Stocktake: Business confidence collapses

Business confidence sinks to new lows; while Plascon paints the town red with its rebrand; and NetFlorist pivots once again to include general alcohol sales.

Business confidence sinks to new lows in the shadow of Covid; while Plascon paints the town red with its rebrand which promises a new palette of products; and NetFlorist pivots once again to include general alcohol sales.

Business bottom line under Covid

Business confidence is at a record low under current Covid conditions. The RMB/BER Business Confidence Index (BCI) fell from 18 to merely five points in the second quarter. This is the lowest level ever recorded since the BER first began conducting its business confidence survey in 1975. Strikingly, a reading of five indicates that just about every respondent in the second quarter was unsatisfied with prevailing business conditions. The second quarter survey was conducted online between 13 May and 1 June. It covered about 1800 executives spread across building, manufacturing and the domestic trade sectors, i.e., retail, wholesale and the motor trade. Over time, business confidence in these sectors has proved to be a reliable, early indicator of GDP growth and private fixed investment.

Until now, the lowest BCI on record was the 12 index points registered during the third quarter of 1985 and the fourth quarter of 1977. In both cases, confidence falling this low was the result of uniquely adverse political developments in South Africa. By contrast, confidence in the second quarter of 2020 collapsed primarily due to the unexpected emergence and spread of COVID-19 and the five-week shutdown of almost all non-essential economic activity as a first step to deal with the public health emergency. Almost overnight a significant portion of businesses had no income but continued to be liable for expenses (such as rent, wages, interest on loans and unpaid earlier supplier deliveries). Those that could operate, faced supply chain disruptions and added costs to keep staff and clients safe. During the second quarter, business confidence declined in all five sectors making up the overall RMB/BER BCI:

  • Retail confidence dropped from 18 to 11. Of all the sectors, retail trade is the only sector where confidence did not fall below 10. Confidence held up relative to the other sectors as sales of essential goods, such as food and pharmaceuticals, and later winter clothing, were allowed under risk level 5. Towards the end of May, hardware sales to tradesmen were also permitted. In contrast, sales of durables, such as furniture, appliances and electronics, came to a standstill.
  • Food production was permitted throughout the second quarter. Although this is a large sector within manufacturing, food producers’ better performance (also relative to the first quarter) could not compensate for the weakness in other important sectors. Sectors such as metals, machinery and transport equipment were not permitted to operate fully under risk level 4. As a result, manufacturing confidence dropped from 17 to six, so surpassing the previous record low of 14 seen both in 1998, and before that 1985.
  • Wholesale confidence fell from 25 to four index points – a level that is also significantly lower than the previous record low of 12 registered in 1999. Given the inter-linking role that the wholesale sector plays between the various sectors within the economy (i.e., among agriculture, mining, manufacturing and domestic trade); as well as between South Africa and the rest of the world, it is unsurprising that the near standstill in activity in all these sectors severely disrupted the wholesale trade sector too.

A BCI plunge to five in the second quarter would be consistent with a contraction in real GDP like never seen before. “COVID-19 has drastically changed the already-weak economic landscape and perhaps, in some cases, permanently. We are likely only beginning to fully appreciate the complexity of the economic impacts of this pandemic,” said Ettienne le Roux, chief economist of RMB.

Although the gradual lifting of restrictions and subsequent resumption of economic activity might well lift confidence in the period ahead, the uncertainty with respect to how the coronavirus infection-curve develops is an important reason for caution. Most semi-durable (i.e., clothing) and durable goods (furniture and electronics) retailers are doubtful that sales volumes will benefit from pent-up demand being unleashed any time soon. Instead, additional government support to low-income households and a prospective fall in consumer confidence point to households rather restricting their spending to mainly necessities, such as food and pharmaceuticals.

Plascon redecorates

This year marks Plascon’s biggest brand renewal yet, with rejuvenated products, new initiatives and a bold new look. “In addition to the brand’s refreshed aesthetic and corporate identity, a new range of innovative and eco-friendly products that offer new technologies with advantages for personal wellness and the planet, will be available through renewed operations, logistics and distribution,” said Alan Cotton, director of sales and marketing at Plascon.

­The concept behind the new logo is a vision of the future. The new logo replaces the former ellipse shape and takes the typography of the brand name into a more accessible lower case. Plascon’s iconic oval lives on in the open space created by the new vision field and allows the logo to adapt easily to various online and offline communication platforms. The logo lives predominantly in a field of red that is intuitive and responsive and can be used as a tag on various executions. The colour landscape has also been updated from the previous light red to a rich bold red. The brand’s new photographic style includes images that speak to its brand story with the paint as the hero. The style is clean, African, modern and approachable.

One of the innovations that it will bring to market in 2020 is Plascon TradePro Roof & More, which contains no APEOs – these harmful chemical compounds pollute the water cycle and destroy marine life. This is in addition to a range of other new products in the latter half of the year, to be launched under the brand’s refreshed corporate identity.

From flowers to groceries to grog

When it couldn’t sell flowers under hard lockdown, NetFlorist added grocery boxes to its offering. With alcohol sales allowed under lockdown level 3, the brand has launched over 3,400 new alcohol and beverage items, ranging from San Pellegrino Aranciata at R19.95 to an extravagant Hennessy VS at R6,559.95. This extensive new range is unlike the existing Fine Alcohol gifting range, in that it allows customers to purchase their favourite drinks for personal consumption.

The liquor industry in South Africa is responsible for an estimated R94,2 billion of South Africa’s gross domestic product. This is a whopping 4.4% contribution to South Africa’s GDP. As for NetFlorist, it estimates that the new alcohol and beverage range will contribute 5% towards its ‘own consumption’ target market. “In these unprecedented times, NetFlorist had the choice to either adapt its existing gifting offering or fall behind. With the 36-hour launch of the essentials range in April, we’ve continued this now with our new alcohol offering. I have been overwhelmed by the speed at which our team has managed to pivot since COVID-19 – this has been very inspiring for me to watch and be part of,” noted Ryan Bacher, managing director of NetFlorist. Since the launch of the fresh produce essentials range, NetFlorist has continued to extend its offering by introducing groceries, Chateau Gateaux cakes, and alcohol and beverages.

This week in numbers:


WhatsApp has over one million new sign-ups per day. The average user checks or uses the social messaging app more than 23 times per day. WhatsApp for business will drive marketing and retail forward, which is why it remains the most progressive tool for retail today, said Ryan Egnos, co-founder and executive director of Apex Visibility, a mobile-centric solutions company that aims to partner with clients and organisations across retail, FMCG, finance, training and social impact initiatives. He was writing in Retailing Africa’s new NEXT ‘How to’ series on how to effectively use WhatsApp for business.

QUOTE of the week:

Brands will also need to get out of their comfort zone, to accommodate the vulnerable. They can reach out by volunteering their services, products and solutions at discounted prices, if not for free. I believe that assisting and supporting their consumers now means you will have loyal consumers forever.”


Khethi Ngwenya, CEO of SchoolMedia and co-founder of GEZA.


*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to:


Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.

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