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Protect your brand during COVID 19

Source: Borderless Access

With every aspect of their lives being affected by the impact of Covid-19 and the national lockdown, consumers are expecting more from their brands than ever before.

As the estimated drop in South Africa's economy grows, disposable money is tighter than before, for almost every citizen.

This places a huge responsibility on brands to support consumers through this lockdown and beyond.

Key elements that brands should focus on during this unsettling time:

1.    Quality

2.    Accessibility

3.    Stability

4.    Communication

Now more than ever consumers are needing quality products

With tighter pockets, it becomes imperative for consumers, rich and poor alike, to know that their precious cash is being spent on quality products. During times of financial stress, there is no room for wastage. This places a huge onus on brands to deliver quality goods across the board, to retain key consumers.

Accessibility is critical: Brands must be available and affordable

Price and availability are extremely important to South African consumers…in normal circumstances and even more so during the crisis. For higher LSM consumers, availability is a major concern, while for lower to middle LSM’s price is a greater factor. Both speak to the fact that brands need to be logistically and viably accessible to consumers, giving them a sense of security and control in an unknown world.

Everything is changing: Brands must remain the same

In a time of macro-economic flux, consumers seek stability. Their trusted brands are in an optimum position to offer this. Brands can emit a sense of stability by showing that they care for their employees and are supporting their community during lockdown. They can also show stability in their offerings, remaining consistent and fulfilling consumer expectations... now is not the time for dramatic changes or risky line extensions.

Your consumers want to hear from you at a time like this

Brands should communicate with their consumers regularly during this period. As we have seen, communication is critical to keeping people feeling connected while physically apart. South Africans, in particular, want to hear from their brands about what they are doing to ensure product and personal safety. Due to the era in which we live, communication has never been more accessible – even during a lockdown. Brands can ensure they keep consumers feeling connected and informed, thereby enhancing their sense of safety and wellbeing.

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Shoprite Group ramps up measures to protect employees and customers

The Shoprite Group has rolled out temperature testing and mobile clinics for its employees as it continues to do everything in its power to ensure its stores remain safe during the Covid-19 pandemic.

Daily temperature testing as employees arrive at work and the roll out of mobile clinics follows the issuing of plastic face shields for employees last week, and stringent hygiene and sanitising protocols that have been in place across all of its stores, distribution centres and offices to keep the shopping environment virus-free.

 Those with high temperatures will visit the Group’s mobile clinics for a consultation and, if necessary, will be referred for further testing. Employees of merchandising, security and cleaning companies will also undergo temperature scanning.

The Group has already rolled out four clinics at its Brackenfell, Canelands, Centurion and Cilmor distribution centres, five mobile clinics in Gauteng and four in the Western Cape. A further eight mobile clinics will be deployed in the coming week to reach KwaZulu-Natal, Limpopo and the Free State. Mobile clinics will be allocated to densely populated areas and areas where state clinics are under tremendous pressure.

‘We continue to take proactive steps to protect our employees and customers while we provide an essential service to supply food to the nation’

Since the virus arrived in the country strict hygiene and sanitising practices have been implemented across the Group’s operations. Customers are asked to make use of the disinfectant spray bottles when entering stores and at till points, and sani wipes are provided at store entrances for use on hands and trolley and basket handles. 

Employees wear face shields that are santised on the hour and at all till points staff also sanitise till surfaces, including pin pads, and their own hands. Social distancing is strictly monitored and security personnel control the number of customers that enter stores and limit entry if necessary. 

Furthermore stores have prioritised quick entry and speedy check out for all healthcare and law enforcement personnel, and have allocated dedicated till points for elderly and vulnerable people. They are also invited to enter stores ahead of the social distancing queues. Customers unable to leave their homes can order deliveries through Sixty60 and Checkers Food Services.

The Shoprite Group will continue to do everything it can to protect and provide for its employees and customers during these trying times 

Source: Shoprite Holdings
Shoprite Group CEO, Pieter Engelbrecht

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Woolworth’s execs accept pay cuts to financially assist staff

Woolworths board members, group CEO Roy Bagattini and the retailer's senior executive team members have agreed to forego up to 30% of their fees and salaries over the next three months. The savings arising from this will be used to provide additional financial support to staff who find themselves in "extreme hardship" as a result of the current coronavirus crisis.

In line with government regulations, Woolworths fashion, beauty and home stores, which are deemed non-essential operations, are closed for the duration of the nationwide lockdown, while the majority of Food stores remain open.

Staff remuneration

In a trading update issued on Monday, the company confirmed that it will continue to remunerate all staff, and those who are part of the essential workforce will receive an additional 'appreciation payment' for the duration of the current lockdown period. Woolworths has also implemented a range of initiatives to support employees during this time, including alternative working hours to more flexible practices like work-from-home, leveraging a "full suite of technology tools" to make this happen.

