INTELLIGENCE RETAIL INDUSTRY - COMPILED: NOVEMBER 2020 - Contentstack
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THE INTELLIGENCE
REPORT
RETAIL INDUSTRY
INTELLIGENCE
MONITOR CORPORATE
DO GREAT THINGS EVERY DAY
COMPILED: NOVEMBER 2020
Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer.
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IN THIS ISSUE INTELLIGENCE OVERVIEW TRENDS & NEWS MERGERS & ACQUISITIONS INNOVATION & TECH TRENDS SOCIO-POLITICAL FACTORS LEGISLATION
INTELLIGENCE TRENDS & MERGERS & INNOVATION & SOCIO-POLITICAL LEGISLATION OVERVIEW NEWS ACQUISITIONS TECH TRENDS FACTORS RETAIL INDUSTRY INTELLIGENCE MONITOR
INTELLIGENCE TRENDS & MERGERS & INNOVATION & SOCIO-POLITICAL LEGISLATION
OVERVIEW NEWS ACQUISITIONS TECH TRENDS FACTORS
RETAIL INDUSTRY INTELLIGENCE MONITOR OVERVIEW
GLOBAL NEWS SA NEWS COMPETITOR COMPETITOR NEWS
FINANCIAL RESULTS
Nielsen International Grocery New Online Shopping Platform to be TFG’s Digital Transformation Enables
Shopper and Technology Survey Launched in SA Management of COVID-19 Challenges
Rex Trueform Clothing
Results The outbreak of the COVID-19 pandemic Company Limited JSE-listed retail group, The Foschini Group
Results from the Nielsen International has significantly disrupted the way we (TFG), has indicated that it is seeing the
operate, with this expected to continue to According to the latest annual financial results positive results of its previously launched
Grocery Shopper and Technology Survey
have long-lasting effects across all sectors. In for the year ended 30 June 2020, Rex Trueform digital strategy, as well as a R500 million
have been announced, providing key insights
particular, the retail sector has seen extensive Group Limited experienced a challenging investment into its digital transformation.
regarding consumer shopping journeys, and
evolution in several aspects of its operations, trading environment, which was significantly The group launched its digital
the role that technology plays in these
with customer experience seeing the most impacted by the COVID-19 pandemic. This is transformation plan three years ago,
journeys. The survey was conducted in
significant transformation. (5 October 2020) illustrated by the 11.9% decrease in company which has enabled it to easily manage the
partnership with Diebid Nixdorf and was
revenue, from R708.4 million in 2019 to challenges brought on by COVID-19.
coordinated through Nielsen’s Global
R624.2 million in 2020. (29 October 2020) (22 October 2020)
Consumer Business. (2 November 2020) Shoprite Checkers and Pick n Pay
Confirm End to Exclusive Lease
Surge in Amazon Third Quarter Retail Clicks Group Limited Woolworths Invests R1 billion in
Agreements
Product Sales Due to COVID-19 According to the latest reviewed annual group Pricing to Remain Accessible
Both Shoprite Checkers and Pick n Pay results for the year ended 31 August 2020,
The global retail giant, Amazon, announced (PnP) have confirmed, that they will no In an attempt to ensure its products remain
the Clicks Group showed strong and resilient
that it had achieved US$52.8 billion in terms longer be enforcing exclusivity clauses on as accessible as possible to the greatest
performance despite a challenging trading
of sales value in the third quarter of 2020, up lease agreements, with regards to small and number of consumers, Woolworths recently
environment, both globally and locally. This
from US$39.7 billion in the third quarter of independent retailers. This follows announced that it will be investing R1 billion
is reflected in the group’s turnover, which
2019. According to the Managing Director of agreements that were signed with the in its prices over the next two to three years,
increased by 9.6% to reach R34.4 billion
GlobalData, Neil Saunders, Amazon’s latest Competition Commission. (21 October 2020) to ensure its products continue to offer the
in 2020, while its UPD business’s turnover
results indicate that the company continues greatest value. This investment includes a
increased by 11.2%. (22 October 2020)
to benefit from the disruption, due to the commitment to its Food and Fashion
Increases in Grocery Costs Affecting
COVID-19 pandemic. (30 October 2020) businesses. (20 October 2020)
SA Shopper Behaviour Pick n Pay Holdings Limited
Walmart Unveils its New Store Design The Ask Afrika COVID-19 Tracker study has According to Pick n Pay Stores Limited’s latest Shoprite Launches Xtra Savings
shown, that significant proportions of unaudited interim for the 26 weeks ended Rewards Programme
Retail analysts at the global rating agency, consumers perceived the price of food and 30 August 2020, the group experienced a
Moody’s, have revised their outlook for the staple foods to have increased by 15%, for difficult trading environment due to the impact On 12 October 2020, the Shoprite Group
retail industry from negative to stable. The the prior five months. As a result, consumers of COVID-19 but has proven to be resilient. launched the new Shoprite Xtra Savings
