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INTELLIGENCE RETAIL INDUSTRY - COMPILED: OCTOBER 2020 - Old Mutual
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GLOBAL NEWS                                       SA NEWS                                            COMPETITOR                                         COMPETITOR NEWS
                                                                                                     FINANCIAL RESULTS
Four Global Retailers that                        COVID-19 to Permanently Change                                                                        Checkers Xtra Savings Rewards
Continue to Outshine                              Customer Experience                                                                                   Programme Tops the Charts
                                                                                                     Truworths International Limited
Despite the past two decades being a              The outbreak of the COVID-19 pandemic                                                                 The Checkers Xtra Savings rewards
                                                                                                     According to the latest integrated annual
turbulent time for global retailers, a select     has significantly disrupted the way we                                                                programme is the fastest-growing rewards
                                                                                                     report for the 52 weeks ended 28 June 2020,
group of innovative retail companies has          operate, with this expected to continue to                                                            programme of its kind in SA, with more
                                                                                                     Truworths International Limited experienced
found ways to adapt and thrive, overtaking        have long-lasting effects across all sectors. In                                                      than five million consumers having joined
                                                                                                     a challenging trading environment, which
some of the most iconic brands. These             particular, the retail sector has seen extensive                                                      the programme, since its launch in October
                                                                                                     was significantly impacted by the COVID-19
competitors include Target, Amazon, TJ            evolution in several aspects of its operations,                                                       2019. According to Nielsen, the Xtra Savings
                                                                                                     pandemic. This can be seen in group revenue
Maxx, and Walmart. (8 October 2020)               with customer experience seeing the most                                                              rewards programme has played a key role
                                                                                                     decreasing by 8%, from approximately R19.6
                                                  significant transformation. (5 October 2020)                                                          in Checkers gaining R4 billion in market
                                                                                                     billion in 2019, to approximately R18 billion in
Lowe’s New Curbside Trick-or-                                                                                                                           share from its competitors, in the last
                                                                                                     2020. (8 October 2020)
                                                  COVID-19 Impacts SA Retailer                                                                          financial year. (7 October 2020)
Treating Even
                                                  Food Prices                                        SPAR Group Limited
In celebration of Halloween, Lowe’s                                                                                                                     Retailability Repositions Edgars
announced the launch of its curbside trick-       According to the Competition Commission,           According to the latest trading update for the     as a Mass-Market Brand
or-treating event where families can drive        COVID-19 has brought about short-term              48 weeks to 28 August 2020, the SPAR Group
up to their preferred store location and pick     pricing effects, particularly on essential         Limited showed resilient performance during        The well-known retailer, Edgars, will be
up candy and a small pumpkin for free. This       food products, which have seen substantial         a challenging trading environment due to           rebranded as a mass-market brand with
event is a result of the COVID-19 pandemic,       price increases during the lockdown.               the COVID-19 pandemic. This was evidenced          a focus on fashion and beauty products,
and social distancing measures, negatively        These increases were also observed in the          by the fact that group sales increased by          exiting from its homeware division. This
impacting families’ traditional trick-or-         BusinessTech tracker, which outlined various       12.4%, from approximately R99.7 billion in         comes after Edcon finalised the sale of
treating plans. (6 October 2020)                  price points for some of SA’s largest retailers.   2019, to approximately R112 billion in 2020.       parts of Edgars to Retailabilty, with the
                                                  (30 September 2020)                                SPAR Southern Africa sales increased by            company acquiring 130 out of 194 stores.
Walmart Unveils its New Store Design                                                                 4.8%, which is a graphical reflection of the       In addition, approximately 5 200 jobs have
                                                  SA’s Largest Retailers Remove                      impact of the pandemic on the group’s              been saved. (22 September 2020)
Walmart unveiled its reimagined store
design at the end of September 2020, which        TRESemmé Products from Shelves                     business. (18 September 2020)
                                                                                                                                                        SPAR Named Overall Winner of the
is set to be rolled out across multiple stores.   During September 2020, some of SA’s largest
This redesign is set to create a seamless                                                            The Foschini Group Limited                         Supplier Development Awards
                                                  retailers decided to stop sales of TRESemmé
omni-shopping experience, with more self-         products, with retailers such as Pick n Pay,       According to The Foschini Group Limited’s          SPAR has recently been named the
checkout kiosks and contactless payment           Woolworths, Dis-Chem, Shoprite Checkers,           trading update for the 22 weeks ended              overall winner of the Absa Business Day
options. The new design was planned before        and Clicks removing the brand’s products           29 August 2020, the group reported a               Supplier Development Awards, which
the COVID-19 pandemic, however, the               from its shelves. This comes following             challenging trading environment across all         was announced during a recent digital
pandemic sped up plans for the new store          widespread protests over a controversial           its major territories, including SA, the UK, and   event. The awards are held annually and
design rollout, with contactless features.        advert regarding black hair.                       Australia. This can be seen by retail turnover     recognise the need to close the gap
(30 September 2020)                               (11 September 2020)                                decreasing in each business division of the        between suppliers and corporates in SA.
                                                                                                     group. (15 September 2020)                         (18 September 2020)
INTELLIGENCE RETAIL INDUSTRY - COMPILED: OCTOBER 2020 - Old Mutual
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RETAIL INDUSTRY INTELLIGENCE MONITOR OVERVIEW

