In the hurly-burly of the holiday season, we somehow neglected to tell you that Shoprite is seeking parity with Pick n Pay in the eyes of the Competition Commission, in the matter of exclusive lease agreements. In 2019, you will recall, the commission released a report to the effect that exclusivity lease agreements were prevalent, anti-competitive, and harmful to consumers and smaller retailers. Shoprite has to remove exclusivity in its lease agreements by 17 December 2024; Pick n Pay has until 31 December 2026. The reason for the disparity, says the Commission, is that Pick n Pay is smaller and less profitable than Shoprite, which has to sting if your name starts with “Ack” and ends in “erman.” Disputing the disparity, Shoprite advocate Margaretha Engelbrecht said the ruling was aimed at enabling smaller retailers and historically disadvantaged stores to open in the same shopping centres, not to protect Pick n Pay from Checkers. The commission for its part has pushed back, pointing out that Pick n Pay is located more in urban areas whereas Shoprite’s has greater rural footprint.

Comment: The relevance of this last point escapes us. And we suspect that Shoprite will not let this one go until it’s had another day in court.

Woolworths Holdings is pleased to announce that it has entered into an agreement to sell its appalling David Jones investment to the imaginatively named Anchorage Capital Partners, an Australian private equity outfit – but interestingly, will retain ownership of its flagship property asset in Bourke Street, Melbourne, which it will lease back to David Jones on a long-term basis and competitive terms. Significantly for Woolies, the new owners will take on R17bn in liabilities relating to the David Jones store portfolio, enabling Woolworths to deploy its resources and focus on other more profitable endeavours. Says an almost audibly relieved Roy Bagattini, “This is a major milestone in the repositioning of WHL for growth, while simultaneously improving return on capital for our shareholders. The strategic rationale at the time of the acquisition did not materialise to the extent originally envisaged. While David Jones has successfully executed on its turnaround… now is the right time for the business to operate under new ownership.”

Comment: About blinking time. Stick to the very classy and historically profitable knitting, Woolies.

We’ll keep this one short because we know you’re a busy lot, but you’d be dippy to miss our Retail Trends briefing next week Thursday, 26 January. Where else can you get some of the top trends insights, presented by experts in the field for just R1.5k? Nowhere, that’s where. If you really, really can’t make it though, have a read of this excellent piece on the megashifts shaping our retail trends in 2023. You won’t be sorry you did.

Comment: For more on what to expect in next week’s briefing and our contact details to make your booking, click here . We look forward to seeing you there.

The week before Christmas, Shoprite CEO Pieter Engelbrecht sold R20m in the company’s shares, apparently as part of the “annual rebalancing of his investment portfolio”. And presumably to free up some cash for last-minute stocking stuffers. Shoprite shares went up 13% last year, as did Pick n Pay’s (13%), but the two were well behind Woolies (29%). In the same week, but otherwise unrelated, Pick n Pay trialled a new pick-up counter for Takealot customers in its Table Bay Mall store, reaching collection capacity within two days, strongly suggesting the potential of the concept in a country where home delivery isn’t what it might be for some punters. Woolies is also stepping up its online game, announcing a partnership with logistics outfit Pargo, enabling punters to pick up their fashion, beauty and homeware orders at nearby Pargo click-and-collect pickup points. Finally, Nielsen reveals that Checkers enjoys some 47.1% of SA’s vegan and plant-based market with 49.9% of all frozen, plant-based and vegan sales and 44% of ambient.

Comment: Some interesting initiatives from our major retailers as we enter this brave new year.