agency had previously predicted a decline of are switching to cheaper brands and This is evidenced by the 2.6% increase in the rewards programme, in its Shoprite branded
up to 30%, now indicating that it expects a remaining loyal to brands that have not group’s comparable turnover, increasing from stores. This comes a year after the Checkers
15% decline in profits in 2020, with an increased prices. (7 October 2020) R43.1 billion in the 26 weeks to 1 September Xtra Savings rewards programme was
estimated improvement of 20% predicted 2019, to R44.2 billion in the 26 weeks to launched, which has already seen over
for 2021. (23 October 2020) 30 August 2020. (20 October 2020) 5 million customers sign up for the
programme. (12 October 2020)INTELLIGENCE TRENDS & MERGERS & INNOVATION & SOCIO-POLITICAL LEGISLATION
OVERVIEW NEWS ACQUISITIONS TECH TRENDS FACTORS
RETAIL INDUSTRY INTELLIGENCE MONITOR OVERVIEW
MERGERS, INNOVATION & SOCIO-POLITICAL LEGISLATION
ACQUISITIONS & TECHNOLOGY TRENDS FACTORS
PARTNERSHIPS Western Cape to Make Drinks High in
Alcohol More Expensive
Dior Announces Ability to Try on New Vans Supports Mental Health Focused
Sneakers Using Augmented Reality Charities with $1 Million Donation The Premier of the Western Cape, Alan
Stiles Incorporates Italcotto Into Its Winde, announced that the provincial
Business Operations Luxury clothing and apparel brand, Dior, has On 19 November 2020, Vans will be hosting government intends to increase the price of
launched its B27 sneaker, incorporating its second annual Checkerboard Day, beverages with a high alcohol percentage, by
On 1 November 2020, the South African tile augmented reality (AR) lenses on Snapchat focused on mental health and well-being. As
and sanitaryware retail store, Stiles will raising minimum unit pricing. It is suggested
which allows users to try-on and buy the part of this event, Vans will be supporting 10 that this approach could be effective, in
incorporate Italcotto into its business sneaker virtually. This immersive experience mental health-focused charities around the
operations. Through the incorporation of terms of reducing the prevalence of binge
is designed to engage passive purchasers on world, with a collective donation of $1 million, drinking in communities, although this could
Italcotto, a well-known tile wholesaler that mobile platforms, and potentially turn them to encourage the use of creativity in
sells exclusive products, Stiles plans to negatively affect sales amongst retailers.
into active purchasers, during the holiday addressing mental health issues. (23 October 2020)
expand its footprint in the SA tile industry. season. (4 November 2020) (3 November 2020)
(29 October 2020)
Stricter Regulations Proposed for
Digital Receipts for Smart Shoppers Checkers Enters Supply Deal with
Pick n Pay Acquires Delivery Startup Advertising of Unhealthy Food and
Launched by Pick n Pay Local Egg Farming Business
Bottles Alcohol
As part of the company’s efforts to reduce Checkers has entered a supply deal with
Well-known retailer, Pick n Pay (PnP) Stricter regulations, regarding the advertising
unnecessary wastage, Pick n Pay (PnP) has local egg farming business, Farmer Angus
has agreed to purchase Bottles, the and marketing of alcohol and unhealthy
launched digital receipts for members of its Eggs, a 51% black female-owned business,
on-demand delivery startup, with the foods, have been proposed by the
Smart Shopper programme. In particular, the which offers its products at some Checkers
acquisition expected to be completed by Department of Communications and
digital receipts can be emailed and loaded stores in the Western Cape. Additionally, this
November 2020. Through the acquisition, Digital Technologies. These regulations are
on the customer’s PnP mobile application for supply deal allows for the potential of
PnP is attempting to build on the success designed to protect South African children
90 days, making it easy to access and review. expanding the arrangement on a national
it has achieved in its existing partnership from potentially harmful advertising, and
(29 October 2020) scale. (2 November 2020)
with Bottles in recent months, whilst also will impact a variety of sectors, including the
strengthening its online grocery business. local retail sector. (12 October 2020)
(20 October 2020) Standard Develops Checkout-Free Dis-Chem Foundation Provides Water
Retail Facility Donations to Port Elizabeth NGOs
A retail convenience store, located at the In response to Port Elizabeth’s critical need
University of Houston, has been converted for water, the Dis-Chem Foundation has
into a completely checkout-free facility by offered its support to three NGOs, in the form
Standard. The company partnered with of donations of water. This action comes as
Chartwells Higher Education, to add its dam levels around the Nelson Mandela Bay
machine-vision system to the store, allowing municipality fell below 20% capacity,
for 24 hours of on-the-go consumption. resulting in severe water shortages