The group reported that sales in its food business rose 27.6% in the four weeks to end-March, while sales at Woolworth’s fashion and home business fell 27.8% over the same period as customers shifted to essential products.

Commenting on its food business, Woolworths assured that "strong supplier partnerships" are ensuring a consistent supply of product. "The period immediately prior to the lockdown saw unprecedented demand on specific products that consumers considered essential. This demand has begun to moderate, as shopping patterns are re-set and as confidence in the food supply chain grows."

Lockdown shopping: Retailers ramp up in-store safety measures

Some of South Africa's largest retailers have introduced additional safety measures, including barrier screens at till points and protective visors...

Impact on business performance

The company said the impact of the Covid-19 virus is being felt across all markets in which it operates. "The Group is actively pursuing operational steps and considering strategic options to best mitigate the impacts of the crisis and to ensure the appropriate robust response in this developing situation.

"In terms of our stores, distribution centres and other operations, we are working closely with our health and safety partners, ensuring that all operations continue to conform to the highest level of hygiene and social distancing protocols," Woolworths said.

Edcon can only pay salaries right now, tearful CEO tells suppliers

In an emotional conference call to suppliers on Thursday, Edcon's CEO Grant Pattison delivered the news that the company is unable to pay its suppliers, as it only has sufficient liquidity to pay salaries...

The group said that in terms of business performance, the temporary closure of non-food stores in accordance with applicable law and regulation, decline in foot traffic and consequent loss of trade are likely to have a substantial impact on its earnings and cash flow in the second half of the financial year ending June 2020.

"There is a significant focus on facilitating trade and driving revenue including through online channels, given the current circumstances. We are also aggressively reducing costs, and managing inventory and working capital.

"Capital expenditure has been cut, with only critical projects moving forward. We have engaged with our suppliers to reduce apparel product intake and to extend payment terms. We are also meeting with landlords to explore alternative arrangements to current lease commitments, through the relevant period," the group said.

Woolworths said its operations across other African markets have also been "significantly constrained" due to slowing demand, store and border closures in response to local government requirements and responses to the Covid-19 virus.

Focus on e-commerce

Significant focus is being placed on the Woolworths online business in order to contend with significantly increased demand.

"The shift of customer spends to essential products, as well as the compulsory closure of FBH stores during the current lockdown period, will have a material impact on the segment´s results for the second half of the financial year. We are however encouraged by the growth of our online channel which remains available to customers, notwithstanding that order fulfilment can only be effected post the lockdown period," the group said.

Source: BIZCommunity

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Private label now commands R54bn in annual sales in SA  

Private label has carved out a strong and distinct space in the South African retail landscape, proof of which is the category's R54 billion in sales in 2019, which represents 9.6% year on year growth, ahead of the 4.4% growth of branded goods, seen within modern trade.

The growing importance of private label – brands sold exclusively through a particular retailer and sometimes referred to as “no name” or “house brands” – is also seen in its 22% overall share of FMCG sales in South Africa, a steady increase from 21% in 2018 and 20% in 2017.

These are just some of the results from the 2019 Nielsen State of Private Label Report for South Africa, which covers the modern trade sector in South Africa, and looks at where private label is growing, where it is not and what the future holds.

Elaborating on the latest findings, Nielsen South Africa retailer vertical lead Gareth Paterson comments; “Private label goods have shown strong growth across the globe in recent years and it is no different in the South African market. A key driver of this growth is the current economic constraints placed on South African consumers – given the increases in prices for petrol, utilities, and various forms of tax.”

More than just price

As a result of their highly constrained situation, the Nielsen report found that 80% of local consumers compare private label (PL) products with leading named brands, with the majority claiming that they buy these types of products because they’re cheaper. However, the relationship now runs much deeper than that, with product quality and innovation increasingly coming into the mix.

Paterson comments; “It is no longer just the fact that consumers are under pressure and consider PL as a cheaper alternative. Consumers now also expect innovation within the PL space. We see retailers have responded to the challenge with many of these items no longer merely replicating leading brands, but actually driving innovation within particular categories”.

“In fact, PL is innovating across the entire gambit of the affordability spectrum, not only within the ‘cheaper’ price bracket, but also within the ‘premium’ range, which now accounts for more than a quarter of PL sales within South Africa.”

With this focus on innovation, the Nielsen report reveals that the majority of consumers have shifted perceptions and claim that PL quality is just as good as named brands.

The double-edged demand of the South African consumer

The consumer landscape is currently fragmented and polarised, characterised by the double-edged demand of the South African consumer. Some are feeling prosperous, while others are amongst the most stretched spenders...

