18-week trading updates are all the rage these days, so here’s one from Pick n Pay, through the beginning of July. Sales, they say, were up +10.7% YoY for the period, with internal inflation running at a brisk +5%. The big story – as we mentioned last week – was that clothing sales were up +17.1%. The Group has also released some pretty illuminating market share numbers – it estimates that it currently controls 16% of an R628bn formal grocery market, with a 23% share of the spend of more affluent shoppers, 27% of the middle-income market and 11% of South Africa’s less affluent. It’s at the upper and lower end it’s concentrating its current efforts. Its new Crafted Collection private brand and the in-store innovations highlighted in flagship stores are aimed squarely at the market currently claimed by Woolies and Checkers FreshX, while Boxer Superstores is planning to open 61 new stores in the current FY.

Comment: In a consolidated market like this, it is inevitable that the retailers hone their competitive efforts in the segments where they see growth potential.

Woolworths and Shoprite also released some numbers last week, ahead of their annual results due out at the end of this month in the case of the former and the beginning of the next in the case of the latter. First up, Woolies expects that Group turnover will grow +1.4% for the year, impacted severely by lockdowns in Australia and the civil unrest in South Africa. The second half was better than the first, though, with growth of +4.9% as restrictions eased. Food is coming in +4.2% for the year with online sales, accounting for 3.2% of total food, up +45.5%. Shoprite, in the meantime, is looking at turnover growth of +11.9% for the Group, with South African supermarkets up +12.6%. Even taking into account the impact of the unrest, sales from its LiquorShop offering were up a staggering +44.5%, despite 48 lost trading days, and 117 net new supermarkets were opened in the Beloved Country for the period.

Comment: Very much a tale of two retailers there, suggesting that the upper end might be softening and is certainly becoming a more contested space for Woolies. And that currently, there is no stopping Shoprite.

Having achieved enormous success with its Petshop Science retail brand – opening 22 stores in a year as the pet economy grows in both leaps and bounds – Shoprite is taking the offering online. Petshop Science Online offers a broad selection of more than 2,000 pet-related products, including food, treats, toys, and more from premium brands like Hills, Eukanuba, and Royal Canin. Proud pet parents will also be able to create online profiles for their pets, enabling PetShop Science to generate special offers tailored to their specific needs. Next up, Dis-Chem is stocking local and bringing the goodness of our continent to hungry shoppers in its partnership with Local Village Foods who bring to market such healthy continental foods as sorghum and teff (each available as both grain and flour), tiger nuts, bambara beans and dried hibiscus. In due course it will also be listing pasta and snack bars made from African ingredients. Finally, the Vukile Property Fund has bought the Pan Africa Shopping Centre in Alexandra township of Johannesburg for R669m from current owners the Pan Africa Development Company, which it says will strengthen its investment ties in South Africa.

Comment: The rise of the township mall – and the growing value of the asset class – is one of the undersung stories of the last couple of decades.

In the UK, Tesco and rival Asda have taken advantage of falling wholesale petrol prices to indulge in a price war, offering some of the reductions to punters in an attempt to gain their loyalty and, one presumes, their ancillary purchases. Asda started by cutting the price of unleaded by 9p per litre; Tesco responded by cutting their fuel prices by up to 6.5p per litre. Average prices are already down by 3.68p, so it’s a shrewd if not entirely munificent investment on the part of the rivals. Next, in further evidence that bricks and mortar retail still has a pulse, sales at Amazon’s retail stores, including Whole Foods Market, Amazon Fresh and Amazon Go, rose +12.5% in the second financial quarter, to just north of $4.7bn. Finally, in Kenya, Mauritian conglomerate IBL Group has brought a 30% stake in Naivas Supermarket, from the World Bank’s International Finance Corporation (IFC) and a private French fund. Naivas has 84 stores in 20 towns in Kenya and employs over 8,000 people.

Comment: : Next to South Africa, Kenya has the most advanced retail sector in sub-Saharan Africa. Expect some exciting news from Trade intelligence as we develop our understanding of this market.

A trading update from the stalwarts of Anglovaal Industries (AVI) Limited for the year through June 2022; let’s have a squizz at those digits, shall we? The consumer goods business (remember that they also, and quite delightfully, sell Jimmy Choos) grew revenue +4.3% in what we don’t have to tell you has been a tricky ambit. The business grew across all categories, except, perhaps predictably, I&J which was hit by lower catches, increased fuel costs and a stronger rand in its export markets. Personal Care absolutely shot the lights out in the second half, growing +17.7% with Footwear and Apparel not far behind at +14%. While the business struggled mightily to reduce costs, it sustained a minor drop in gross margin for the year. HEPS, however, considered a reliable indicator of profitability, are likely to increase by between 5% and 7% for the year.

Comment: A business which with its exposure across such diverse sectors provides an interesting snapshot of what’s driving the South African consumer in these difficult and confusing times.

Interim results from British American Tobacco (BAT), which grew revenue +3.7% globally to £12,8bn for the six months through June. New Categories (think vapes) was the star performer, growing +45%; the ominously named combustible category grew only +0.6%. More interims, this time from SAB parent AB InBev, which grew volumes globally by a modest +3.1% for the six months through June. Here in South Africa volumes grew in their low teens, with operations severely impacted by the flooding of the Prospecton brewery in Durban. Finally, in the US, talks have broken down between Ben & Jerry’s and its parent company Unilever over the sale of the ice cream maker’s Israeli business, which would allow its products in the occupied West Bank. Ben & Jerry’s said last year that it would end ice cream sales in Israeli-occupied Palestinian territories because such business was “inconsistent” with its values. Unilever has subsequently sold its Ben & Jerry’s business in Israel to local licensee Avi Zinger – a deal they say cannot be now undone, while supporting Ben & Jerry’s right to make its own decision about its social mission.

Comment: A dispute the likes of which we’ve never encountered, between a brand and its parent company.

In a move that will provide some relief to South African consumers, but which is likely to provoke howls of outrage from our already-embattled chicken producers, the government has announced that it will be dropping import duties for 12 months on chicken imports from Brazil, Denmark, Ireland, Poland and Spain. As you know, CPI hit 7.4% in June, the highest level since the global financial crisis, and food prices went up +9%. The price of chicken in the meantime, rose +14% for 10kg of frozen pieces according to the Household Affordability Index compiled by the Pietermaritzburg Economic Justice & Dignity Group, which has cemented itself as our most reliable resource for measuring the impact of macro-economic variables on ordinary South African households. Mexico and South Korea have also dropped tariffs in recent months, and the US is thinking of following suit.

Comment: Bit of a two-edged sword: the duties provide necessary protection for the local industry, which employs around 100,000 people.