(12 October 2020) throughout the region. (16 October 2020)INTELLIGENCE TRENDS & MERGERS & INNOVATION & SOCIO-POLITICAL LEGISLATION OVERVIEW NEWS ACQUISITIONS TECH TRENDS FACTORS TRENDS & NEWS
INTELLIGENCE TRENDS & MERGERS & INNOVATION & SOCIO-POLITICAL LEGISLATION
OVERVIEW NEWS ACQUISITIONS TECH TRENDS FACTORS
GLOBAL NEWS
Nielsen International Surge in Amazon Third Moody’s Announces
Grocery Shopper and Quarter Retail Product Stable Retail Outlook
Technology Survey Sales Due to COVID-19 Heading into 2021
Results Retail analysts at the global rating agency,
The global retail giant, Amazon, announced that Moody’s, have revised their outlook for the retail
it had achieved US$52.8 billion in sales value in industry from negative to stable, reflecting a rise in
Results from the Nielsen International Grocery Shopper the third quarter of 2020, up from US$39.7 billion expectations for the industry’s performance. The
and Technology Survey have been announced, in the third quarter of 2019. According to the agency had previously predicted a decline of up
providing key insights regarding consumer shopping Managing Director of GlobalData, Neil Saunders, to 30% in operating profits but now indicated that
journeys, and the role that technology plays in these Amazon’s latest results indicate that the company it expects a 15% decline in profits in 2020, with
journeys. The survey was conducted in partnership continues to benefit from the disruption, due to an estimated improvement of 20% predicted for
with Diebold Nixdorf, and was coordinated through the COVID-19 pandemic. 2021.
Nielsen’s Global Consumer Business, providing retailers
globally with key insights on consumer needs in terms More specifically, Amazon reported an increase The COVID-19 pandemic, and associated
of technology. in revenue from its third-party seller services lockdowns, have had a significantly negative
increasing by 55%, to reach US$20.4 billion in the impact on the global retail industry, as a result of
The survey involved the surveying and segmentation of third quarter of 2020, whilst online sales increased store and company closures, wary consumers, and
15.000 shoppers, between the ages of 16 and 65, across by 38% to reach US$48.4 billion in 2020. These stay-at-home orders, as well as social distancing
15 countries. From the surveys, six consumer typologies results do not include the company’s Prime Day, measures. Therefore, the stable outlook predicted
were generated, with each of these typologies that took place in September 2020, rather than by Moody’s provides some relief to industry
demonstrating a unique motivation, in terms of how July, which is when it typically occurs. stakeholders.
and why technology is utilised by consumers along the
course of their shopping journeys. The fact that sales from Prime Day were not In particular, it is predicted that department stores
included in these positive results, indicates that and apparel retailers, which have been particularly
More specifically, most of the consumers surveyed the company has fared particularly well during hard-hit, will rebound strongly in 2021, some of
(25%) were categorised as “Hands-On Pragmatists”, the COVID-19 pandemic. However, holding the which include Macy’s, Nordstrom, Kohl’s, Gap,
defined as busy, rational, problem solvers preferring company’s Prime Day later in the year could be TJX Cos., and Ross. Furthermore, in September
self-checkouts, and making use of technology to save less beneficial, since the holidays typically already 2020, particular retail segments experienced sales
time, whilst also prioritising efficiency. Additionally, this introduce increases in terms of demand, whilst increases, with increases of 23.8% year-over-year
type of consumer demands instant access to products, mid-year demand is typically boosted by Prime for online retailers, 14.4% for recreational goods
and are also the most likely to visit a store to discover Day. retailers, 19.1% for building and garden retailers,
new products. and 4.6% for furniture retailers.
Moreover, the digital momentum that occurred
Other categories that emerged included “Well- in the second quarter as a result of the pandemic However, although the Moody’s analysts predict
balanced Traditionalists”, “Sensible Socialisers”, declined, with the company’s product sales strong overall sales growth of between 3% and 5%
“Hesitant Potentials”, “Modern Convenience Seekers”, slowing from 40.1% in the second quarter, to 32.8% for 2020 and 2021, it was indicated that this was
and “Aspirational Tech Fans”. According to Consumer in the third quarter of 2020. Nevertheless, Amazon not enough to predict overall positive growth due
Insights Leader at Nielsen, Waqas Cheema, it will is predicted to achieve positive quarter four results, to the continuing outbreaks of COVID-19 globally,
be important for retailers to take different shopper due to rising online holiday demand. as well as continuing economic recessions and
segments into account, even those less enthusiastic consumer strains.
about new technology.