Top performers

Overall, almost 70% of PL sales continue to come from Perishables and Dry Groceries, with Chicken and Long Life Milk being the biggest contributors to incremental growth in 2019, and a recovery in categories like Chilled Processed Meats. Although growth has slowed for Prepared Meals – a star performer during the last two years – there is still a big focus from retailers on their fresh offerings in order to attract more shoppers into store.

Looking at specific pockets of performance, Confectionary, Baby Care and Personal Care have all seen good growth. Paterson says the “Confectionary growth is supported by the busy lifestyle of South Africans today, which leaves them with less time and has made snacking an important part of their diet. Retailers have capitalised on this trend and are showing great innovation within salty snacks, driving the Private Label confectionary growth.”

In terms of Baby Care, Paterson says the quality of PL within this category has improved, owing to great innovation within this space, resulting in Diapers and Wipes showing double-digit growth as well as consumers claiming that they’re purchasing more PL Baby Food products. “As consumers have moved into PL products within Baby Care, we have seen the trust grow as these brands deliver a quality product at a good price. It is clear that consumers have come to trust store brands with important purchases such as diapers for their children indicating that this growth is not just a short term trend”.

Looking at Personal Care, growth is being driven by Hand and Body, with a big focus from the retailers in this category due to the competition within this super group.

Following the global trend, local consumers are also more focused on health, with PL showing good double-digit growth within the healthcare super group i.e. Vitamins and Supplements, stemming from a big drive from major retailers to win within this space.

Finding space in the basket

Commenting on the overall effect of PL growth on the South African retail sector, Paterson says; “PL continues to find its place within the South African basket and its rise in popularity is the sign of a maturing retail market. Given that local consumers say that they are willing to try new brands, PL is in a great position to realise even more growth over the coming years.

“However, it must be stressed that well established, named brands continue to play a vital role in terms of providing a rich legacy of quality and innovation, so it’s certainly not a case of ‘either or’ when it comes to choosing between the two but rather a maturing retail sector that’s offering South African consumers greater value for money and ultimately, more choice.”

Source: 

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Source Joe Byle, Fresh Stop

As convenience retail continues to grow as an industry sector, retailers must remain focused on the most significant trends that will see their businesses flourish, and in so doing, strengthen their standing in the ever-competitive retail environment.

Convenience-store retail industry leaders came together to share expertise and at the most recent NACS Insight Convenience Summit 2018, which took place in Las Vegas, USA.

Each year, one of the most interesting discussions is about how the latest trends will shape the industry going forward. As a Board Member of NACS’ Inaugural Global Board, South Africa is formally represented in this international organisation.

The following four trends will continue to strategically shape the future of convenience retail both internationally and here in South Africa:

1. Food service categories

As convenience stores continue to focus on and build their food service categories to compete with national QSR brands, customers are not the only ones taking note. Fuel retail stores used to be looked upon as the poor brother of the retail industry but this has changed. Even High Street brands are now paying attention to forecourt convenience stores by exploring and trying out new formats to get a slice of the pie.

Convenience stores have been lifting the game and now offer better value and many more food options that rival the high street chains in quality and consistency. We are gaining momentum and starting to take market share away from traditional retail.

Food service lines, and the variety thereof, are a crucial part of growing a successful c-store retail business. The industry internationally is bragging about an approximate 20% participation rate, whereas the leaders in the c-store industry in South Africa can achieve around 30% in stores with a food service offering, which far outpaces the industry norm.

Where c-stores have support of national supermarket retail brands, they can compete through price on grocery categories. On top of that, the innovation of QSR brands that offer the likes of deep-fried chicken, hamburgers and flame-grilled chicken, make the convenience store much more appealing to new trends that customers need and demand. Not forgetting, customers’ on-going demand for healthier food options and a good quality Barista coffee offer.



2. Frictionless shopping

Frictionless shopping is all about providing customers with a personalised, enhanced, simplified and smooth shopping experience. For retailers to be successful, they must embrace technology and data throughout the process, from product innovation to the in-store consumer experience.

The most notable example of frictionless shopping is Amazon Go, the first completely checkout-free shop. Customers enter the store using their Amazon Go app, they fill up their shopping bag and simply leave the store when they’ve finished selecting items. The store uses cameras and sensors to know what has been taken off the shelf, so it can be charged to the customer’s account. No cashiers, no long lines, no paper receipts.

This form of shopping will take some time to come to South Africa but retailers need to start incorporating technologies and processes to provide customers with frictionless shopping options.

I believe that c-store customers will soon be able to place an order at a food service counter self-ordering kiosk and in so doing, avoid long lines or confusion with orders. Once they receive a number they’ll have the freedom to continue shopping in-store and add to their basket. Frictionless shopping is a combination of simplicity of transaction, the customer experience and speed of delivery.