MERGERS,                                          INNOVATION &                                    SOCIO-POLITICAL                                  LEGISLATION
ACQUISITIONS &                                    TECHNOLOGY TRENDS                               FACTORS
PARTNERSHIPS                                                                                                                                       Launch of SA Food Loss and Waste
                                                                                                                                                   Voluntary Agreement
                                                  New Sportscene App Launched                     Pick n Pay School Club Resumes
                                                                                                  Delivery of Bars of Soap to Schools in           During September 2020, the Consumer
The Foschini Group Receives                       Sportscene recently launched its new
                                                                                                                                                   Goods Council of South Africa (CGCSA)
                                                  Sportscene app, with the aim of enhancing       Need
Approval to Acquire Jet Stores                                                                                                                     launched the South African Food Loss and
                                                  the overall shopping experience for its         In an attempt to curb the spread of COVID-19,
The Foschini Group (TFG) recently received                                                                                                         Waste Voluntary Agreement. This agreement
                                                  customers. The app will allow customers         Pick n Pay (PnP) School Club, in collaboration
approval from the Competition Tribunal to                                                                                                          is set to ensure that food manufacturers and
                                                  to search for all inventory available at        with Willowton Group, resumed the delivery
acquire Jet Stores, subject to conditions.                                                                                                         retailers are committed to reducing food
                                                  Sportscene stores, across the country,          of donated soap bars to schools in need in
This approval comes after the Competition                                                                                                          waste, to achieve the United Nation’s (UN)
                                                  as well as offer a range of other features.     the Western Cape, Gauteng, and KwaZulu-
Commission investigated competitor                                                                                                                 Sustainable Development Goal, to halve
                                                  (6 October 2020)                                Natal provinces. This comes as lockdown
concerns that the merger will give TFG                                                                                                             global food waste by 2030. (29 September
                                                                                                  regulations have been eased, with the            2020)
a dominant position, however, was not
                                                  CyberEcomm Introduces New                       president urging South Africans not to
convinced that this is the case.
(23 September 2020)                               E-Commerce Shopping Solution                    become complacent. (29 September 2020)

                                                  The Durban-based digital solutions company,
                                                                                                  Converse Supports Youth Mentorship
Pick n Pay Partners with UCOOK                    CyberEcomm, recently introduced its new
                                                  all-in-one shopping platform, ShopESpot.        and Empowerment
Pick n Pay recently entered an exclusive retail   This platform allows SA businesses to
partnership with UCOOK and will now stock                                                         Converse has pledged a $1 million
                                                  develop an online presence and tap into         investment in a new accelerator programme,
its Craft Meals range of ready-made frozen        the booming digital and online economy.
meals. This partnership forms part of the                                                         which has been dubbed Converse “All Star
                                                  The new platform allows SMMEs and larger        Captains”, that will run over two years. With
retailer’s continuous expansion of its growing    corporates to easily build an e-commerce
frozen range. The partnership will allow                                                          this investment, the company targeting the
                                                  website, for products and services to be sold   youth, to help drive the progress it wants to
customers, to purchase their UCOOK meals          online. (22 September 2020)
from a physical store, for the first time.                                                        see in the world. (23 September 2020)
(16 September 2020)
                                                  Game Debuts New Tech-Based Retail               Clicks Actively Focusing on
                                                  Store                                           Transformation
                                                  The Massmart-owned retailer, Game, recently     Following the resignation of Click’s Non-
                                                  debuted its all-new, tech-based concept         Executive Director, Nonkululeko Gobododue
                                                  store in the Mall of Africa, with plans to      to the recent racist TRESemmé advert, which
                                                  expand to other locations. This new design      was published by the retailer, Clicks has
                                                  has been optimised to get customers in and      decided to focus on its transformation. The
                                                  out effectively, whilst reducing stress for     group will be working actively with an inter-
                                                  shoppers and staff. (17 September 2020)         ministerial team, which will implement and
                                                                                                  monitor its transformation initiatives.
                                                                                                  (17 September 2020)
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TRENDS
& NEWS
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GLOBAL NEWS

