift in the sales mix, pleasing growth at Checkers as it increases its foothold at the upper end of the market, system-supported collaboration across the corporate teams that drove improved buying, more effective promos due to the reach achieved and data harvested through the Xtra Savings programme, and ongoing improvements in supply chain efficiency. “We are very optimistic about our opportunities in digital as well as our customer momentum while we have the focus to become Africa’s number one retailer in terms of accessibility, affordability and innovation,” says CEO Pieter Engelbrecht.

Comment: With the growing impact of the Shoprite X lab on the business, more of the same can be expected. And for more on these results, please click here.

Green of logo, and of ambition, SPAR is on a mission to eliminate problematic and unnecessary plastic, and to design new packaging that is recyclable or reusable. To this end, it’s going hard after its extensive private label lines, with a short-term focus on the 10 categories that deliver 80% of SPAR’s house brand volumes. “The two-litre milk cartons used for extra shelf-life milk are 100% recyclable and made from 87% renewably sourced material,” explains SPAR, who is committed to having 100% of plastic packaging which is reusable, recyclable, or compostable by 2025. As a founding members of the South African Plastics Pact, SPAR is committed to the creation of a circular economy that drives investment in infrastructure, supports livelihoods and keeps our environment plastic free. In other news, SPAR is also pioneering a non-toxic, odourless, eco-friendly firelighter made from rhino dung.

Comment: Powerful stuff – retailers like SPAR are taking bold and increasingly meaningful steps to reduce their environmental impact, and packaging suppliers would do well to help them achieve this.

There was a time when we’d corral all the shorter news items of the week together under a piece we called the roundup, and such stories being in plentiful supply this week, we thought we’d revisit the format. So here goes: As you will recall, Pick n Pay acquired the country’s first liquor licence for a forecourt some weeks back, at its Pick n Pay Express at the Radiokop BP in Westrand, where it stocks a modest range of wine. The Southern African Alcohol Policy Alliance South Africa (SAAPA SA) is less than amused about it, however, and has called for a halt to sales before the inevitable rollout. Dis-Chem has done its first major BEE transaction, with the sale of a healthy 10% of the business to Royal Bafokeng and the Black Panther consortium, among other BEE groups, and has agreed to fast-track greater diversity across the business too. And finally, Checkers Sixty60 has created 2,870 new jobs since it launched in late 2019, a small but significant and growing slice of the total of 144,844 employees.

Comment: So there you have it. We’ll be watching the developments at Pick n Pay Express stores with interest.

In the UK, the analysts are awakening from the long torpor of summer with its county cricket and its flabby cucumber sandwiches, and have taken to speculation. “Who’s the next takeover target?” they are asking each other. The asset managers have been quicker off the mark, and are eying Tesco, apparently, which despite its exorbitant £19.8bn valuation might be right for a takeover they say, pointing to its leaner model after the disposal of its Polish and Asian assets, to its strong private label offering, and to its inviting Clubcard loyalty programme. Carrefour has opened a new checkout-free store, the region’s first such emporium, Carrefour City+, in Dubai’s Mall of the Emirates. And in Bentonville, Arkansas, Walmart has apparently expressed satisfaction with the trajectory of the Massmart turnaround back here in the Beloved Country and has decided to stay the course for now. This according to Mitch Slape himself.

Comment: Good news from the Big Feller, and for South African retail generally.

Let’s have a look at those RCL FOODS results, shall we? Revenue at the business formerly known as Rainbow was up +14% to R31.7bn for the year through June, with profit after tax up +3.8% to a little under a billion. This it attributes to strong performances in the Sugar and Baking business units, continued strong delivery in Grocery, and greater efficiencies and new business after the acquisition of Imperial Cold Chain (ICL) business last year. The Chicken division’s results continue to be negatively impacted by breed performance challenges, significant raw material cost increases, and the lingering impacts of the initial COVID-19 lockdown, compounded by Avian Influenza and Salmonella Enteritis. Chicken remains a dicey business: to further dilute its influence on the bottom line, and to get into a growing sector, RCL entered the plant-based protein category in 2020, via an investment in a minority shareholding in the newly established LIVEKINDLY Collective (LKC).

Comment: Very nice. Nicer still if businesses reported more transparently on trading profit, which we prefer to the more confusing HEPS everyone seems to favour these days.

Results season roars on, and next up to bat with its interims is Libstar, bringers to market of Denny, Lancewood, Goldcrest, and Easyclean, inter alia, as well as private label brands for all of the major retailers locally, and interestingly, the incomparable Trader Joe’s in the US. Anyway: Group revenue up +8.7% to R5.12bn, with growth in food of +10.5%, and the much smaller home and personal care category down by -9.6%. Gross profit margin declined from 23.4% to 22.0%, impacted by rising input costs and food inflation of 6%, up from around 4.25% last year. “We are well positioned to weather the current economic climate,” says CEO Andries van Rensburg. “Our decentralised model and culture of entrepreneurship and innovation enable us to respond with agility to changing consumer habits. The ongoing focus on new product development to meet consumer lifestyle trends is evidenced in the 316 new and renovated products launched during the reporting period.”

Comment: Some challenges, but a solid business. The link to Trader Joe’s – one of the world’s most innovative retailers and a champion of brilliantly executed private label – is particularly interesting.

Good news? More like a crashing indictment, if you ask the swelling ranks of SA’s unemployed. According to StatsSA, rebasing the number off the year 2015 according to global best practice, South Africa is the 36th wealthiest country in the world, with GDP of $335.2bn. The economy grew +1.2% in the second quarter, the fourth straight quarter of growth, although the economy remains 1.4% smaller compared to pre-COVID. Growth during the period was driven by the transport, storage and communication industry, which increased by +6.9%, by the personal services industry at +2.5%, and by the trade, catering, and accommodation industry at +2.2%. Household final consumption expenditure (HFCE) increased by +0.5% in the second quarter, with an increase in spending on food and non-alcoholic beverages of +1.7%, behind both transport and health. Related: According to Nedbank, the areas of greatest uncertainty – and thus, perhaps opportunity – for the economy in the months and years ahead are around the future trajectory of COVID-19, the ongoing contribution of exports to growth, the ability of the government to accelerate solutions to the energy situation, Government expenditure on infrastructure projects, and inflation.

Comment: Challenges, yes. But this is not a picture of final economic decline, by any measure.