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SA NEWS
New Online Shopping Shoprite Checkers and Increases in Grocery
Platform to be Launched Pick n Pay Confirm End Costs Affecting SA
in SA to Exclusive Lease Shopper Behaviour
A new online shopping platform, known as
Agreements
Everyshop, is set to be launched in SA and will The Ask Afrika COVID-19 Tracker study, conducted
offer consumers a wide range of technology Both Shoprite Checkers and Pick n Pay (PnP) have between the end of August and September
products, computers, and appliances, as well as confirmed, that they will no longer be enforcing 2020, has shown that significant proportions of
additional products from leading brands. The exclusivity clauses on lease agreements, with consumers perceived the price of food and staple
new platform will compete with Takealot, and is regards to small and independent retailers. foods to have increased by 15%, for the prior five
backed by a member of Pepkor Holdings, the JD This is a result of agreements that were signed months. As a result, consumers are switching to
Group. with the Competition Commission, following cheaper brands and remaining loyal to brands, such
recommendations made in the commission’s as Shoprite, that are perceived not to have increased
Grocery Retail Market Inquiry (GRMI). prices, amongst other behavioural changes.
JD Group currently provides consumers with a
wide range of products through its retail store
chains, some of which include technology-focused In the GRMI report, it was found that long- The Ask Afrika COVID-19 Tracker study results
brands, such as Incredible Connection and HiFi term exclusive lease agreements result in harm are based on 11 600 interviews with consumers,
Corp, as well as household goods retailers such as to consumers, as a result of the limitation of conducted throughout each level of the national
Rochester, Sleepmasters, Bradlows, and Russels. consumer choice, as well as the reduction of lockdown. Significantly, 84% of respondents
competition within shopping centres. The report indicated that they had seen an overall food price
found that these lease agreements also prevent increase, estimating the prices had increased by
These existing stores are supported by a national 15% in the past five months.
network, including 16 distribution centres. the participation of both Small and Medium
Although these stores already offer home Enterprises (SMEs) and historically disadvantaged
deliveries, an increased need for convenience persons in retail. These perceptions are based in reality, with the
amongst consumers, resulted in the development Pietermaritzburg Economic Justice and Dignity
of the new online shopping platform. As part of the agreement, PnP has undertaken to Group indicating the cost of a food basket to
waive exclusivity against small and independent have increased by 7.8%, over the past 5 months.
grocery retailers, speciality, and limited line Accordingly, 69% of respondents indicated they
More specifically, Everyshopis designed to offer have been forced to choose cheaper brands over
South African consumers a “one-stop” shopping stores in all shopping centres, as well as
supermarkets, owned and controlled by historically their preferred favourite brands.
channel, featuring curated products from the
group’s existing ranges, as well as adding new disadvantaged persons. The company also
product categories and leading brands. undertook to not sign any new lease agreements Furthermore, the results indicated that consumers
containing exclusivity clauses, amongst others. are likely to remain loyal to brands that are not
perceived to have significantly increased their
Furthermore, the platform is designed to offer a prices, such as Shoprite, as well as Pick n Pay,
unique and customised departmental shopping Competition Commissioner, Tembinkosi Bonakeke,
indicated that the opening of shopping centre that have been seen distributing food parcels.
experience, that can utilise the group’s existing Additionally, higher grocery costs are also ensuring
capabilities in terms of e-commerce, logistics, and spaces as a result of these agreements, would
provide opportunities for new businesses to that consumers plan shopping lists carefully, to
fulfilment. Although no announcement has been ensure that they stick to pre-defined budgets, whilst
made regarding the platform’s launch date, an emerge in the South African retailing environment,
providing consumers with product choice and many are even asking cashiers to alert them once
official announcement is expected to be made their total goes over particular amounts.
sometime in November 2020. alternatives.
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COMPETITOR NEWS
TFG’s Digital Woolworths Invests Shoprite Launches
Transformation Enables R1 billion in Pricing to Xtra Savings Rewards
Management of Remain Accessible Programme
COVID-19 Challenges In an attempt to ensure its products remain as On 12 October 2020, the Shoprite Group launched
accessible as possible to the greatest number of the new Shoprite Xtra Savings rewards programme,
consumers, Woolworths recently announced that it in its Shoprite branded stores. This comes a
JSE-listed retail group, The Foschini Group (TFG), has
will be investing R1 billion in its pricing over the next year after the Checkers XtraSavings rewards
indicated that it is seeing the positive results of its
two to three years, to ensure its products continue programmewas launched, which has already
previously launched digital strategy, as well as R500
to offer the greatest value. This investment includes seen over 5 million customers sign up for the
million investment into its digital transformation. The
a commitment to its Food and Fashion businesses. programme.