3. Evolve with change

The evolution of motor vehicles and the possibility that petrol might be deregulated are base changes that would impact the viability of convenience stores dramatically. With cars being able to go further with less fuel, the rise of electric vehicle charging stations, and recent statistics that show customers are stopping at c-stores more often, retailers must come to terms with the fact that customers will only frequent those forecourt stores where they get the offer that suits them. Fuel stations that don’t evolve will die.

In essence, the forecourt of the future will be revolutionised. The recharging/fuel stations will become the back court with the store/café becoming front and centre, so the retail offer has gained importance. For example, a regular c-store coffee customer will rarely think of buying fuel anywhere else but where she buys her coffee. Integrating mobile technologies such as apps to attract customers in-store, or offering them their favourite products on promotion via touchless payment is gaining traction.

4. The customer experience

The customer experience as a key trend sounds outdated but in order to remain competitive in an evolving retail environment, the future of c-stores relies on the customer experience and, at the end of the day, the in-store experience that includes ambience and vibe (music and infotainment) will help drive repeat business.

The customer experience revolves around personality recognition and consistency. When you bring personality and training together, you create an experience where the customer feels recognised whilst at the same time being assured of every aspect of your business. There is much value to be placed on having the best Wi-Fi, the cleanest toilets, and working power points that works in unison with the tastiest food and the fact that the Barista knows exactly how you take your coffee.

Based on research from NACS and the Coca-Cola Retailing Research Council, customers define convenience as a comfortable and frustration-free shopping experience; and going into 2019, convenience retailers would do well to incorporate these four trends into the decisions they make today, as the c-store of today will not be the same c-store in 20 years’ time – it will evolve.


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Many South African consumers are seeking value-for-money offerings in order to protect themselves against inflationary pressure. Consumers who face these challenges the most tend to fall into the lower middle and lower income brackets.

In paper towels, consumers are not necessarily loyal to leading brands; instead they are willing to trade down to value alternatives if they deem the price to be relevant. Supermarkets, for example, are taking stock of this as they continually place their private label lines alongside leading brands.

Boxed facial tissues continue to remain popular amongst consumers with assortments of products such as gender-specific, scented and those aimed at children. Boxed facial tissues are not the only format; tissues packaged in flexible plastic are available in private label ranges from Pick ‘n Pay and leading brand Twinsaver.

Twinsaver Group proved to be the most prominent player within retail tissue as it was prevalent in all categories, managing the majority of shares in boxed facial tissues and toilet paper. Pick ‘n Pay Retailers also managed to hold a respectable value share in paper towels and napkins.

There is an increased presence of no-thrills packaging for economy priced toilet paper, especially from private label offerings. The packaging displays minimal information and is of relatively low quality.

However, the supermarket retail business in the country remains the leader of the continent.

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PLMA- Chicago

What do you see when you look into the future? Do you see opportunities and breakthroughs or problems and obstacles? Store brands is based on optimism. It is all about taking advantage of the future and growing. That is what you will see for yourself if you exhibit or attend PLMA’s 2018 Private Label Trade Show.

You can become part of this exciting phenomenon. Private label market share has reached nearly 25% of unit sales in the U.S. and is expanding faster than national brands. Retailers coast-to-coast have committed themselves to an aggressive store brands strategy while specialty chains are using their own brands to create shopper loyalty unheard of only a few years ago.

Buyers from every channel will be at the 2018 show. Today’s supermarkets, supercentres, drug chains, mass merchandisers, convenience stores, online retailers, importers, exporters, wholesalers, discounters, and even military exchanges, will all on hand, looking for new products and identifying new suppliers.

For more than 30 years, PLMA’s annual trade show has been the industry event of the year, where retailers and wholesalers source for their private label programs. More than 1,500 companies from 40 countries will be exhibiting their products, including 25 international pavilions. Exhibitors range from small and medium-size companies to well-known national brand makers who also supply store brands.

No show offers participants a greater opportunity to meet. PLMA’s online Show Preview helps buyers and sellers to identify interesting products in advance of the show and set up one-on-one meetings. PLMA’s Idea Supermarket displays private label programs of retailers around the world to benchmark what the industry is doing. And all of this is concentrated into two days of show floor time to maximize exhibitor and visitor time.

If you would like to exhibit at PLMA’s 2018 Private Label Trade Show, please contact exhibit@plma.com or telephone (212) 972-3131.

If you would like to attend the Show as a visitor, go to www.plmaregistration.com

Private Label Manufacturers Association
630 Third Avenue
New York, NY 10017
Telephone: (212) 972-3131
Fax: (212) 983-1382

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Global Menstrual Cups Market Research Report information: By Product (Reusable Menstrual Cups and Disposable Menstrual Cups), by Type (Round and Hollow), and by Distribution Channel (Online Stores and Retail Outlets) – Global Forecast Till 2023

Market Summary

The global menstrual cups market is anticipated to reach USD 1514.01 million by 2023, as per a new detailed report by Market Research Future (MRFR). It is expected to exhibit a 3.50% CAGR during the assessment period (2018-2023). The rise in the women populace coupled with high costs of sanitary pads and tampons are expected to drive market growth over the forecast period. Demand for eco-friendly feminine hygiene products can bode well for the market.

