Kicking off our slew of financial results and trading updates is none other than Woolies’, who presented its interims for the six months through 26 December just shy of 24 hours ago. Raking in R1bn during the Christmas week alone was the Food business, which after a disappointing FY22 seems to have got at least some of its spark back at +7.3% growth in the half. And in what the Group can finally call a turnaround, Fashion, Beauty & Home sauntered down the runway at +10.7%, something that just a few reporting seasons ago seemed but a pipe dream. But what of its Antipodean assets? Well, just as David Jones finally returned to profitability, the Group still firmly believes that its sale will be “transformational”, allowing it not only to ditch a chunk of debt but also focus its efforts on other business areas that make more strategic sense. Under the quiet but apparently steady hand of CEO Roy Bagattini, the Group has expressed optimism about the prospects for the rest of the 2023 FY while cautioning that it will be a tough one due to the many, many external factors that we are quite frankly tired of mentioning, so we won’t.

Comment: Good stuff all round from The Dapper One, who we are very glad to see has pulled out its smartest suit once again. But you can read more about those results in our snappy little summary here.

Welcome to a new Shoprite Initiative which is not a think tank or a dream lab, nor yet a solar power plant, a fully-fledged bank or a hedge fund. For a change. No, it’s a humble range of private label products. Particularly humble, as it turns out: ‘Homegrown’ will source its products entirely from local small, medium and micro enterprises (SMMEs) giving them access to Shoprite’s 534 supermarkets nationwide. The initiative comes on the back of last year’s launch of Shoprite Next Capital, a business division dedicated to giving small suppliers access to its customer market. Some of the suppliers to this affordable range of quality products are Wonder Snacks, a family-owned and operated business that makes popcorn; Khayelitsha Cookies, a woman-owned and staffed baking business with 87 employees; Exotic Taste which makes mango and vegetable atchars; Le Bon Bon, snack foods and confectionery manufacturer; and Gordon Sweets, a family-run confectionary. All products in the range are MSG-, Tartrazine- and Azo Dye-free and made with sustainable palm oil, and together this motley crew of scrappy misfits employ hundreds of South Africans.

Comment: Smart, meaningful, and yes, homegrown. All the hallmarks of a Shoprite project.

The CEOs of three retailers – Pick n Pay’s Pieter Boone, SPAR’s Mike Bosman, and Shoprite’s Pieter Engelbrecht – have all weighed in on last week’s budget, in which diesel-related price relief for food manufacturers was announced but a similar courtesy was not extended to retailers. “The government has accepted the logic that the food industry should not be penalised for the energy crisis but has only done half the job,” they said, with one voice. “Our supermarkets are on the front line in keeping the lights on, and the shelves and chillers stacked, for customers during load shedding.” Heading north now, SPAR International has opened up shop in Angola, with nine SPAR Express convenience stores launching this past year, under the local licensee, retail and distribution outfit United Investimentos. And staying beyond our borders, Botswanan retailer Choppies, whose star burned bright but briefly in the Beloved Country some years back, announced in its interims results last week that revenue had increased +9% to 3.5m pula with 13 new stores opening and price increases of +11.1% for the six months through December. And while the business remains technically insolvent after its accounting scandal, it cut its debt by 64m pula to 536m pula (R740m).

Comment: A comeback? Too early to tell. But we always had a soft spot for Choppies.

We’re not sure whether you have spent the last five years with your head under a log. That would be your choice, and we do not judge you for it. But if you have, you may not have noticed that there is a vast and burgeoning TikTok-driven market of people who like to accessorise and cosmeticise inexpensively and for them, there is fast-fashion accessory emporium Claire’s… the same Claire’s that can be found in more than 110 Clicks stores right here in the BC. Now, in a stroke of genius, Claire’s has brought pop-up shops in the form of branded display units to over 2,200 grocery stores – notably Kroger and Albertsons – in the US, with more to follow. It’s already in over 2,500 Walmarts. We’re just throwing this out there, use it, don’t use it (but if this is the business you happen to be in, you totally should). Over in the UK, in the meantime, the woes of the working man and woman continue, with some supermarkets limiting the amount of fresh produce customers are permitted to buy due to supply shortages. Affected lines include tomatoes, peppers, lettuce and raspberries, with punters able to pick up only two or three packages each. It’s tempting to blame Brexit, but in this case it’s the weather: the UK imports 90-95% of its produce in the winter months, mainly from Morocco

Comment: As climate change bites, is our industry ready to face waves of disruption in the fresh supply chain?