group launched its digital transformation plan three
years ago, which has enabled it to easily manage the
challenges brought on by COVID-19. According to Zyda Rylands, Chief Executive Officer According to the Shoprite Group’s Chief of Strategy
of Woolworths SA, the group has been focused on and Innovation, Neil Schreuder, the XtraSavings
investing in the pricing of key product lines and programme’ssuccess lies within its simplicity and
More specifically, the group’s successful digital
categories in recent years, to ensure the group transparency, with it having no points nor levels.
transformation has enabled it to communicate
continues to provide the value expected by its Therefore, the Shoprite XtraSavings card will offer
remotely with over 25 000 employees, as well as
customers. Additionally, this need for value has customers instant cash savings, in a similar manner
ensure the safe and efficient re-opening of stores,
been boosted by the COVID-19 pandemic, due to to the Checkers XtraSavings card.
and meet an increase in e-commerce demand.
its significant negative impact on the economy and
the financial well-being of Woolworths customers. In particular, customers using the Shoprite Xtra
Key technological areas that the group has focused
Savings card will receive discounts of up to 40%
on include: Radio Frequency Identification (RFID),
As a result, the group is set to invest more in its on everyday essentials, combo deals, as well as
e-commerce growth, the launch of the “myTFGworld”,
prices to ensure it remains relevant and accessible, added benefits, such as free airtime with certain
and “Sportscene” applications, integrating OneStock,
whilst still delivering on quality. In the first phase, product purchases, which are automatically applied
the Yoobic visual merchandising system, and
it will be investing R250 million in the pricing of at the till. The XtraSavings cards can be used
applications for staff, including TFGLearn and TFG-on-
its Foods division, as well as R250 million into its at both Checkers and Shoprite branded stores,
the-go.
Fashion business’ prices in the current financial although brand promotions and discounts are only
year, with the focus being on the most popular applicable to the respective brands.
In particular, TFG’s implementation of RFID tech Woolworths products.
Technology was one of the largest and fastest globally,
Furthermore, the XtraSavings rewards programmeis
enabling quick and efficient stocktaking with 97%
In terms of its Foods business, Woolworths will expected to expand to become the biggest rewards
accuracy. TFG’s jewellery brands, Sterns and American
initially focus on its fresh chicken range, which programmeof its kind in SA, due to its ability to
Swiss, went online in August 2020, taking the group’s
includes whole and portion chicken, excluding Easy access the Shoprite Group’s 19.3 million shoppers.
online stores in its e-commerce marketplace to 20.
Cook, marinated, and crumbed chicken. In addition Moreover, the programme has been introduced at
to this, the group has applied more promotions on a time when customers are increasingly seeking
Furthermore, since the myTFGworld application everyday basics across the Groceries, Household, value, as household incomes have come under
launched in July 2020, it has reached 33 000 and Personal Care categories. In terms of the pressure due to lockdown restrictions.
active users. Also, TFG rolled out the Yoobic visual Fashion business, selected key wardrobe essentials
merchandising system, which enables TFG to send will also receive significant pricing investment.
instructions regarding store window dressing to the
store manager’s mobile device.
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COMPETITOR FINANCIAL RESULTS
Rex Trueform Clothing Clicks Group Limited Pick n Pay Holdings Limited
Company Limited
According to the latest reviewed annual group According to Pick n Pay Stores Limited’s latest
results for the year ended 31 August 2020, the unaudited interim results for the 26 weeks
According to the latest annual financial results Clicks Group showed strong and resilient ended 30 August 2020, the group experienced a
for the year ended 30 June 2020, Rex Trueform performance despite a challenging trading difficult trading environment due to the impact
Group Limited experienced a challenging environment, both globally and locally. This is of COVID-19 but has proven to be resilient. This
trading environment, which was significantly reflected in the group’s turnover, which increased is evidenced by the 2.6% increase in the group’s
impacted by the COVID-19 pandemic. This is by 9.6% to reach R34.4 billion in 2020, while its comparable turnover, increasing from R43.1 billion
illustrated by the 11.9% decrease in company UPD business’s turnover increased by 11.2%. in the 26 weeks to 1 September 2019, to
revenue, from R708.4 million in 2019 to R44.2 billion in the 26 weeks to 30 August 2020.
R624.2 million in 2020. In terms of the group’s UPD business, UPD reported
strong growth and gained market share after the In SA, comparable turnover increased by 3.4%
Furthermore, group operating profit decreased securing of new wholesale and bulk distribution in the same period, increasing from R41.3 billion
significantly by 398.8%, from R25.0 million contracts. UPD expenses increased by 17.9%, in 2019 to R42.7 billion in 2020, with this growth
in 2019 to a loss of R74.6 million in 2020, including the costs relating to the new wholesale occurring despite the challenging operating
whilst gross profit margin also decreased from and bulk distribution contracts. environment. However, the group’s sales and
52.6% in 2019 to 47.8% in 2020. Moreover, earnings in the first half of the financial year were
headline earnings per share decreased In terms of retail business, retail sales increased impacted negatively by COVID-19, and measures
significantly by 217.9%, to a loss of 86.2 cents by 7.3% and by 3.4% in comparable stores, with a taken to curb its spread by the government, with
in 2020, compared to 73.1 cents earnings selling price inflation of 2.2%. At the same time, 20% of the group’s revenue being affected by
per share in 2019. group retail expenses increased by 6.5%, which trading restrictions during different stages of
can be attributed to continuous investment in lockdown.