Menstrual cups are an eco-friendly alternative to tampons or sanitary napkins derived from medical-grade silicone. The rise of the women workforce coupled with the female gender representing nearly half of the global population is factors expected to spur the menstrual cups market growth. In addition, the products can prevent leakage of menstrual fluids with no reported adverse effects.

Report Overview

This report allows the user to gain a deeper understanding of the ongoing events and trends in the global market for menstrual cups. By correlating the historical data with key market dynamics, our analysts were able to make highly accurate projections in the report. MRFR’s report includes a thorough segmental analysis of the global menstrual cups market segmented by product type, test type, end-user, and region with astute insights. This report has been prepared to assist industry participants in making informed decisions on growth strategies and operation management. Users will also come across drivers, trends, opportunities, and restraints which are likely to influence the growth of the market during the assessment period.

Players Covered

Me Luna, LadyCup, Ruby Life Ltd., Lunette, Irisana S.A., The Keeper, Inc., Vcup, Anigan, FemCap, Inc., and Diva International Inc., are prominent players in the menstrual cups market. These companies have turned to online channels and digital marketing to create their niche. Online channels offer privacy to users with consumers choosing to buy sanitary products at their own discretion.

Segment Overview

By product, the menstrual cups market has been segmented into reusable and disposable menstrual cups. Reusable cups will dominate the market by accounting for a large market share by 2023. This can be attributed owing to reusability cycle of these cups ranging from 1 to 5 years depending on the brand. By type, the market is segmented into hollow, pointy, flat, and round. The round segment accounted for 43% market share due to the flexibility in the design of these products.

By distribution channel, the market is segmented into online stores, retail outlets, and others. The online store channel segment accounted for 62% market share owing to penetration of e-commerce stores and changing buying patterns of consumers.

The segments and sub-segments covered in the report are analyzed under four major regions –Americas, Europe, Asia Pacific (APAC), and the Middle East and Africa (MEA), with respective country-level market sizing. For the scope of research, the standard definition of the product/ service “menstrual cups” is included in the report. The report discusses and interprets the current and future opportunities of the industry by delivering an unbiased growth assessment.

The report offers comprehensive profiles on these market players and assesses their current standing in the menstrual cups market. Company history coupled with annual turnover, segmental share, SWOT analysis, growth strategies, new product launches, M&A activities, and latest R&D initiatives are outlined in the report.

Research Methodology

Market Research Future (MRFR) uses a combination of primary and secondary research to compile market reports. Primary data is accumulated from interviewing industry stalwarts, and secondary research is collated by studying white papers and annual reports of leading players. Our analysts use top-down and bottom-up approaches to validate the findings of the report. The report comprises news, current trends, and future prospects related to the market, all of which can provide a thorough understanding of the market to clients. Industry leaders can make accurate business decisions based on our insights.

Analysis Period

• Base Year - 2017

• Projection Period - From 2018 to 2023

• Market Denomination - USD Million

• Conversion Rate - Considered as per the respective financial years

For the scope of research, the report offers a comprehensive analysis of the global menstrual cups market.

Product

• Reusable

• Disposable

Type

• Hollow

• Flat

• Round

• Pointy

Distribution Channel

• Online Stores

• Retail Outlets

• Others

Region

• Americas; North America and South America

• Europe; Western Europe and Eastern Europe

• Asia Pacific (APAC); Japan, China, India, Australia, Republic of Korea, and Rest of Asia Pacific

• Middle East & Africa (MEA); The Middle East and Africa

Intended Audience

• Government Research Institutes

• Research and Development (R&D) Companies

• Medical Devices Companies

• Academic Institutes and Universities

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The Retail Industry in South Africa

The retail industry has grown over the past years, supported by an increase in both the supply of retail space and the number of shopping centres in the country. The industry grew by an annual average of 3 percent in the past eight years. The country has seen a boom in shopping centre development and townships have also benefited from this. Retail trade sales have been increasing over the years. An average annual increase of 29 percent in online retail sales, total retail trade sales are expected to further escalate. Growth of the industry is largely influenced by economic conditions that consumers find themselves in. Amongst others, these include the level of the interest rate, inflation and economic growth.

A stable economic environment allows consumers to spend more, thereby increasing the value of retail trade sales. At 26.5 percent, Gauteng contributes the largest share of gross value added by the retail industry. The economic contribution made by the industry is of great value to the economy and the public as it offers more employment opportunities, especially to the youth. Though the industry has various challenges, opportunities do exist. Some of the challenges experienced by retailers include increased operational costs and skills shortage. However, the relatively developed infrastructure and institutions in the country, make multinational companies view the country as a hub where they can establish and expand business to the rest of the Sub-Saharan African region.