Inflation in the US: a thing or not? Asking one Tik Tokker who tracked an identical basket of goods over two years, defs a thing. At the end of 2020, Walmart shopper, @amywaytosave, posted the receipt for a basket of foods like frozen veggies, eggs, flour, rice and beans, bananas, enough to get her through the week: $10.09. The next year, she did it again, to check out the rumblings around rising inflation, and it came in around 10% more. Now, at the start of 2023, the same basket is up around 50% to $15.10, and Amy is crying price gouging. So far, she’s has over 1.3 million views. In China, reports of the imminent demise of Carrefour, owned by Suning.com, the e-commerce giant which also owns Inter Milan, have been hotly denied. But the retailer, which has been ruffled by the recessionary winds threatening the Hidden Kingdom, saw its store footprint decrease by 23 stores in 2021. And according to financial reports issued by Suning, Carrefour China closed 24 stores in the first half of 2022, with no new stores opening, and another 30 stores were shut down by the end of the third quarter. Finally, Tesco has scaled back its plans for a network of urban fulfilment centres (UFCs) in the UK, despite its latest results showing online grocery sales returning to growth. In 2019, Tesco announced plans to double its online capacity with the launch of 25 UFCs by end 2023; this target has since been dropped in favour of a “test and learn approach”.

Comment: Economic headwinds all round, causing the big retailers to tailor their approaches, cutting back or padding the bottom line where they can get away with it.

Tiger Brands is going all out on innovation, leveraging its stable of brands to hatch the sort of exciting collabs we’re more used to seeing in the world of sneaker brands and pop stars. Hence, thus far, such intuitively awesome offerings as Beacon Black Cat Peanut Crunch bar and Purity Jungle Baby Oats. “Brand collaborations allow us the opportunity to combine the best of two brand intrinsic attributes and maximise the offering to our customers,” explains acting chief marketing and strategy officer Sarvesh Seetaram. But it’s not just in cross-branding that Tiger are innovating: witness new variants of existing brands like Energade Zero, Energade Boost, Vi-daylin vitamin gummies, Tastic Rice Chips and Rice Cakes, Albany Wraps, and Jungle Crunchalot Fillows. And some of the innovations are less exciting but no less critical than others: Tiger partnered with academic institutions like Rhodes University and the University of Pretoria, as well as innovation and research centres and science and technology associations, to improve shelf-life and optimise ingredients and by-product optimisation.

Comment: Exciting times as consumer trends like health and nutrition, snackification and value drive product development.

The Department of Health has published the Single Exit Price (SEP) increase for medicine for 2023, to the disapprobation of drug manufacturers across the Beloved Country. The SEP allows for a maximum increase of 3.28%, lower than the 4.77% allowed by the approved formula, and slightly lower than the 3.5% allowed in 2022. The Pharmaceutical Task Group (PTG), which represents 80% of the industry, is considering its options and does not rule out challenging the increase to bring it more closely in line with CPI. Unrelated, Heineken has run a successful and innovative campaign to encourage road safety and discourage drinking and driving, using a series of pitstops across Mpumalanga, Gauteng, and Limpopo and QR codes to allow travellers to log their virtual and real-time journey to win prizes at the last pit stop. The S’fika Sonke campaign also rewarded drivers with a zero-blood alcohol breathalyser reading, and passengers in taxis or cars whose trips are timed to ensure no speeding took place.

Comment: Creative, relevant and meaningful. Excellent work that agency.

According to the Bureau for Food and Agricultural Policy (BFAP), inflation is likely to remain high as we take further, tentative steps into 2023. “We expect that food inflation could peak in the first quarter of 2023, after which the higher base effects apparent from March 2022 will result in smaller inflationary effects during the rest of 2023,” they say, pointing to the eventual impact at the till point of increasing commodity prices – particularly the maize price – and weaker exchange rates. NGO Debt Rescue concurs with this gloomy view. “Food prices remain at distressing levels for the average consumer, and the prices, especially of staple foods, continue to rise, regardless of decreases in inflation, petrol or diesel prices – with authorities either unable or unwilling to elucidate this continuing trend,” says CEO Neil Roets. He believes that South Africans will rely more heavily on their credit and store cards to get through January after the excesses of the festive season. “In fact, we foresee that people will be in more trouble this year, than ever before,” he intones.

Comment: How do we as an industry help to reduce the pressure on South African shoppers while attending to the bottom line? A critical discussion for the next couple of months.