Four Global Retailers that Lowe’s New Curbside                                                                    Walmart Unveils its
Continue to Outshine       Trick-or-Treating Event                                                                New Store Design
Despite the past two decades being a turbulent            In celebration of Halloween, Lowe’s announced           Walmart unveiled its reimagined store design at
time for global retailers, a select group of innovative   the launch of its curbside trick-or-treating event.     the end of September 2020, which is set to be
retail companies has found ways to adapt and thrive,      Similar to a number ofother retailers, Lowe’s is        rolled out across multiple stores. This redesign
overtaking some of the most iconic brands. These          engaging with Halloween customers in an entirely        is set to create a seamless omni-shopping
competitors include Target, Amazon, TJ Maxx, and          different way this year, as a result of the COVID-19    experience, with more self-checkout kiosks and
Walmart.                                                  pandemic and social distancing measures,                contactless payment options.
                                                          negatively impacting families’ traditional trick-or-
This new generation of competitors includes Target,       treating plans.                                         According to Walmart Chief Customer Officer
which consistently stands out with its designer
collaborations, that make names like Mizrahi, Rodarte,
                                                                                                                  and Executive Vice President, Janey Whiteside,
and Phillip Lim accessible to the everyday shopper.       As such, Lowe’s has launched its new curbside           the new store design was planned before the
Moreover, the retailer has built one of the most robust   Halloween offering to keep this tradition alive.        COVID-19 pandemic. However, the pandemic sped
private-label businesses in the industry, investing       Starting on on 10 October, families can book a spot     up the retailer’s plans for the new store design
billions into upgrading its stores and experimenting      online for the Lowe’s Halloween experience at a         rollout, with contactless features. This design is set
with services, such as curbside pick-up and quasi-        nearby location. This will entail families driving up   to be rolled out in 200 locations, within this fiscal
distribution centres.                                     to their preferred store location, picking up candy     year ending early 2021, with 1 000 to be rolled out
                                                          and a small pumpkin for free, through the curbside      by the next fiscal year.
The second retailer, Amazon, has stayed ahead             delivery offering. Customers are welcome to come
through its diversified product array and nascent         dressed in their Halloween costumes, however,           In terms of the new design, signs will be updated
marketplace business. Among its most notable              costumes are not a requirement.                         to reflect the Walmart app icon, and visual
triumphs, is the Amazon Prime membership program,                                                                 reminders will be visible throughout the stores,
which encourages loyalty and drives business to other     Thereafter, on on 28 October, the retailer is           to encourage shoppers to download the app and
Amazon services.                                          encouraging customers to carve the pumpkin              use the item finder map to navigate around the
                                                          with a message of gratitude to first responders,        physical store. This is aligned with the new design’s
Additionally, despite the retailer TJ Maxx being          in celebration of National First Responders Day.        primary focus, of getting what you want as quickly
steadfastly offline, the off-price giant has long set     Customers are then encouraged to share their            as possible, with the new layout bringing greater
itself apart through its in-person experience. In         creations on social media, using the #BuildThanks       visibility to sections of the store.
particular, its in-store “treasure hunt” experience,
                                                          tagline.
which encourages shoppers to search for bargains, is
one of the reasons some analysts call the company’s                                                               Furthermore, self-checkout kiosks will use
business model “recession-proof”.                         According to Lowe’s Executive Vice President            contactless payment solutions, including Walmart
                                                          of Stores, Joe McFarland, the company knows             Pay, to limit contact between associates and
Lastly, Walmart has continued to outshine, with           that many customers will still want to celebrate        customers. In addition, select stores will have
the company going head-to-head with Amazon.               Halloween, even if the holiday may look a bit           Scan & Go, part of the new Walmart+ membership
Walmart’s “everyday low prices” have offered              different this year. As a result, the company has       programme, which will allow shoppers to scan
consumers a buffer, during economic downturn and          launched this special event, to ensure that the         items as they shop and pay through Walmart Pay.
its international expansion, Sam’s Club membership        tradition of trick-or-treating does not end.
warehouse segment, and its significant digital
investments have further set them apart.

