A couple of weeks ago we mentioned in an offhand way that Massmart’s Game was closing its operations in “West and East Africa”, two vast and not even necessarily contiguous regions. Let’s get a little more specific shall we: Massmart is divesting itself of five Games in Nigeria, four in Ghana, two in Kenya and one each in Tanzania and Uganda. The business will be represented in Kenya by a single Builders store in Nairobi. Interestingly, Shoprite has also said it will be divesting more of its East African stores – namely its five branches in Uganda and 10 in Madagascar. This leaves it without a single store in the region, having sold its Tanzanian assets to Nakumatt in 2014, and exited the Kenyan market in early 2021. Both businesses have given currency devaluations, high inflation and lower commodity prices as the reasons for their retreat from the regions in question.

Comment: This, to us, looks like a lose-lose scenario. There is no doubt that these markets would benefit from the vibrance and value of modern retail in some suitable form or another. And our retailers, constrained and consolidated at home, need somewhere to grow.

The independent trade in South Africa – consisting of unlisted, but formally structured wholesalers and retailers – has undergone great changes in the past five to ten years. Due to channel blurring, formal independents have evolved dramatically with the inclusion of hybrid store formats which combine both wholesale and retail offerings to cater to multiple customer experiences and shopper segments, from traders to consumers. These stores cater to varied retail consumers, who shop with smaller baskets or trolleys, compared with bulk buying by a spaza trader, for example, and demand quality products at affordable prices. To support the needs and demands of this ‘new’ shopper, formal independent wholesalers and retailers are tapping into trends such as the rise in private label products and have even started to manufacture and sell their own private label goods and confined brands within their outlets.

Comment: On October 19 and 20, Trade Intelligence and some of our partners will be sharing knowledge on how to effectively reach South Africa’s independent retailers and wholesalers at our annual Independent Trade Forum – click here for details.

While here in the Beloved Country food remains the darling of the Woolies shopper and the analyst alike, in Mauritius they like the other stuff, with six fashion, beauty and homeware-only stores in that island paradise. Now Woolies is launching its online delivery service for these goodies serviced by the Bagatelle store, with a 48-hour turnaround. And speaking of launches: a year ago, you will recall, Dis-Chem acquired the entirety of Baby City for a cool R430m. Now, in a move that will surely unnerve rival Clicks, it has opened its first three Baby City clinics – one in Joburg and the other two in Cape Town, offering both ante- and post-natal clinic services, and plans are to roll the concept out in all 35 Baby City stores around the country. And speaking of Clicks – a trading update, about which more in due course: sales for the year through August increased +10.2% across the Group, with retail health and beauty growing +8.3% and distribution up +12.3%, and diluted headline earnings per share (dHEPS) increasing somewhere between 0% and +3%, down from expectations of 8% to 13% as a result of the recent looting.

Comment: The Baby City acquisition may prove to be a stroke of genius on the part of this innovative and determined business.

In the US and A, Walmart has teamed up with online grocery delivery service Instacart to bring Walmart goodies to those blighted geographies where the Big Feller doesn’t have any stores., including Los Angeles, San Francisco, and, as of very recently, parts of New York City – but not Manhattan, which will have to go without. In the UK, in the meantime, Winner of All Lockdowns Ocado now has to earn a crust in a world that can go to the shops again, leaving its regiments of killer robots with a worrying amount of time on their hands. The plan is to sell its pioneering robot warehouse technology to other grocers around the world, through its Ocado Solutions business, which has already struck deals with Kroger in the US, Aeon in Japan and now Auchan in Spain. Also in the UK, Tesco has launched a trial of reusable packaging for food, drink, household and beauty products as part of its drive to cut single-use plastics from its supply chain. Products include Persil laundry detergent, Coca-Cola, and Tetley Tea, as well as 35 Tesco private label lines, such as pasta, rice, sugar and oil.

Comment: Essential and ground-breaking stuff from Tesco. Which major South African retailer will be the first to jump in?

Anglovaal Industries Limited (traditionally pronounced in the plummy tones of one enjoying their second post dinner brandy at the Illovo in 1973) has released a pleasing set of results for the year through June. Sales were up +0.5% to R13.3bn driven mainly by increased volumes at I&J and by higher prices across the Group. Sales of snacks and beverages were particularly brisk during the hard lockdown but have evened out in recent months. At the same time though, sales at its fashion, fragrance and beauty brands picked up as restrictions eased and people got out of their grey sweatpants. Next year, they say, performance will be a function of consumer demand, competitor activity and management of selling prices in the context of higher input costs – with the latter of concern for all suppliers in this tricky ambit.

Comment: A solid business, a solid performance in a very challenging time.

Big shakeup coming down at the business formerly known as Rainbow Chicken. RCL FOODS has let it be known that it will be unbundling its chicken, sugar and logistics businesses with a view to listing or disposing of them or entering them into JVs in 2022. Accordingly, it has decided to beef up its FMCG division through acquisitions and separate its chicken, sugar and Vector Logistics businesses into distinct legal entities to keep things tidy. “Each of those businesses are rightful leaders in their industries and we just think that they would do better in a different environment not under our umbrella,” says CFO Rob Field. Chicken, under a new management team, is already a stand-alone. The recent JV with plant-based protein outfit LIVEKINDLY is perhaps a taste of what’s to come, and allows RCL to grow the Oumph!, Fry’s, LikeMeat and No Meat brands into Africa.

Comment: Putting some distance between the underperforming poultry wing and the more successful divisions seems like a good move.

A couple of conflicting trends down on the farm this week. One, a recent Essential Food Pricing Monitoring report from the Competition Commission has established that the number of farmers in South Africa is in rapid decline, with two thirds fewer dairy farmers, for example, than there were in 2014. Small-scale and emerging farmers have been particularly hard hit by poor yields and low productivity, says the report, and have struggled to grow their operations with limited access to finance, infrastructure and routes to market. Interestingly, though, COVID has exposed the vulnerabilities in corporate agriculture and its supply chains, giving urban and small-scale farming a chance to step up. And the industry has enjoyed a robust harvest of summer grain and oilseed crops, good commodity prices, record high agribusiness confidence, and strong exports. South Africa recorded an agriculture trade surplus of US$1.5m for the second quarter, 40% ahead of the same period last year.

Comment: Green shoots in the fallow fields, it seems. Our food production system is in a state of rapid evolution globally.