South Africa has seen the retail trade industry grow from strength to strength over the recent years. The industry mainly comprises of individuals and companies engaged in the selling of finished products to end user consumers. An increasingly large number of businesses have entered this industry; both formal and informal retail traders have experienced growth over the years.

With the South African economy evolving to one that is consumer driven, as mining and manufacturing decline, industry expansion falls on the hands of retailers. The decline in manufacturing also makes the country to be globally uncompetitive as it relies more on imports. The country continues to develop new malls and shopping centres. This increasingly rapid establishment has in the recent years seen not only cities expanding their retail area but also some townships have had malls and shopping centres being developed.

South Africa‟s retail industry has evolved over the years. Improved and modern infrastructure in the country has allowed for more rigorous economic activity. The retail industry has benefited through efficient distribution of goods to urban centres, townships and rural areas. Shopping centre development has shifted from being concentrated in inner-cities to suburbs and townships. Rapid construction of high-density housing in the surrounds of major urban areas has led to the demand for and increased developments of retail centres in these residential areas. The country’s retail outlets offer a full variety of formats that are similar to those in the United States (US). These retail outlets range from cafés, general dealers, specialty stores, exclusive boutiques, chain stores, department stores, cash and carry wholesale-retail outlets and the co-operative stores which serve most rural areas.

South African retail companies compare well with other retailers globally. Major industry players in the country include Edcon Pty (Ltd), Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd and Massmart Holdings Ltd. In the 2012 Global Powers of Retailing report5, the country’s top five retailers were ranked in the global top 250 retailers. Shoprite was ranked 92nd in the retail sales rank, Massmart (126th), Pick n Pay ranked (133rd), Spar (179th) and Woolworths (222nd). In 2009, the retail industry’s average profit margin was 3.9 percent. Retailers in the Textiles, clothing, footwear and leather goods had the highest profit margin at 10.8 percent. This section discusses these six major industry players. There are other retailers in the clothing and fashion retail chains that have a noticeable presence in the country but will not be discussed further because they respectively contribute smaller shares in the industry. These include Mr Price, Truworth‟s International and the Foschini group.

Edcon Pty (LTD) is the largest clothing, footwear and textiles (CFT) retailing group in South Africa. Edcon is estimated to have 31 percent market share of the CFT retailing group. 6 The company has about 1,228 stores operating in South Africa, Botswana, Namibia, Swaziland and Lesotho. Through its recent acquisitions, Edcon retail business has added top stationery and houseware brands as well as general merchandise to its CFT portfolio. The company also provides credit facilities and financial service products to the Group’s over four million card holders.

Edcon ‟s retail business is structured under two divisions; the Department stores division, which includes Edgars, CNA, Boardmans, Prato, Red square and Temptations, which serve

middle and upper income customers. The second division is the Discount Division, which includes Jet, Jet Mart, Jet shoes, Legit and Blacksnow, serving lower to middle income customers.

Pick n Pay is one of the largest Mass Grocery Retail (MGR) companies in Africa with a market share of 30 percent in South Africa. The group operates 794 outlets made up of hypermarkets, supermarkets and family stores.

The Shoprite group of companies is also one of Africa’s largest food retailers, with a market share of 30 percent in MGR. The company operates 1,303 corporate and 427 franchise outlets in 16 countries across Africa. It employs more than 95,000 people, of which approximately 11,000 are outside the country.8 Shoprite caters mainly to the middle to lower-end of the consumer market.

Some of its store formats and retail brands include Shoprite supermarkets, Checkers supermarkets, Usave stores, Medirite pharmacy, House & Home and the OK Franchise division.

The Spar Group is the third largest MGR by market share, with a share of approximately 26 percent. It operates six distribution centres, supplies goods and services to approximately 800 stores in the country.9 Stores that are under the Spar group include;

Build It, Pharmacy at Spar, Tops, Kwikspar and Superspar. The group operates in three countries.

Woolworths is the fourth largest MGR, with 11 percent market share. This company has approximately 23,304 employees. Woolworths owns 295 stores and has 145 franchised stores. It offers its own product brand of clothing, food, home and beauty. It operates

in 18 countries, with store formats that include full line stores which stock a complete range of Woolworths‟ products. The Woolworths food stores only sell Woolworths foods.

The Massmart group consists of nine wholesale & retail chains with 265 stores in South Africa and 13 in other countries. It has about 1 percent market share of the MGR and employs over 30,000 staff members.