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SA NEWS

COVID-19 to Permanently COVID-19 Impacts SA                                                                          SA’s Largest Retailers
Change Customer         Retailer Food Prices                                                                         Remove TRESemmé
Experience                                                                                                           Products from Shelves
                                                          According to the Competition Commission, COVID-19
                                                          has brought about short-term pricing effects,
The outbreak of COVID-19 has significantly disrupted      particularly on essential food products, which             During September 2020, some of SA’s largest retailers
the way we operate, with this expected to have            have seen substantial price increases during the           decided to stop sales of TRESemmé products, with
long-lasting effects across all sectors. The retail       lockdown. These increases were also observed in the        retailers such as Pick n Pay, Woolworths, Dis-Chem,
sector, specifically, has witnessed extensive evolution   BusinessTech tracker, which outlined various price         Shoprite Checkers, and Clicks removing the brand’s
in its operations, particularly in terms of customer      points for some of SA’s largest retailers.                 products from its shelves. This comes following
experience.                                                                                                          widespread protests over a controversial advert
                                                          Under adverse economic conditions, SA consumers            regarding black hair.
With the customer journey in-store being dramatically     have become more price-sensitive, which has put
different from pre-COVID-19 times, it is expected         pressure on retailers to keep food prices low. However,    In light of the recent concern, regarding the language
that some COVID-19 regulations will morph into the        the onset of COVID-19 has brought about short-term         and images used by TRESemmé to advertise its hair
operational fabric and become a part of the new           pricing effects.                                           product line, major retail brands have decided to
normal.                                                                                                              remove TRESemmé products from its stores. This is a
                                                          The Competition Commission recently published              result of two advertisements, released on the Clicks
                                                          its latest report on food prices during the lockdown.      website, which set off an outcry on social media and
These changes include the evolution of customers’
                                                          This analysis shows that, for some essential products,     sparked widespread protests, led by the Economic
perception of retailers, as more customers are fearful
                                                          such as potatoes and onions, the margins earned by         Freedom Fighters (EFF), at Clicks stores across the
and need reassurance, that the space they are
                                                          retailers have grown substantially over the lockdown       country.
entering is safe. Retailers should ensure that safety
measures are visible, such as masks, sanitisers, and      period.
social distancing markers.                                                                                           The advertisements included one advert, which
                                                          According to the BusinessTech price tracker, which         showed a Black woman’s hair as “frizzy and dull”, and
                                                          tracks a basket of goods commonly found in middle-         the other image showed blonde hair as “fine and flat”
At the same time, customers will still need to be
                                                          class household shopping carts, the average 2020           and “normal”.
welcomed as humans, and brands will need to seek
new ways of enhancing the customer experience.            basket after the worst of the lockdown was 5.6%
Frontline workers will therefore need to connect          higher than in 2019. This further reflects the price       With the content and images of the ad being
with customers, build a relationship, and make the        spikes, despite the low inflation environment.             provided by TRESemmé, retailers decided to halt
customer feel more valued.                                                                                           the sale of the brand’s products. Pick n Pay has
                                                          The most significant price increases were recorded         since removed the products from its shelves while it
                                                          for flour, rice, and sugar, where year-on-year increases   engages with the supplier, whilst Shoprite’s Checkers
COVID-19 has also put a strain on online service
                                                          averaged between approximately 12% and 36%.                supermarket chain and Woolworths Holdings have
offerings, which for most retailers has not been fully
                                                                                                                     also removed the products, stating it does not
developed, to maximise online customer experiences.
                                                                                                                     support ‘the racial biases expressed in the TRESemmé
With more consumers shifting to online purchasing,        In terms of retailers, Woolworths remains the most         campaign’. Dis-Chem was the latest to join this list,
retail groups are having to play catch-up, in order to    expensive option for shoppers, however, this is not        with the company confirming the removal of the
compete with online retail market leaders, such as        across the board. Pick n Pay came in with the second       products on Twitter.
Takealot, Uber, or Amazon.                                highest-priced basket, followed by SPAR. Checkers
                                                          remained the most affordable retailer overall, with the
                                                          cheapest price in six of the 12 items measured.

