The big story this week is that there was a big story last week in the dear old Financial Mail. On the cover, a threatening trolley was juxtaposed with an apocalyptic earnings graph under the header: Pick n Pay – What went wrong? Promising stuff. Inside, however, the story focuses on a couple of well-trodden issues – PnP’s belated investment in centralised distribution, problems with labour and the ongoing control of the Group by the Ackerman family. On all of these, the FM seems to toe the party line: distribution – be patient, it will pay off; labour – they hate us because we are nice to them; Ackerman control – a good thing. On distribution, there was no suggestion of what a massive strategic error Pick n Pay had made by not getting started earlier, nor the role ex-CEO Sean Summers might have played in earlier implementation. In fact, the blame was placed squarely on the shoulders of recalcitrant suppliers who despite Pick n Pay’s then-position as biggest super in SA, were apparently not having any of it.

Comment: So it’s all good, then.

Yay! The Compiteetion Authoriddies in Australia have approved the disposal of Pick n Pay’s Franklin’s “asset” to Metcash, on the grounds that wholesale doesn’t exist as a sector separate from retail there, and a decline in wholesale competition cannot thus be measured, and that the deal will probably strengthen the hand of the embattled independent retail sector in a ludicrously consolidated market which appears to consist of Woolworths, Coles and … er that’s about it, really. The authority’s appeal to the Australian Federal Court was dismissed with costs to both Metcash and Pick n Pay, who are doubtless mopping their brows and downing a cold one in celebration.

Comment: So that’s one box to tick, Big Blue. And the SAP implementation, that’s another.

Oh I say – turnover up 9.4%, don’t you know, and profit before tax a buoyant 31.1% to R2.3billion over at Woolworths, what? Jolly good! Things have been rattling along at a clipping pace at SA’s poshest retailer, with clothing and footwear up 11.5% and food up 10.7%, and general merchandise the only fly in the ointment at minus 2.7%. Margin on food improved from 3.8% to 4.8%, mainly due to improved sourcing. But the real winner was financial services – their JV on the credit side with ABSA saw operating profit up a monstrous 82.3% Y on Y, with a big improvement in the quality of the debt also. A significant change in the management of the business is the retirement of Buddy Hawton as chairman, and his replacement by a Mr Simon Susman, who due to his recent involvement with the business will be classified as a non-independent Chairman.

Comment: Leather on willow, a boyish toss of the forelock, aren’t the daffodils glorious this year etc.

Massmart currently own 10% of the food retail market, which is reputedly worth R250billion according to most reliable thumbs sucked by various commentators in the past five years, but it wants more, more I tell you, aiming for 15-20% in the next five years. Ironically, however, the Masscash division, which has a greater focus on food than most, was the worst hit in the year ending June, with profits down 20% as a result of deflation, and the investment in Cambridge Food. Massmart’s strategy for growth in foods hinges on an identified 250 commuter hubs around the motherland where they will target the “people without cars” for Cambridge’s expansion, as well as the new fresh offering in Makro and Game’s Foodco store-within-(for-the-moment)-a-store.

Comment: A powerful strategy which shows all the signs of great execution.

Poultry, although not paltry, producer Country Bird had a humdinger of a year in the twelve months to June, with operating profit up a whacking 81% to R221million, and volumes in the South African operation up 11%. All of this as a result of good performances in both the chicken and the feed businesses. The Rustic, Feathered One currently operates in SA, Botswana, Namibia and Zambia, and revenue has also increased in these enlightened neighbours, none of whom should be in any way due for regime change of any sort. And the future is bright – as the rand weakens and anti-dumping initiatives by the SA Poultry Association take effect, exports should increase. Scientific advances in feeds will also continue to boost the old bottom line.

Comment: Plucky work there, CB.

Wine, spirits and cider giant Distell has had only a modestly good year, with revenue up 4.4% to R12.3billion and operating profit up 3.1% despite rising operating expenses and a decline of 11.7% in net operating margin. Distell, you will recall, brings such brands as Amarula Cream, Savanna and Klipdrift and Cola, known by the wittier of my friends in PE as Uitenhage Karate Juice back in the day, and nobby French cognac Bisquit. Economic uncertainty in the developed world has suppressed growth in demand for Distell’s otherwise excellent portfolio of brands, which are nevertheless enjoying good growth in such markets as Africa, Latin America and Asia Pacific.

Comment: We can see klippies and coke going down a storm in Western Samoa.

We’ve been reading about food inflation hitting worrying highs globally, and threats of SA following suit for how many months already. And now we’re told that the real worry among the bearded economists who shuffle vaguely on and off the stages near the beginning of just about every conference we’ve ever intended is of galloping, wait for it, deflation as global growth prospects deteriorate and with them SA’s already fairly grim GDP numbers, hacking along in the low single digits right now, and expected to hit a disappointing average of around 2.5% this year. This, we are told, will cause Mrs Doubtfire over at the Reserve Bank to cut rates another half point in the next few months.

Comment: Oh would you, Mrs D? There’s a honey.

Not to put too fine a point on it, Tesco is bailing ignominiously from Japan where in 8 years it has failed to earn a rind for the punters in one of the world’s toughest retail markets. Reckless speculation has it that this move might mark a retreat from that other big loser, the US of A. Japan is the smallest of Tesco's 13 international businesses, consisting of 129 stores, a pachinko bar and a shop where you can buy schoolgirl sailor suits in the Tokyo area.

Big up to our loyal client PenBev, an independent bottler of Coke products, who have been ranked in the top 10 Best Employers in SA by the CRF Institute. One of PenBev’s big focus areas is skills development, keeping its 1,090-strong workforce up to speed on the complexities of an expanding beverage market.

Unilever also got hon. mench. at the CRF SA awards, scooping, holy smoke! no 1. Large Employer and no. 1 FMCG Employer in SA. The awards are audited by other friends of ours, Grant Thornton, and measure businesses according to a range of criteria, including strategy, HR, diversity management, talent management and recognition, inter alia and other stuff etc.