Economic activity within the retail industry has flourished over the years. This can be seen by the increased developments of formal retail shopping centres. Gauteng in particular, has seen rapid growth of shopping centre development. The province makes up 45 percent of shopping centres of the country. An increase in shopping centres leads to the employment of more people, thereby addressing the country’s problem of high unemployment rate. About 27 percent of the youth are employed by the wholesale & retail sub-sector in the province. Gauteng contributes the largest share (26.5 percent) to the country’s retail industry. The province is also home to four out of eight super regional centres in the country, these include Sandton City, Menlyn shopping centre, Eastgate shopping centre and the Westgate shopping centre.

The key players in the industry include major retailers which are Edcon Pty (Ltd), Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd and Massmart Holdings Ltd. An indication that these retailers are globally competitive is that, most of them were in the rankings of the global top 250 retailers. Although the retail industry in South Africa does not have a formal regulatory board, retailers are members of certain associations. These are the Consumer Goods Council of South Africa, the South African Retail Council, the Franchise Association of South Africa and the Council of Shopping Centres South Africa.

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South African Retail Sales

Source: JSE

South Africa's retail sales increased 8.2 percent year-on-year in November of 2017, following an upwardly revised 3.5 percent rise in the previous month and well above market expectations of 3.1 percent. It was the steepest gain in retail trade since June of 2012. Sales rose for general dealers (6.0 percent compared to a flat reading in October) and hardware, paint and glass (1.4 percent compared to a flat reading). In addition, sales advanced at a faster pace for: textiles, clothing, footwear and leather goods (12.4 percent compared to 5.6 percent); all other retailers (20.8 percent compared to 15.3 percent) and furniture and household equipment (14.1 percent compared to 3.4 percent). On the other hand, sales went up softer for food, beverages and tobacco in specialized stores (0.5 percent compared to 2.7 percent) and pharmaceuticals goods and cosmetics (4.6 percent compared to 5.3 percent). On a monthly basis, retail trade went up 4.0 percent, after a 0.1 percent drop in October. Retail Sales YoY in South Africa averaged 4.58 percent from 2003 until 2017, reaching an all-time high of 15.50 percent in September of 2006 and a record low of -6.40 percent in April of 2009.

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Government to step in on price of bottled water in Cape Town
Source: Supermarket & Retailer

The Portfolio Committee on Trade and Industry says it plans to write to the minister of trade and industry and the National Consumer Commissioner (NCC) to ask them to rein in unscrupulous traders who have increased the price of bottled water to benefit from the ongoing water crisis in Cape Town.

“In principle we are asking for intervention so that something can be done to make sure the regular price of bottled water is not increased without any regard to the pockets of consumers especially the most vulnerable,” said ANC member, Adrian Williams.

All members agreed that something needed to be done while Ghalieb Cachalia from the Democratic Alliance stated that “measures should be developed to prevent the poor bearing the brunt of such unfair trading”.

The chairperson of the committee, Joanmariae Fubbs having noted the consensus of all committee members present said that given the water situation in Cape Town,“the current increase in the price of bottled water being charged by some unscrupulous entrepreneurs amounts to exploitation of the poor and vulnerable and does not reflect the spirit of the Constitution”.

She said the minister and the NCC must apply their minds “expeditiously to make sure unfair business practices do not prevail” in Cape Town.

No hike in Cape bottled water prices despite growing shortage

Research published by consumer price watchdog, Retail Price Watch, on Friday (26 January) found that major retail chains in the region are largely sticking to 2017 prices for 5l bottled water.

However the net effect of the drought is that there has been a rush on bottled water and many stores have found themselves temporarily out of stock, said  Retail Price Watch’s Viccy Baker.

“Under normal circumstances demand pressure would have increased the price of the larger sizes, but instead stores have been offering specials which have cleared their shelves, even if only for a short time,” she said.

“Retailers are to be commended for not capitalising on the shortage, although it is very likely that consumers who are already very angry about the way the water crisis in the Western Cape has been handled, would not tolerate large price hikes,” Baker said.

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Source: Maryla Masojada, Trade Intelligence

As 2018 begins, we find ourselves in a time where extreme economic pressure and the technological developments are significantly influencing how consumers and shoppers behave, and shifting the demands made on those who supply or service them. We are racing towards a game-changing revolution in how products are made and sold, where and by whom.

These influencers, and the impact of South Africa’s complex political and macro-economic environment, present a unique and fascinating picture. What is driving consumer goods retail strategy is twofold – behaviours driven by consumer demand (covered in this article) and those shaped by organisational ‘back-end’ profitability requirements of the retailers themselves.

On the consumer-demand front, there are four key drivers at play that are shaping consumer goods retail strategy and behaviours: value as a necessity, time is a luxury vs experience as a drawcard, living healthy vs nutritional deprivation, and ethical living.

Value as a necessity

The impact of acute and growing economic pressure has in turn increased the pressure on retailers to bring the best-quality product at the best price to the complete spectrum of customers.

