An 18-week update you say? Well, why not? For the 18 weeks through January, SPAR reported Group turnover growth of +7.8%, with SPAR Southern Africa sales coming through at +7.4%, just a touch less than the same period a year ago. And wholesale growth – perhaps a better indicator of the performance of this particular business – was up +9.7% compared to a +3.7% increase last year. TOPS was up only +1.6% but this was off a very high base – sales for the comparable period last year were up +55.8% as the COVID prohibition was lifted. SPAR also recorded growth in its Encore private label business, and in its delivery platform SPAR2U, numbers not given. “The business has made good progress with its accelerated growth plan, but it continues to be impacted by fuel, energy and other inflationary cost pressures,” says SPAR, in the update in question. “However, this performance is encouraging amid challenging trading conditions, and the Group has benefitted from installing solar plants across all its distribution centres.”

Comment: Solid numbers in an otherwise tricky ambit for SPAR.

And here’s Dis-Chem with a trading update for the five months through 5 February, predicting a +4.7% increase in Group revenue as consumers spend more of their disposable income on healthcare and the beauty sector recovers from COVID-19. The business also says that Group revenue rose +8.7% (if you don’t include COVID-related sales), with retail revenue up +3.2% (including COVID this time) and wholesale revenue increasing +8.6%, growing sales to external customers +18.7%, and sales to own stores by +7%. And as with other retailers, its expenditure on diesel for generators has skyrocketed, up +54% to R36m for the period. During the period, the Group added eight new Dis-Chem stores and four new Baby City stores to a total of 312 stores. “The group continues to advance its ambitions in the baby category with steady improvement in baby-focused trade, specifically in Dis-Chem Baby City stores, highlighting the destination status of the brand,” says CEO Ivan Saltzman.

Comment: Muted results in a time of transition.

Pick n Pay has become the first South African retailer to drop barrier bags from its till points. Barrier bags are those diaphanous smaller receptacles that separate selected items like fresh produce, toiletries or cleaning products, from the other groceries in your stash, and they are currently not recycled. While you’ll still be able to get them in the produce section, the move should prevent over 20 million of them from entering the environment. Sticking with Pick n Pay for the moment, the news comes this week that Jonathan Ackerman is taking early retirement as an executive director on the Pick n Pay board effective the end of March. The youngest scion of that noble line has held important leadership positions across many areas, most notably marketing and store operations, and was known as a champion of the consumer. He will assume a non-exec position, and serve on the Social, Ethics and Transformation Committee. Finally, Equites Property Fund, an owner and developer of prime logistics assets in SA and the UK, will spend R1.16bn on acquiring and developing a prime logistics park for retailer Shoprite in the verdant hills of coastal KwaZulu-Natal. Completed, the site will offer 103,000m²of prime logistics featuring renewable energy, water efficiency or gathering installations, and energy-saving lighting.

Comment: Sometimes, the scale and growth of Shoprite’s operations is all one needs to provide a glimmer of confidence in our economic future.

In the US, research outfit dunnhumby has established that Texan discounter H-E-B (it’s short for Howard E. Butt… and that’s all we have to say about that) has beaten all comers – including Sam’s Club, Amazon, and Costco – for the title of “Most Valuable Grocer” which apparently means “Grocer Offering the Most Value”. Five metrics were used: price, promotion and rewards; quality; speed and convenience; digital; and operations. Also in the US, grocery retail and foodservice sales were up +6.4% YoY for the month of January, with retail trade sales overall up +3.9%. The numbers point to consumer resilience and a slow but ongoing recovery in the world’s biggest economy. Finally, from the UK, a tale of two retailers: one, frozen food specialist Iceland is closing eleven stores across the country as – it says – it faces a perfect storm of high energy prices and a migration to online grocery shopping by consumers after the pandemic. The other, Aldi, is planning on doubling its haul of 60 stores in London, where the German discounter feels it is under-represented.

Comment: There is still a future in bricks and mortar retail. And that future is both cheap and cheerful.

