Trade Intelligence Logo

What should Massmart do re Game? There really are only three options, if you listen to the pundits. Turn it around, sell it, or shut it down. And with sales -8.1% for the year through December at the discount retailer, having shrunk for the past four or five years, you can be sure that Massmart are taking a look at all three. The issue with turning the business around is that this is likely to be a costly undertaking, at a time when Massmart is carrying heavy debt, including a R4bn loan from parent company Walmart. Selling is also complicated right now – Game’s woes have been heavily reported, and the business is unlikely to go for a premium. And cutting and running also brings its challenges, in the form of leases to exit and cross-sureties within the Group. Having said all this – Game has just opened two of its strongest-performing stores damaged in the July uprising, in Soweto and Vosloorus, with three more to come in KZN next month.

Comment: And honestly – an -8% dip is hardly apocalyptic. Maybe magenta’s still good for another couple of seasons.

A couple of weeks ago saw a resurgence of the violence and xenophobia that punctuate the lives of immigrant traders in the informal economy. Under the banner of Operation Dudula, which merged as a force in mid-2020 and still has an active presence on Twitter, immigrant traders were forcibly removed from the Bara taxi rank in Diepkloof, Soweto. “There are many foreign workers. They are our colleagues. Who gives anybody the right to harass and psychologically torment our colleagues?” asks Rosheda Muller, president of the SA Informal Traders Alliance (SAITA). She pointed out that tensions between local and foreign traders have arisen in part due to a lack of trading spaces, as well as a high unemployment rate. Pat Horn from Women in Informal Employment points to a lack of regulation by municipalities. “A lack of equal treatment and compliance creates fertile ground for bribes, where people who pay get better treatment,” she says.

Comment: These outbreaks are understandable and preventable. Less understandable is the lack of will to prevent them.

In a further abdication of the duties of the state to the private sector, the SA Post Office (SAPO) has let it be known that Beneficiaries of the R350 social relief of distress (SRD) grant who used their phones to apply for only one grant can collect it from any Pick n Pay or Boxer supermarket. More than one, and recipients remain at the tender mercies of the Post Office. Over to Shoprite, and a look at the scholarships offered by the Group gives you some ideas about what its priorities might be in the next couple decades or so. Recipients of bursaries in the fields of accounting, food sciences and information technology will have the opportunity to apply their learnings at The Big Red One itself once they’ve completed their studies. The bean counters will be exposed to several different disciplines, including buying, logistics, or IT, while the food scientists will have an opportunity to work with the Shoprite and Checkers supermarket teams on fresh foods, product development and fresh produce.

Comment: A sometimes overlooked aspect of the investments our retailers make in the sustainability of their businesses. Excellent work, Shoprite.

In the UK, there’s something of an arms race underway – initiated of course by Amazon – to remove the costly and inconvenient human element from the retail experience. Inspired by Amazon, Tesco and Sainsbury’s have both launched checkout-free stores, with machine learning, camera and shelf technology. While the stores seem to offer punters more in the way of convenience, they do demand a degree of technical expertise and hardware which are not available to everyone. In Brazil, Carrefour is rolling out standalone stores in condominium developments, giving residents one less reason to head out into the world beyond the security gate. Also in the UK, shoppers are heading to Aldi and Lidl in droves as the supply chain squeeze raises prices, with food inflation predicted to go as high as 5% by the northern spring. Finally, in Canada, Walmart are experimenting with blockchain technology to increase transparency and reduce error and waste in their convoluted supply chain.

Comment: In the world of retail, we’re living in a time of surging innovation, not all of it good for people.

Where Coca-Cola still claims the insurmountable high ground of scale, rival PepsiCo has focused of late on the interesting valleys and byways of innovation. Witness its reason for partnership with SodaStream, for example. And this: the rollout of a new line of hemp-infused beverages from its Rockstar Energy Drink brand, aimed at helping people unwind while still keeping them just pleasantly awake. How do they do this? Hemp seed oil and B vitamins, plus just 80mg of caffeine – about half the usual quantity. Sales of hemp-based products are expected to reach $2.61bn in the US this year, after the milder marijuana strain was legalised in 2018. Sold in three flavours – Blueberry, Passionfruit, and Raspberry Cucumber – Rockstar Unplugged as the brand is rather cleverly known is also aimed at bringing more young women into the energy drink market.

Comment: And so here we are, at the birth of an entire industry.

Libstar Holdings Ltd have announced the appointment of Ms Ntokozo Makomba as company secretary. She replaces someone called “CorpStat Governance Services (Pty) Ltd”. Ms Makomba comes to Libstar from similar gigs at Lewis and earlier at Quantum Foods. Nestlé have as a precautionary measure initiated a voluntary recall of a limited number of Kit Kat milk chocolate products due to the apparently remote possibility that they may contain glass pieces. They’re unsure how the glass found its way into items from an inspected batch but are investigating. And finally, to Tiger Brands, who are still struggling to extricate themselves from the Listeriosis crisis of three years ago. Last week, the Supreme Court of Appeal overturned a Gauteng High Court decision to force other companies to hand over to Tiger epidemiological and other information relating to the listeriosis outbreak. Tiger are attempting to prove that there may be sources of contamination other than the Tiger Brands cold meat processing factory in Polokwane where the outbreak originated.

Comment: There comes a point at which reputationally it might be better to let go and move on.

Next month, pundit, plutocrats, politicians, and playmakers alike will gather in Joburg for the fourth South Africa Investment Conference (SAIC), which is an important drive in our effort to attract R1.2tr in investments over the next five years, an initiative which began in 2018, and which has already attracted R770bn in commitments across a range of sectors. Some recent projects which will boost our fiscus and give heart to prospective investors are: a multibillion-rand investment by US-based health technology company NantWorks in a new vaccine manufacturing facility in Cape Town; the expansion of Toyota’s production line to manufacture SA’s first hybrid car – the result of a R2.4bn commitment made at SAIC in 2019; and Aspen Pharmacare’s R3.4bn expansion which will make it one of the largest hubs globally for the manufacture of general anaesthetics.

Comment: And what of this great industry we call home? Let’s hear from you, our readers in the comments!