Trend 1: Price warfare: Having the cheapest price is increasingly the single determinant in the choice of shopping destination, and retailers are responding with innovative mechanisms in the race to demonstrate tangible value to shoppers – from loyalty points to cashbacks, multi-buys and BOGOFs.

The importance of the welfare wallet cannot be underestimated, and certain retailers depend heavily on the flow of social grant monies into the hands of their recipients. The acceleration of private label up the priority spectrum, from Shoprite to UMS, Pick n Pay to Jumbo, both as margin generator and competitor differentiator, is a clear expression of the hunt for margin and differentiation in a context of cash-strapped shoppers.

Time is a luxury vs experience as a drawcard

The demand for convenience by time-poor consumers continues unabated. The counter-balance to this? Consumers and shoppers will still spend time to have an experience instore.

Trend 2: The rise and rise of convenience retailing: The rise of the small store has significant implications for retail business models, supply chains and brand or product innovations. It is how these multiple drop-off points are cost-effectively served that will influence who wins.

How will large stores compete? ‘Everything under one roof’ will extend even further, with ‘retailer as lifestyle partner’ positioning and shopper experience being used as the drawcards. On the e-tailing front, South African retailers are on the road, with varying degrees of success. The challenge of the last-mile remains the inhibitor, although interesting innovation is underway, from township bicycle deliveries to click-and-collect solutions.

Trend 3: Increased focus on optimising the shopper experience: Expect further expansion of lifestyle-focused formats and products with next-generation stores, from Checkers Ballito to Pick n Pay Constantia emphasising in-store experience to attract shoppers and drive sales of high-margin lines. As Doug Stephens @RetailProphet says, ‘the line between retail and hospitality will soon barely be visible. Experiences won’t sell products. Experiences will be the product.’

Digital connectivity, augmented reality, virtual reality, artificial intelligence and blockchain technology are rapidly transforming how retailers and manufacturers engage with shoppers. Just the advent of scannable barcodes in the store or at home will transform how and from whom shoppers buy, held up only by how fast supply chain infrastructure can cost-effectively respond. 

©Gui Yongnian via 123RF 

Living healthy vs nutritional deprivation

Healthy living is taking the developed world by storm. With ageing populations, and a global and local increase in consciousness around wellness of body, mind and soul, consumers have growing expectations of health and wellness products and services. The retail response ranges from increasing allocation of shelf space to healthy products to the continued expansion into pharmacy and wellness clinics.

At the other end of the continuum is nutritional deprivation – where, either through lack of awareness or lack of access to healthy food, consumers are nutritionally deprived. Although it is important to remember, no one knows better how expensive it is to be ill, than people who cannot afford to be ill.

Trend 4: Retailer as ‘lifestyle partner’: In the ongoing race to attract and retain the cherry-picking shopper, retailers will continue to expand their lifestyle services whether in healthcare, nutrition, beauty advisory services, parenting support or in hospitality and banking. The latter further facilitated by the explosion of cyber cash, mobile payment technology and digital payment apps – from Woolworths to the informal traders of Durban’s Warwick Triangle.

Ethical living 

The world’s population consumed 1.6 planets’ worth of resources in 2015, a number reportedly set to increase. Clearly something has to give. Increased awareness of what ethical living means shows up across the retail landscape. The counter-trend of growing consumerism still prevails, particularly in less-developed markets; however, the shift to more ethical consumerism is accelerating.

Trend 5: Sustainability as a competitive imperative: There are those who ‘get it’ and those who don’t. Previously the domain of the likes of Spar, Pick n Pay and Walmart Massmart, sustainability has become more pervasive. Shoprite, who once stated that ‘we do sustainability when it is profitable’, has now clearly articulated ‘focus on environmental impact’ as one of their eight key strategic focus areas – a clear expression of the recognition of the fact that doing ‘sustainability’ well (and the scope of what that covers) can see significant cost saving and margin-generating benefits.

Trend 6: Community retailing as competitive advantage: Building and investing in the community you serve ensures a healthy, financially viable customer into the future. Again, there are those who get it and those who don’t. South African retailers and wholesalers are increasingly prolific in this area, and going forward, community retailing will increasingly underpin retailer and supplier shopper marketing strategy and activities.

Trend 7: Ethical trading: With the recent Steinhoff debacle, corporate governance and controls will tighten into 2018. The positive here is the improvement of accountability, while the negative is the restrictions this place on corporates who need to be light on their feet to effectively compete with independents.

In conclusion, when defining strategy in response to the market forces at play, grocery retailers and manufacturers will look at these seven consumer-driven trends in conjunction with the seven ‘back-end’ drivers of profitability, which will be detailed in part 2 of the Ti Retail Trends 2018 report.

The retail winners of the future will be those who adapt fast to escalating change, effectively balancing the consumer-driven demands and operational profitability drivers.

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