Sometimes, there’s a big acquisition among South Africa’s suppliers or a revolutionary new product or a scurrilous accounting scandal to report on. Other times, it behoves us to report on the new labelling legislation. Which in this case is pretty exciting and not necessarily in a good way. To wit, the Department of Health has gazetted a 238-page document aimed at making sweeping changes to the way food items are labelled on shelves around the Beloved Country. The proposed legislation will outlaw the use of such trendy appellations as “smart” or “intelligent” referring to food, along with “wholesome”, “nutritious”, “nutraceutical” or “super-food”. Packaging claims like “grain fed”, “grass-fed”, and “free range” will have to be backed up by hard evidence. Endorsements from celebrities (like the putative Gordon Ramsay), organisations and any medical practitioners are out. And food items that are high in sugar, fat and sodium will require front-of-package warning labels.

Comment: Is anyone else getting a government overreach kind of vibe from this? The full document may be viewed here.

It’s no secret that South Africa faces a critical shortage of skilled professionals across almost all sectors. According to jobs portal CareerJunction, recruiters and HR specialists in South Africa are facing difficulties filling vacancies in skilled positions, which leads to staff shortages, and ultimately impacts business growth and affects the country’s GDP. The SA Consumer Goods sector, with all its complexity, is no exception. A possible solution to this sticky challenge is to accelerate the onboarding of raw recruits or mid-career newcomers to the industry. Enter Trade Intelligence, whose short, sharp Intro to SA FMCG Retail online course will bring your new intake up to speed on the requisite body of knowledge – including an overview of the FMCG retail landscape, shopper needs and retail trends that are shaping the industry, and a detailed review of the major retailers in South Africa.

Comment: The really excellent part is that this course is making its debut on the new Trade Intelligence e-learning platform, so your team will be able to learn as they go, from their desks or even their mobile devices. Have a look here for details.

Much in yesterday’s Budget – delivered in sonorous tones by Minister of Finance Enoch Godongwana – that impinges on this great industry we call home. For starters, Government has attempted to provide inflationary relief to SA’s embattled consumers with a 4.5% adjustment in the tax brackets, providing some respite in the middle and the lower end. Next, in a nod to the sin taxes so beloved of those in power, excises on alcohol and tobacco have been raised between +4.5% and +6.5%. And sugar fares little better – the Health Promotion Levy of 2.31c/g is imposed on beverages with more than 4g of sugar per 100ml. And the Plastic Bag Levy has been raised to 28c per bag. On the upside, the corporate income tax has been reduced to 27%. And – welcome news – SARS intends to simplify and modernise the current Value Added Tax (VAT) administrative framework – but not to raise VAT, despite under collection this year. Finally, Government has proposed a total debt-relief arrangement for Eskom of R254bn – effectively taking over that debt and presumably allowing the embattled SOE to go about the business of generating electricity rather than worrying about the bottom line.

Comment: A generally well-received budget. Now let’s see it go to work for the everyday people.

Riding the inflationary wave this week is Coca-Cola, whose average selling prices globally rose +12% in the fourth quarter, even as unit case volumes declined by -1%. And the bottom line? Fourth-quarter net revenue rose +7% to about $10.1bn, with earnings forecast up 4 to 5% per share. A not entirely dissimilar story over at Nestlé, where sales volumes rose +0.1% in 2022, which combined with the +8.2% increase in pricing, brought full-year organic sales growth to +8.3%, for a total of CHF 94.4bn (that’s Swiss francs) – or R1.7tr, if you prefer. However, input prices such as coffee and dairy products, were through the roof, leading to dwindling profit. “Our gross margin is down about 260 basis points – that is massive,” says a disarmingly frank Mark Schneider, CEO. “That is after all the pricing we have done in 2022.” More price hikes for embattled punters are to come.

Comment: Two global giants of our industry, having it seemingly just as tough as smaller outfits with less purchasing power. Difficult and unsettling times.