In terms of its retail business, which includes new Clicks stores and pharmacies in the past year.
Queenspark (Pty) Ltd, turnover from retail sales Clicks opened 39 stores in the review period, Furthermore, sales were negatively impacted
decreased from approximately R678.9 million expanding its retail footprint to 743 stores, and by reduced trading hours, limits on the number
in 2019, to approximately R578.7 million in opened 40 new pharmacies, reaching a total of 585. of customers allowed in the stores, as well as
2020. temporary store closures. All these measures
In addition, headline earnings per share increased had an impact on the group’s revenue, which is
The group’s turnover was also negatively by 11.7 to 754 cents in 2020, whilst earnings per share estimated to have resulted in approximately
impacted by COVID-19 and the national increased by 11.4% to 751 cents in 2020. Headline R2.8 billion in lost sales, during this period.
lockdown, which resulted in sales being lost earnings increased by 12.2% to reach R1.9 billion
during level five lockdown, between 27 March in 2020. Additionally, core retail sales grew 8.7% year-
2020 and 30 April 2020. In particular, the on-year (6.4% like-for-like), which includes food,
estimated loss in sales during level five of the The group expects the consumer environment to groceries, and general merchandise, but excludes
lockdown amounts to at least R57.4 million, be extremely constrained in the next year, due to liquor, clothing, and tobacco, while growth in
with the negative impact on sales being the lasting impact of COVID-19. The first half of the SA was 9.9% (7.6% like-for-like). Therefore, this
predicted to last until the end of the year, to new financial year was also impacted by protest represents a 4.2% volume growth of the group’s
reach total losses of at least R134.7 million. actions at Clicks stores in early September 2020. core food and grocery offering in SA.
Additionally, widespread job losses are expected as
an aftermath of the pandemic.
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MERGERS, ACQUISITIONS & PARTNERSHIPS
Stiles Incorporates Pick n Pay Acquires
Italcotto Into Its Business Delivery Startup Bottles
Operations Well-known retailer, Pick n Pay (PnP) has agreed to
purchase Bottles, the on-demand delivery startup,
On 1 November 2020, the South African tile and with the acquisition expected to be completed by
sanitaryware retail store, Stiles, will incorporate November 2020. Through the acquisition, PnP is
Italcotto into its business operations. Through attempting to build on the success it has achieved
the incorporation of Italcotto, a well-known tile in the existing partnership with Bottles, whilst also
wholesaler that sells exclusive products, Stiles strengthening its online grocery business.
plans to expand its footprint in the SA tile industry.
With the acquisition, Bottles’ founding members,
With the incorporation of Italcotto, several Enrico Ferigolliand Vincent Viviers, as well as staff
members of the company’s experienced sales and key managers, will be joining PnP. According
team will join Stiles to continue servicing its to PnP Chief Executive Officer, Richard Brasher,
longstanding clients, as well as assist with the the online grocery space in SA has experienced
transition into the new chapter of the Stiles brand. significant growth in the past seven months. In
Furthermore, it was indicated that the Stiles response to this, PnP has increased the number of
stores will be strengthened, through strategic stores offering delivery or click-and-collect services.
collaboration with Calore Fireplaces.
The services provided by Bottles were the first of
This collaboration will offer clients the opportunity their kind, in terms of promising the fulfilment of
and convenience of shopping for various products orders within 60 minutes. Additionally, following
like tiles, taps, fireplaces, sanitary ware, braais, and the ban on the sale of alcohol, Bottles re-purposed
fire pits, amongst other product categories, under its application in four days to offer on-demand
one roof. delivery of “grocery essentials” to customers.
Moreover, the Bottles application has had more
Furthermore, Stiles’ CEO, Steve Joubert stated than 700 000 downloads and has more than
that the integration of Italcotto into the Stiles 350 000 registered users.
brand will create several opportunities for Stiles to
become the leading tile retailer in SA. He added Brasher stated that the group is delighted to be
that the company looks forward to the new acquiring Bottles as it will enable the group to
ventures with Italcotto and Calore Fireplaces and build on the momentum it has already gained
is optimistic about Stiles’ prospects in the future. through its existing partnership, by further
capitalising on Bottles’ agility, innovation, and
marketing flair.