The avalanche of interims and trading updates continues. First up, Tiger Brands, with revenue up +17% in the four months through January – neatly accounted for with a -1% decline in volumes and an +18% increase in selling prices. In recent months, shoppers have become more price conscious – particularly when it comes to the basics – and are flocking to private label, says the Striped One. Sales volumes have been declining in its flour, maize and sorghum beverage products, while snacks and treats are up by double digits. Moving on, logistics giant Super Group (see what we did there?) saw revenue increase by +34.6% to R29.12bn for the six months to December, in part “driven by strong consumer supply chain and commodity transport performances in southern Africa, (and) higher average revenues per load in Europe”. Next, Adcock Ingram reported revenue and gross profit up +8% to R4.67bn and R1.64bn respectively for the six months through December. Libstar, next, reporting an increase in revenue of +10.7% for the year through December, with gross profit growth of just +3.9% on increased input costs. Then (whew) Oceana Brands, reporting likely HEPS for the four months through March +20% higher YoY, due in part to strong local demand for canned fish and firm international pricing for fishmeal and fish oil. Finally, Distell reported an increase in group revenue of +15.9% on +10.3% higher volumes for the same period, on “explosive growth” in its premium cider and ready-to-drink (RTD) portfolio. Revenue in African markets beyond our borders increased by +21.5%.

Comment: Not exactly the picture of a sector in irrevocable decline.

Our editorial staff spent some time this week nosing around the JSE’s SENS announcements and turned up a veritable trove of interesting pieces. First up, to RCL FOODS, where Remgro has increased its beneficial interest to 80.22% of the company’s stock, following the repurchase of shares pursuant to the unwinding of its BEE transaction. Next up, Choppies (see also above) have let it be known that they are “still in negotiations to acquire a controlling stake of up to 100% of the issued shares in a Botswana based company, operating a fast-moving consumer goods business,” name not given, with no certainty of success. Finally, Tongaat Hulett has asked its creditors for an extension on the deadline of its business rescue plan, and this has been granted, indicating, one supposes, a degree of confidence on the part of those creditors. Related, professional services mavens Deloitte & Touche South Africa have agreed to pay Tongaat Hulett an amount of R260m without admission of liability for claims which Tongaat had asserted against Deloitte arising from the appointment of Deloitte as auditor of the Company for the financial years 2012-2018, during which the accounting shenanigans which resulted in Tongaat’s current predicament occurred.

Comment: The eventual recovery of Tongaat Hulett seems at this stage far from assured. But movement in the right direction is indicated.

Some revealing numbers from our friends at NielsenIQ, whose State of the Retail Nation report was recently published. According to the report, the FMCG sector grew to R547bn in sales in 2022 – a +14% increase from 2021, with sales of cooking oil (+34%), followed by bread (+26%), flour (+21%) and maize meal (+17%) achieving the highest increase in annual value sales, and in the case of oil and bread driven significantly by inflation. Big winners last year were the independent and the informal trade – as the global supply chain crunch hit, smaller businesses were able to adapt more quickly and bring alternatives to shelf, while also able to respond with greater flexibility to the energy crisis caused by incompetence and the operation of criminal cartels at Eskom. Interestingly, spazas, which do not rely on refrigeration much, were also able to adapt their operations more nimbly to the needs of their shoppers. Speaking of whom – they’re avoiding big shopping trips to malls abounding in expensive temptations, also a plus for local retailers. Although overall, shopping trips are -40% down on 2019 – a hangover from lockdown, and an indicator of difficult economic conditions.

Comment: Illuminating stuff, around which all of us might have to adjust.