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COMPETITOR NEWS

Checkers Xtra Savings                                  Retailability Repositions                              SPAR Named as Overall
Rewards Programme                                      Edgars as a Mass-Market                                Winner of the Absa
Tops the Charts                                        Brand                                                  Business Day Supplier
                                                                                                              Development Awards
The Checkers Xtra Savings rewards programme            The well-known retailer, Edgars, will be rebranded
is the fastest-growing rewards programme of its        as a mass-market brand with a focus on fashion
kind in SA, with more than five million consumers      and beauty products, exiting from its homeware         SPAR has recently been named the overall
having joined the programme, since its launch          division. This comes after Edcon finalised the         winner of the Absa Business Day Supplier
in October 2019. According to Nielsen, the Xtra        sale of parts of Edgars to Retailabilty, with the      Development Awards, which was announced
Savings rewards programme has played a key             company acquiring 130 out of 194 stores. In            during a recent digital event. The awards are
role in Checkers gaining R4 billion in market share    addition, approximately 5,200 jobs have been           held annually and recognise the need to close
from its competitors, in the last financial year.      saved.
                                                                                                              the gap between suppliers and corporates in
                                                                                                              SA.
Moreover, since the Xtra Savings rewards               Retailability is a fashion retailer and a holding
programme launch in October 2019, it has had           company of store brands including Legit, Beaver
more than 15 000 customers signing up per day.         Canoe and Style, operates in over 460 stores across    The Absa Business Day Supplier Development
According to the Chief of Strategy and Innovation      South Africa, Namibia, Botswana, Lesotho, and          Awards was held for the third year in 2020.
for the Shoprite Group, Neil Schreuder, the            eSwatini.                                              The awards encourages best practice, and
success of the Xtra Savings programme can be                                                                  collaborative ecosystems between corporates
attributed to the convenience it offers, with offers   According to Norman Drieselmann, Retailability         and suppliers, government and the public
being loaded directly onto the customer’s card.        Chief Executive, the main focus of the Edgars          sector, which all benefits the involved parties
Offer redemption at till points are seamless, with     brand repositioning, is to help bring it back to the
personalised deals automatically being loaded to                                                              and supports the rebuilding of the South
                                                       mass market space in SA. Drieselmann believes
the customer’s Xtra Savings card.                                                                             African economy. A key theme of this year’s
                                                       that the Edgars business started shifting towards
                                                       an upper-income, niche market, which further           event was centred around how dependent
Furthermore, the Xtra Savings Programme’s              drove it away from the average South African           everyone is on each other and how businesses
success can also be attributed to its omni-channel     consumer.                                              should be looking out for each other.
experience, where customers can see their deals
on WhatsApp, USSD, the Checkers website, the           Furthermore, Drieselmann indicated that the new        In terms of the awards, the SPAR Group was
Checkers application, on leaflets, and in-store.       strategy will include finding the right balance        identified as the overall winner, as the retailer
                                                       between private labels and international brands,       stood out as a leader in supplier development.
Checkers believes that the Xtra Savings rewards        that are recognisedby the local market and have
being delivered, are more needed than ever             the right value proposition.
before, with customers increasingly seeking value                                                             In addition to being the overall winner, the
after lockdown. According to Schreuder, the Xtra       As part of the rebranding, the store also plans to
                                                                                                              SPAR Group also won the Rural and Township
Savings programme was developed with its core          relaunch its e-commerce website by the end of          Development Award for its SPAR Rural
being customer-centric, which the group believes       October, as well as restructuring its back office.     Hub programme, which supports small-
is the reason why the programme is leading the         Moreover, the group further aims to ensure Edgars’     scale farmers and creates a market for their
industry in this regard.                               operations is a top priority, as integration moves     products.
                                                       ahead.

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COMPETITOR FINANCIAL RESULTS

Truworths                                         SPAR Group Limited                                 The Foschini Group Limited
International Limited
                                                  According to the latest trading update for the     According to The Foschini Group Limited’s (TFG)
                                                  48 weeks to 28 August 2020, the SPAR Group         trading update for the 22 weeks ended
According to the latest integrated annual         Limited showed resilient performance during        29 August 2020, the group reported a
report for the 52 weeks ended 28 June 2020,                                                          challenging trading environment across all
                                                  a challenging trading environment due to the
Truworths International Limited experienced                                                          its major territories, including SA, the UK, and
                                                  COVID-19 pandemic. This was evidenced by
a challenging trading environment, which                                                             Australia. This can be seen in retail turnover
                                                  the fact that group sales increased by 12.4%,
was significantly impacted by the COVID-19                                                           decreasing in each business division of the group.
pandemic. This can be seen in group revenue       from approximately R99.7 billion in 2019, to
decreasing by 8%, from approximately              approximately R112.0 billion in 2020.
                                                                                                     In terms of retail turnover, the TFG London
R19.6 billion in 2019, to approximately R18.0                                                        business division decreased by 58.1%, TFG
billion in 2020.                                  In terms of the SPAR Southern Africa
                                                                                                     Australia decreased by 28.3%, and TFG Africa
                                                  business, sales increased by 4.8%, which is        decreased by 26.4%. In terms of retail turnover
Furthermore, group retail sales decreased by      a graphical reflection of the impact of the        contributions, TFG Africa contributed 65.2%,
9.2%, from approximately R18.6 billion in 2019,   pandemic on the group’s business. The core         whilst TFG Australia and TFG London contributed
to approximately R16.9 billion in 2020, with      SPAR business in the Southern Africa region        19.0% and 15.8% to the total retail turnover
account sales comprising 51% of retail sales      increased by 8.7%, with like-for-like sales        of the group, respectively.
in 2020. Moreover, account and cash sales         increasing by 7.5%.
decreased by 8.4% and 9.9%, respectively.                                                            The group’s retail operations decreased by
                                                  The core SPAR wholesale business growth            29.7% for the 22 weeks ended 29 August 2020.
This financial performance was impacted by        was adversely impacted by the ban of               In contrast, the group’s e-commerce turnover
COVID-19 and its related trading restrictions,    cigarettes, resulting in the turnover of this      experienced growth of 29.7% for the 22 weeks
which contributed to a lower revenue being        category decreasing by 30.5% for this period,      when compared to the same period in the
generated from retail sales and a decrease                                                           previous year. This can largely be attributed to
                                                  and a significant decrease of 71.9% in the five
in account payments. Additionally, higher                                                            customers’ continuous preference for online
                                                  months to 28 August 2020, year-on-year. In
provisions for doubtful debts in Truworths                                                           shopping during the COVID-19 pandemic.
                                                  addition, internal measured price inflation
increased operating expenses, and intangible-
and other assets were also negatively impacted.   increased marginally to 4.6% during this time.
                                                                                                     In SA specifically, the trading environment has
                                                                                                     further been challenged by continued electricity
In terms of business segments, Truworths retail   Furthermore, liquor sales decreased
                                                                                                     load shedding between May and August,
sales decreased by 8.7% from R13.5 billion in     significantly by 16.4%, due to the regulatory
                                                                                                     resulting in approximately 15 000 trading hours
2019 to R12.3 billion in 2020. In SA, Truworths   sales ban in the Southern Africa region.           being lost. In Australia, trade was significantly
operations contributed 96.7% of the Truworths     Moreover, the building materials business lost     impacted by the re-introduction of lockdown
segment’s retail sales in 2020, compared to       five weeks of trade due to the lockdown in         measures in some states. In the UK, stores
96.6% in 2019. Additionally, retail space grew    the second half of the financial year, resulting   opened from mid-June, however, slow progress
by 0.5%, with Truworths opening 14 stores and     in a turnover decrease of 3.5% for the period.     was made due to social distancing rules and
closing 26 in 2020.                               Additionally, Build it sales also declined by      restrictions that were still largely in play.
                                                  3.5%, which is a reflection of trade being lost,
                                                  as a result of lockdown.

