Trade Intelligence Logo

The Clicks results are in for the year through August, and the punters seemed to like them, with a +5% jump in the old share price on the announcement. Group turnover was +6% to R39.6bn, while retail sales grew +11.7%. Operating profit increased +9.2% to R3.3bn, even as the business made record investments in new stores, new pharmacies, supply chain infrastructure and information technology over the period. And no Clicks results piece would be complete without a check in on its venerable but wildly popular loyalty programme: 9.7 million ClubCard shoppers now account for 80.2% of retail sales, and the programme grew by half a million souls this year. Great growth of +13.1% in the beauty and personal care category, to R8.3bn, and a solid performance in pharmacy, which grew +7.7% to R8.1bn. And if it’s growth you want… well, so does Clicks – it has upped its store growth target by a third and is looking for 40-50 new stores and pharmacies annually. “The Group’s strong performance despite challenges demonstrates the resilience of our business model, capability of our people, defensiveness of our core retail categories and strengths of our partnerships,” says CEO Bertina Engelbrecht

Comment: For more detail on those numbers, check out the solid work of our analysts right here.

At a time when dear old Mother Earth needs all the help she can get, and biodiversity finance is emerging as one of the most powerful tools to achieve this while making a buck, Woolies has partnered with Standard Bank to successfully launch the first sustainability-linked transactional deposit structure in South Africa. Basically, it links the interest Woolworths earns on its deposits to the achievement of Environmental, Social and Governance (ESG) targets, with a focus on increasing local sourcing of its fashion, beauty and home products, continued emphasis on sustainability attributes in food products and the reduction in electricity usage in corporate stores. Shoprite, in the meantime, has big plans for its Money Market Account, the subscriber base of which it plans to grow sixfold over the next five-odd years, to 15 million.

Comment: The lesson from Woolies is that businesses that embed sustainability into their operations are simply more attractive to financial institutions, who will incentivise them to keep up the good work.

Who will win the baby fight? Not a question we ask every week, but we’re pretty sure it won’t be mom and dad. In this case, however, we refer to the proliferation of baby stores among South Africa’s major retailers, with Clicks, Dis-Chem, Shoprite and Mr Price, who does not usually grace these pages, all opening standalone outlets. As things stand, the Clicks Group currently owns a bouncing 19.2% share in the baby category market, putting it comfortably ahead of the others. Moving on, Pick n Pay has been approved for listing on A2X Markets, the JSE’s younger, scrappier and also entirely unrelated cousin. “Our listing on A2X means Pick n Pay shareholders will now be able to benefit not only from increased liquidity, but from the cost savings accrued through A2X’s low-cost platform and narrower spreads,” explains Chairman Ackerman the Younger. The primary listing on the JSE will be unaffected by the move, which sees Pick n Pay pioneering A2X among the big grocery retailers. Finally, SPAR is upping its ready-to-eat game with the launch of its Fresh Convenience Food range, available through the Food Stall at SPAR, offering customers a variety of delicious meals and snacks they can simply heat, eat, and enjoy.

Comment: Interesting news re. Pick n Pay. We wonder if it has anything at all to do with the changes taking place in the business.

Amazon has officially landed in Belgium, with the launch of its site on the sought-after Amazon.com.be URL, the opening of a fulfilment centre in Antwerp and the establishment of its own independent courier network. A feature of the site is its ‘Brands of Belgium’ shop featuring local gear, which is launching with 100 Belgian companies and more expected to jump onboard. Over in the US, the plot thickens in the potential acquisition of Albertson’s by Kroger, on the news that a pair of Albertson’s jets were spotted parked at the Ahold Delhaize’s US base in early August. Ahold Delhaize is a Netherlands-based outfit which has made no secret of the fact that it is interested in acquisitions stateside. Any deal between it and Albertson’s would have the advantage for US legislators of creating a much smaller local entity than and Kroger-Albertson’s deal would. It would, however, catapult Ahold Delhaize into the slot of number two grocer in the actual world.

Comment: Re. Amazon – one imagines that a ‘Local is Lekker’ shop will be requisite when Amazon eventually launches here.

There was a time not so long ago when the health and wellness category of merchandise was regarded as luxury adjacent. Or at least borderline indulgent. No more. Since COVID-19, the focus of shoppers has re-oriented toward the category like never before, and they regard it as essential in supporting their healthier lifestyles. The South African wellness, health and personal care market – even in a context of scarce raw materials and high inflation – saw growth of 11.4% YoY this year, of which personal care contributes R31bn, while the health care category contributes R13bn. Globally, the health and wellness market reached a value of US$3,294bn in 2021 and is expected to reach over US$4,277bn by 2027. And if you’ll forgive us for waxing anecdotal, the endless spa days and treatment sessions of our tween daughter, her friends, and the people they follow on TikTok suggest that this trend, well, might have legs.

Comment: For more on this critical trend, have a look at this story by our analysts.

Nestlé has appointed Nicole Roos as the Managing Director for East and Southern Africa Region (ESAR). She’s currently the Business Executive Officer (BEO) for Coffee and Beverages and will the first female Managing Director for the region, a historic appointment for the business. Moving on. Rooibos is having a moment, and perhaps more than that: the youth of the country voted it as the second-best hot beverage in the 2022 Sunday Times GenNext Survey, just after Starbucks Coffee. No surprise for our friends over at Joekels who saw the opportunity back in 2000 when they launched their Laager Tea4Kidz brand, still going strong today. Moving abroad, Red Bull founder and branding genius Dietrich Mateschitz died on Saturday aged 78. The world of all night parties and extreme sports is all the poorer for his passing.

Comment: Perhaps more than anyone before him and few since, Mateschitz understood the power and possibilities of a brand, and had the courage to follow them wherever they led.

Rumours of the demise of shopping malls have been greatly exaggerated. While South Africa has around 2,300 shopping centres, and the second-highest oversupply of retail space in the world after the US, it seems that punters are heading back there in droves after our draconian lockdowns kept them away. According to the SA Property Owners Association’s latest “Retail Trends Report”, annualised trading density in SA malls went over R36,000/m2 for the first time ever in the second quarter of this year, hitting R36,300/m2 – well ahead of the pre-COVID mark of R35,000. Foot count is recovering well, up +18.6% YoY to June, and while it remains about 25% below pre-pandemic levels, shoppers are spending more than they did pre-COVID – an average of R152 per visit vs R110. And store vacancies are down for a similar period, from 7.1% to 5.8%, with regional centres faring a lot better than local malls.

Comment: For better or for worse, a trip to the mall is as much a part of our collective South African culture as throwing a piece of meat on a fire or yelling at the TV on a Saturday afternoon.