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INNOVATION AND TECHNOLOGY TRENDS
Dior Announces Ability Digital Receipts for Standard Develops
to Try on New Sneakers Smart Shoppers Checkout Free Retail
Using Augmented Launched by Pick n Pay Facility
Reality As part of the company’s efforts to reduce A retail convenience store, located at the University
unnecessary wastage, Pick n Pay (PnP) has launched of Houston, has been converted into a completely
Luxury clothing and apparel brand, Dior, digital receipts for members of its Smart Shopper checkout-free facility by Standard, an Artificial
has launched its B27 sneaker, incorporating programme. In particular, the digital receipts can Intelligence (AI) company providing autonomous
augmented reality (AR) lenses on Snapchat be emailed and loaded onto the customer’s PnP checkout solutions to retailers. The company
which allows users to try-on and buy the sneaker mobile application for 90 days, making it easy to partnered with Chartwells Higher Education, to
virtually. This immersive experience is designed to access and review. add its machine-vision system to the store, allowing
engage passive purchasers on mobile platforms, for 24 hours of on-the-go consumption.
and potentially turn them into active purchasers,
during the holiday season. The digital receipts are instantly sent to customers’
email or mobile application, once their transactions The installation at the University of Houston store
are completed at any PnP store, including its is known as “Market Next”, and only allows for the
The company has introduced the AR try-on Clothing, Liquor, and Express stores. Customers payment of purchases through its camera-based
experience to engage users of Snapchat, through a automatically receive summary slips at checkout system. This contactless payment system is seen as
unique e-commerce experience, that guides these and, in cases where customers who have opted valuable by the university, in preventing the spread
users to the point of sale. In addition to raising into the digital receipt programme would like a of COVID-19, and plans to roll out the system to its
awareness of the Dior brand, the incorporation full-length printed slip, they can simply request one other campuses.
of the AR lens turns the Snapchat platform into from the cashier.
a direct sales channel, enabling the company to
In its installations, Standard makes use of a
reach consumers unable to get to nearby stores.
Additionally, should customers wish to return a combination of both AI and cameras to track items
product they have purchased, they will be required that are removed by individual shoppers, with
This virtual try-on experience, offers consumers to show their digital receipt from either their email goods being charged to predetermined payment
the opportunity to see what the sneakers will or mobile application, or show the summary slip methods when leaving the store. The company also
look like while wearing them, partially replacing which incorporates a scannable barcode. High-value plans to expand this type of checkout-free store,
the in-store experience of trying the shoes on. items, or those items that come with a warranty, and already operates its own checkout-free store in
This has become particularly important, with will be printed on a summary slip and provided to San Francisco.
many shoppers being unwilling or reluctant to customers.
try on clothes in stores, due to health and safety
The technology trend, of allowing shoppers to pay
concerns resulting from the COVID-19 pandemic.
The programme has already proven to be successful, for their retail purchases without being required to
with almost 13 000 customers having signed up for go through a checkout station, is spreading across
Furthermore, the Dior AR try-on and e-commerce the pilot phase earlier in 2020, and an additional the retail sector. This is illustrated by companies
experiences are another indication of the 7 000 having already opted to receive digital such as Amazon and Giant Eagle, that are also
integration of advertising and online shopping by receipts. opening stores incorporating checkout-free
the Snapchat platform, with digital commerce capabilities.
becoming an increasingly bigger priority for social
media companies. Specifically, Snapchat noted
that AR experiences can significantly assist brands
in engaging with the platform’s mainly younger
audience.
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Vans Supports Mental Checkers Enters Supply Dis-Chem Foundation
Health Focused Charities Deal with Local Egg Provides Water Donations
with $1 Million Donation Farming Business to Port Elizabeth NGOs
On 19 November 2020, Vans will be hosting Checkers has entered a supply deal with local In response to Port Elizabeth’s critical need for
its second annual Checkerboard Day, focused egg farming business, Farmer Angus Eggs, a 51% water, the Dis-Chem Foundation has offered
on mental health and well-being. As part of black female-owned business, which offers its its support to three NGOs, in the form of water
this event, Vans will be supporting 10 mental products at some Checkers stores in the Western donations. This action comes as dam levels around
health-focused charities around the world with Cape. Additionally, this supply deal allows for the the Nelson Mandela Bay municipality fell below
a collective donation of $1 million, to encourage potential of expanding the arrangement on a 20% capacity, resulting in severe water shortages
the use of creativity in addressing mental health national scale. throughout the region.
issues.