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MERGERS,
ACQUISITIONS &
PARTNERSHIPS
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MERGERS, ACQUISITIONS & PARTNERSHIPS

The Foschini Group                                      Pick n Pay Partners
Receives Approval to                                    with UCOOK
Acquire Jet Stores                                      Pick n Pay recently entered an exclusive retail
                                                        partnership with UCOOK and will now stock its
The Foschini Group (TFG) recently received              Craft Meals range of ready-made frozen meals. This
approval from the Competition Tribunal to acquire       partnership forms part of the retailer’s continuous
Jet Stores, subject to conditions. This approval        expansion of its growing frozen range.
comes after the Competition Commission
investigated competitor concerns that the merger        The Pick n Pay and UCOOK partnership, will
will give TFG a dominant position, however, was         allow customers to purchase their UCOOK meals
not convinced that this is the case.                    from a physical store for the first time, with eight
                                                        restaurant-quality frozen Craft Meals now being
The Tribunal conducted a virtual proceeding on          available at 15 selected stores in Cape Town.
the matter, after it heard submissions regarding        However, the partnership will be expanded to
concerns from the Commission, the South African         more stores nationwide, based on customer
Commercial Catering and Allied Workers Union            feedback.
(Saccawu), and the merger parties. The Tribunal
announced that the approval of the sale of Jet          The UCOOK frozen Craft Meals are available in
Stores was granted, subject to conditions.              three categories, including Odyssey, Artisan, and
                                                        Nourish, with each meal having been developed by
These conditions include that TFG may not               celebrated chefs and containing fresh, nutritious
retrench Jet employees for two years, and Edcon         ingredients. This offering is an expansion of Pick n
employees must be given preference for any              Pay’s growing frozen range, which has expanded
vacancies arising in the Jet business for three         to include healthy frozen snacking options and
years, after the merger implementation date.            ready-to-eat meals, which includes new plant-
                                                        based options.
Furthermore, in line with recommendations
from the Commission, other conditions include           According to Pick n Pay’s Retail Executive for
transferring stores to be fully integrated into TFG’s   Marketing, John Bradshaw, there was a significant
structures, and TFG maintaining a similar ratio of      rise in interest for frozen meals at the start of
local procurement by Jet stores, as in its previous     lockdown, with the interest in frozen meals
financial year. Additionally, TFG must increase local   continuing to grow due to it being deemed
procurement for these stores.                           convenient and wholesome.

With the acquisition, TFG’s market share in the         Bradshaw indicated that Pick n Pay is excited
apparel market will increase to 22%. However,           about what it can achieve when it partners with
TFG will benefit the most in terms of the lower         energetic start-ups, such as UCOOK. He further
LSM market, with its clothing market share set          stated that by adding Pick n Pay’s distribution
to grow by approximately 18%.                           to UCOOK’s innovation, the group can provide
                                                        something truly special to its customers.

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INNOVATION &
TECHNOLOGY
TRENDS
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INNOVATION AND TECHNOLOGY TRENDS

New Sportscene App                                 CyberEcomm Introduces                                  Game Debuts New Tech-
Launched                                           New E-Commerce                                         Based Retail Store
Sportscene recently launched its new
                                                   Shopping Solution                                      The Massmart-owned retailer, Game, recently
Sportscene app, with the aim of enhancing                                                                 debuted its all-new, tech-based concept store in
the overall shopping experience for its            The Durban-based digital solutions company,            the Mall of Africa, with plans to expand to other
                                                   CyberEcomm, recently introduced its new all-in-one     locations. This new design has been optimised
customers. The app will allow customers
                                                   shopping platform, ShopESpot. This platform allows     to get customers in and out effectively, whilst
to search for all inventory available at                                                                  reducing stress for shoppers and staff.
                                                   SA businesses to develop an online presence and
Sportscene stores, across the country, as well
                                                   tap into the booming digital and online economy.
as offer a range of other features.                                                                       The new store design boasts a range of new tech
                                                   With the COVID-19 pandemic fast-tracking               features to facilitate the overall customer shopping
The app was launched, in light of the global       companies’ digital transformation projects,            experience, including the new rotation design,
COVID-19 pandemic, which has encouraged            ShopESpot has been developed for local businesses      making the store easier to navigate than traditional
people to stay away from public spaces.            to easily adapt to the e-commerce space, ensuring      aisles.
Furthermore, this app serves as a way for the      that they are not left behind. The new ShopESpot
retailer to stay in touch with its customer        platform allows SMMEs and larger corporates to         Moreover, the new store features a range of vending
                                                   build an e-commerce website to market and sell         machines placed across the store, for products
base, ensuring that it does not lose customer
                                                   their products and services online.                    such as cell phone cables and battery boosters, as
engagement during these times.                                                                            well as high-volume items. This allows customers
                                                   This is achieved through a customised online           to easily insert funds and instantly walk out with
The new Sportscene app is available for            shopping platform, which offers clients a complete     their purchase, without having to deal with queues,
download on Google Play and the Apple              e-commerce solution. It includes an interactive        people, and cashiers.
App Store, allowing customers the ability to       mobile app, that provides the tools required to
search for available inventory at Sportscene       manage a business online, and control customer         Self-checkout areas have also been incorporated,
stores nationwide. In addition, the app            engagement via the web or social media.                although still in the testing phase, as well as click-
will provide a sneaker calendar to inform                                                                 and-collect areas for customers, to order online and
                                                   The platform allows businesses to showcase             pick up their order in a series of lockers in the store.
shoppers when the latest footwear becomes
available, as well as offer users the ability to   up to 1 000 items, embeds a collection facility,
                                                   and allocates sold items for delivery and pickup.      Furthermore, the new store also boasts a range
tune into the Sportscene Radio.
                                                   Moreover, using the online payment solution,           of screens, with a large touchscreen upfront for
                                                   businesses can receive payments through a              navigation, as well as smaller ones showing digital
According to Sportscene E-Commerce                 payment gateway, allowing customers to make            versions of Game’s promotions. Each shelf includes
Manager, Ally Williams, the company is             card-not-present payments immediately.                 a screen, which is wirelessly connected to Game’s
excited to launch the new app. Williams                                                                   backend software. This facilitates easy price
further expressed that the app offers              Furthermore, the platform is interfaced with a         changes and QR codes, for consumers to access
                                                                                                          specs and order online.
customers the ease of shopping for the latest      customer relationship management dashboard,
sneakers and clothing, as well as offering a       which can create client databases, print or allocate
                                                   vouchers, track transactions from the order through    This Mall of Africa Game store design is set to
range of other exciting features and lots of
                                                   to completion, and communicate with clients via        expand to other provinces in SA, with plans to
extra benefits.                                                                                           launch the design in two more locations, before the
                                                   SMS or email.
                                                                                                          end of the year.