Farmer Angus Eggs’ regenerative livestock farmer, The Dis-Chem foundation responded to the
In particular, Vans is focusing on the vital role of Angus McIntosh, had focused on upskilling and current drought in the area by donating water
creativity in helping individuals and communities empowering his farmworkers, after which he sold to three NGOs, for distribution to local and
address mental health and well-being, which has 85% of this egg business to some of his former surrounding communities, in dire need of water.
become even more important due to the isolation employees, making it 51% female black-owned. In particular, the three NGOs that the foundation
resulting from COVID-19. Moreover, the Vans This sale instantly made the employees business has donated water to include the Eastern Province
Checkerboard Day was initially launched in 2019 managers and shareholders and, through the deal Child & Youth Care Centre, MTR Smit Children’s
as a global initiative, to champion the power of with Checkers, these former employees have been Haven, and Ubuntu Pathways.
creative expression. given the opportunity to expand its model on a
national basis. The Eastern Province Child & Youth Care Centre
Vans has selected 10 charities around the world, provides residential care to orphaned and
with a shared purpose of utilising creativity- Currently, Farmer Angus Eggs are only available displaced children aged between three and 18
focused programmes as resources, for coping with at two Checkers stores in the Western Cape, years old, whilst the MTR Smit Children’s Haven
stressors that negatively impact mental health including Constantia Emporium and the Checkers is focused on providing accommodation for
and well-being. in Mill Street in Stellenbosch. Farmer Angus Eggs mentally disabled children removed from their
“Eggmobiles” are stationed in each of these stores, parents in terms of the Child Care Act, as well as
Each charity is set to receive $100 000 from T offering customers the opportunity to pick their statutory children between the ages of three and
he Vans Checkerboard Fund at Tides Foundation, eggs out. 18 years. Moreover, Ubuntu Pathways provides an
which can then be used in support of the integrated support system of education, social,
respective organisation’s mission. According to Shareholder and Director of Farmer and health support in townships.
Angus Eggs, Mbhekiseni Khosa, becoming a
Furthermore, consumers globally can support shareholder and director of a business is a proud Managing Director of Ubuntu Pathways, Tarryn
these charities by providing additional donations. moment, and that with the help of Checkers, it will Mthimkhulu indicated her appreciation in terms
This can be done by purchasing a limited- be possible to empower other South Africans. of having generous partners, mentioning the Dis-
edition Vans Checkerboard Day t-shirt, or a pair Chem Foundation as enabling the organisation
of Authentics. Vans will contribute 100% of the to continue to provide essentials to local
proceeds for each of these products that are communities, and save lives.
sold, to The Vans Checkerboard Fund at Tides
Foundation.
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Western Cape to Make Stricter Regulations
Drinks High in Alcohol Proposed for Advertising
More Expensive of Unhealthy Food and
Alcohol
The Premier of the Western Cape, Alan Winde,
announced that the provincial government intends
to increase the price of beverages with a high Stricter regulations, regarding the advertising and
alcohol percentage, by raising minimum unit marketing of alcohol and unhealthy foods, have been
pricing. It is suggested that this approach could be proposed by the Department of Communications
effective, in terms of reducing the prevalence of and Digital Technologies. These regulations are
binge drinking in communities, although this could designed to protect South African children from
negatively affect sales amongst retailers. potentially harmful advertising, and will impact a
variety of sectors, including the local retail sector.
More specifically, minimum unit pricing stipulates
the floor price for a unit of alcohol, and an increase The regulations were contained in a draft Audio
would therefore result in increased prices amongst and Audiovisual Content Services (AAVCS) white
some of the cheapest alcoholic products on the paper, published by the department in early October
market. 2020. The paper proposes that the regulator should
develop regulations, in terms of the advertising
In addition to raising minimum unit pricing, it of both alcohol and unhealthy foods by different
was further indicated that the province would be stakeholders, including retailers.
considering stricter times for the sale of alcohol,
even after the end of the National State of Disaster. More specifically, the paper proposes that
regulations should be developed to regulate the
These suggested changes will be made in the form advertising of all packaged and unpackaged harmful
of proposed amendments to the Western Cape foods, that are high in salt, sugar, fats, saturated
Liquor Act, which the provincial government intends fats, trans-fatty acids, or foods that do not fit within
to fast-track. However, it was further indicated that national or international nutritional guidelines.
this tougher approach to alcohol will need to be Although regulations were set to be introduced in
paired with the introduction of incentives, for liquor late 2019 or early 2020, these have not been mooted.
outlets and retailers.
In terms of alcohol, draft regulations have been
Furthermore, it was indicated that the process of previously mooted by both the government and
making unlicensed vendors compliant would need the Democratic Alliance. More specifically, the Draft
to be made easier, which would contribute to the Control of Marketing of Alcoholic Beverages Bill
reduction and eradication of illegal sales of alcohol primarily deals with alcohol advertising, including
within communities in the province. the times alcohol may be shown on television, whilst
the Draft Liquor Amendment Bill proposes the
banning of alcohol sales and marketing on social
media, amongst others.
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