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SOCIO-POLITICAL
FACTORS
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Clicks Actively Focusing                             Pick n Pay School Club                                 Converse Supports
on Transformation                                    Resumes Delivery of Bars                               Youth Mentorship
Following the resignation of Click’s Non-
                                                     of Soap to Schools in                                  and Empowerment
Executive Director, Nonkululeko Gobodo due to        Need
the recent racist TRESemmé advert, which was                                                                Converse has pledged a $1 million investment in
published by the retailer, Clicks has decided                                                               a new accelerator programme, which has been
to focus on its transformation. The group will       In an attempt to curb the spread of COVID-19,          dubbed Converse “All Star Captains”, that will run
be working actively with an inter-ministerial        Pick n Pay (PnP) School Club, in collaboration with    over two years. With this investment, Converse is
team, which will implement and monitor its           Willowton Group, resumed the delivery of donated       showing its commitment to putting communities
transformation initiatives.                          soap bars to schools in need in the Western Cape,      at the heart of its marketing, with the company
                                                     Gauteng, and KwaZulu-Natal provinces. This comes       targeting the youth, to help drive the progress it
                                                     as lockdown regulations have been eased, with the      wants to see in the world.
In September 2020, Click’s TRESemmé advert           president urging South Africans not to become
was publicly condemned by Gobodo, resulting          complacent.
in Clicks having to determine how the ad                                                                    The “All Stars” programme is a community-
                                                                                                            focused ecosystem of mentorship, commission
came to be published. As a result, Clicks has        With more children returning to school, hygiene        and funding, with the global network of Converse
committed to increase spending on small,             and education have become more important. PnP          being utilised to facilitate capacity building, which
micro, and medium enterprises, as well as show       School Club and Willowton Group have resumed           assists young creatives in gaining professional
its support to local beauty, hair care brands,       their initiative, with Willowton Group providing       experience and opportunity.
and other products. Clicks will be working           the soap and PnP distributing it to its network of
actively with an inter-ministerial team, which       more than 3 000 schools in SA. The programme
                                                                                                            Converse is expanding its All Stars programme,
includes the Department of Trade, Industry,          distributed 370 074 soaps and reached classrooms
                                                                                                            where it will invite up to 250 creative individuals
and Competition, to implement and monitor its        across SA before the lockdown in March. Deliveries
                                                                                                            from the public for the first time, to join “Converse
transformation initiatives.                          resumed in August and the remaining soap bars
                                                                                                            All Stars”. New members will get the opportunity
                                                     expected to reach learners by end of October 2020.
                                                                                                            to engage with the “All Stars Series”, an ongoing
                                                     Additionally, some PnP stores have also handed out
According to Deputy Minister, Nomalungelo                                                                   experience that includes one-of-a-kind workshops,
                                                     soap bars to pensioners.
Gina, the department is interested in seeing                                                                conversations, and performances that are
localisation and transformation, with the                                                                   facilitated by the extended creative family of
department already developing a cosmetics            Furthermore, the partners have also started working    Converse.
                                                     with independent owners of 20 PnP Market stores
sector strategy plan, that can help retailers like
                                                     in the greater Johannesburg area, who have assisted
Clicks advance.                                                                                             Converse’s $1 million accelerator programme
                                                     with the identification of lower-income school areas
                                                                                                            aims to fast-track the progress of individual “All
                                                     where contributions have been made towards
                                                                                                            Stars”, who want to define a new possible through
Despite the department acknowledging the             feeding schemes.
                                                                                                            creative action in youth development, inclusivity
corrective action that Clicks has taken, it wants
                                                                                                            and diversity, as well as sustainability. In October
to ensure something good comes out of this           By the end of the project in October, more than        2020, “All Stars” will submit individual proposals to
situation, with this opportunity being used          750 000 soap bars will have been distributed to        Converse regarding ideas they believe will change
to facilitate the entry of black players into the    young learners across SA, totalling approximately      the game. Thereafter, in early 2021, the first annual
beauty and hair product market.                      R5 million. The project’s focus is to reach schools    class of Captains will receive funding for a year,
                                                     and frail care centres in KwaZulu-Natal, select        to help realise their ideas along with mentorship
                                                     schools in Gauteng, and schools in the Western Cape.   opportunities from Converse.

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Launch of SA Food Loss
and Waste Voluntary
Agreement
The Consumer Goods Council of SA (CGCSA)
launched the SA Food Loss and Waste Voluntary
Agreement. This agreement is set to ensure that
food manufacturers and retailers are committed to
reducing food waste, to achieve the United Nation’s
(UN) Sustainable Development Goal, to halve global
food waste by 2030.

This agreement was launched to coincide with
the International Day of Awareness of Food Loss
and Waste (IDAFLW), which was on 29 September
2020. The agreement was developed by CGCSA, in
partnership with the Department of Trade, Industry,
and Competition (DTIC), and the Department of
Environment, Forestry, and Fisheries (DEFF). The
agreement was co-funded by the European Union,
through the SA-EU Dialogue Facility, and has already
received pledges from retailers such as Massmart,
Pick n Pay, Woolworths and Shoprite.

This food waste initiative is the culmination of efforts
made since 2015, when the DTIC approached the
CGCSA to lobby its members, to sign a voluntary
agreement on food waste. This voluntary agreement
is to be in line with the UN goal to halve global food
waste by 2030, as well as the commitment by the
Consumer Goods Forum (CGF) to reduce global food
waste by half, by 2025.

This newly launched agreement, commits CGCSA
food manufacturing and retail members to
implement a range of measures, to minimise and
reduce food waste in the country. This serves as
one of the efforts by SA, to transition to sustainable
consumption and production, in order to achieve
healthy sustainable food systems.

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