Stocktake: Partnerships seem to be the answer to thriving in 2020

We all know that crises spur innovation and with the rapid acceleration of digital solutions to supply chain and delivery challenges under pandemic lockdown, South Africa is no different, with agile retailers, tech firms and mobile apps collaborating, partnering and bringing new creative solutions to market.

Yebo Fresh secures funding to go national

Online retailer Yebo Fresh, a Cape Town-based company that delivers food and household goods to communities and organisations in the area, has shown exceptional growth during the last few months, rising to the occasion of increased demand from private households, businesses and charitable organisations for the delivery of food and groceries. Since the beginning of March, the retailer has moved to a bigger warehouse, expanded their team, and is now proud to announce further investment into the company. Yebo Fresh originated in 2018 and was inspired by the need for transformation in the world of online shopping, as well as making quality, fresh food and household goods accessible to all. Since their humble beginnings in the garage of founder Jessica Boonstra’s home, the company now occupies a 1,200 sqm warehouse where over 35 full-time employees work to produce food and grocery orders for predominantly township residents all over Cape Town.

Yebo Fresh is now gearing up for even more expansion with Series A funding. E4E, Mark Forrester, Dale Williams, and the founders of cars.co.za are the funders for this round. E4E managing partner Philani Sangweni says: “Yebo Fresh aligns perfectly with our stated mission of growing startups that aren’t just good businesses but are also transformative and create jobs. We’re extremely proud to be playing a leading part in their growth journey.” As one of the first investors to back Yebo Fresh, entrepreneur Mark Forrester was inspired by the determination shown by the team when faced with the pandemic: “I backed Yebo Fresh in their first round of investment, before the pandemic hit. To see the team mobilise during lockdown to help feed vulnerable families – levelling up their systems and logistical infrastructure and showcasing an anti-fragile determination – was truly inspiring.” Yebo Fresh’s success in townships is driven by their hyper-local approach and offers, great partnerships and the combination of smart tech and processes in the background with a simple low-data customer interface. According to Jessica Boonstra, founder and CEO of Yebo Fresh, the funding will be used to further build their brand; hire new talent to optimise their systems and processes and to prepare for national expansion.

Retail Capital partners and Mr D offer restaurants a lifeline

Retail Capital and Mr D Food are working together to deliver a simple and fast funding solution to restaurant owners. The two South African brands have announced the launch of easy to access restaurant funding to help drive growth in the South African restaurant industry. The pre-approved, turnover based funding is now available to Mr D Food restaurant partners – over 6,900 restaurants nationwide – and can be used for whatever the restaurant needs to run and possibly scale their business, including marketing, buying stock or renovations. Qualifying Mr D Food restaurant partners will receive details of pre-approved funding offers and can complete Retail Capital’s simple online acceptance process to access the funds within 24 hours.

While the partnership has been in the works since before the Coronavirus pandemic hit, the simple and quick access to funding has come at a time where the industry needs it the most. Recent stats from Retail Capital show that the industry is operating at 85% of their turnover, compared to the same time last year. Due to reduced demand, many eateries have been forced to trim their menus to reduce stock holding; and are running with a skeleton staff and shorter shifts. The funding will allow restaurants to recover from this challenging period and look for ways to drive growth in their operations. “Since the start of the lockdown on 26 March, Retail Capital has provided over R600m in funding support to over 7000 small businesses,” said Retail Capital CEO Karl Westvig. “Beyond that, we suspended debit orders for our clients during lockdown, so they could use that money to keep their businesses afloat and pay their staff. Millions of South Africans from all walks of life depend on the survival of SMEs.”

Mr D Food has also supported restaurants by raising over R3.6million in contributions to restaurants through the novel COVID-19 Contribution feature inside the Mr D Food app; implementing a commission relief scheme from May until September which reduced the delivery commission rates for the vast majority of restaurant partners; and launching the new Mr D Food “Restaurant Essentials” supplies portal on takealot.com. Since 2011, Retail Capital has provided over 28,000 small businesses with over R3bn in funding. The funding has been structured with the restaurant business in mind. In line with the fluctuating nature of restaurant operations, the funding repayment options offer flexibility. Repayment is linked to the performance of the business. Since payments are directly tied to business turnover, restaurants don’t need to worry about making payments or missing payment deadlines when having a slow month.

New Builders concept store launches inside Cresta

A brand new Builders store is opening its doors at Cresta Shopping Centre on November 26, 2020, representing a significant shift from standalone format stores; and is a part of the brand’s effort to respond to the needs of those that prefer one destination for all their shopping needs. Now shoppers visiting the mall to purchase groceries, fashion, cosmetics and electronic goods, can also shop the broad DIY offering ranging from seasonal appliances, flooring, electrical, plumbing, plants and related hardware services. It was also designed with Covid-19 safety in mind. The first branch to open within a mall complex, Builders Cresta will continue to offer the same range and services the brand is trusted for including a garden and nursery section and a paint tinting and mixing counter. Boasting an extensive décor department, other departments include power tools, flat pack furniture and building materials. Shoppers can also expect services such as delivery, installation and assembly as well as free pool water analysis and more.

Technology features prominently throughout the 2 267sqm store and is enabled by free WIFI, high-definition screens, and tablets conveniently located across the store giving customers the opportunity to shop and place orders, as well as view promotions and search for product information or inspirational DIY content. As with all the brand’s new stores, Builders Cresta will balance this technology with personable, helpful service to educate, entertain, and inspire customers.

This week in numbers:

R63,7 billion

JSE-listed Pepkor Group, which includes brands such as Pep Stores, Ackermans and Incredible Connection,  achieved a 3,6% growth in revenue to R63,7 billion, for the financial year ending 30 September 2020. The group terms this an “exceptional result”, considering the fact that the group lost approximately R5 billion in sales during the hard lockdown period when its retail stores were closed. Pepkor says it was able to navigate the challenges that COVID-19 presented and exceeded expectations by remaining focused on their discount and value business models – providing affordable products to their large customer base.  The group achieved huge  market share gains since April with growth of 240 basis points in clothing, footwear and homeware (RLC) and 370 basis points growth in cellular (Gfk). Pepkor CEO, Leon Lourens, explains, “We are very happy with our exceptional sales performance since our stores re-opened after the hard lockdown, and the resultant market share gains. Our discount and value business model provided much needed affordability to our customers during these tough economic times. Our expansive store footprint helped our customers to shop for their basic and essential products closer to their homes. We are also happy to have kept our expense growth under control and we continue to trade at the lowest cost of doing business in the market”.

QUOTE of the week:

“Black Friday has, for all intents and purposes, become ‘Black November’ with a shift to online sales. This has two major implications. The first is the rapid normalisation of the online shopping experience; and the second is a need for retailers to reassess the role of the physical store. In essence we are talking about a shift to omnichannel retail. This requires a focus on both the online and offline customer experience, and the need to offer a seamless journey to the customer between store and device. This has implications for data infrastructure, logistics and employees. It was quite impressive to see how South Africans adapted to shopping online, particularly for food. The whole discussion about essential and non-essential has become moot, since everything is “essential” when the shopping experience is online,” said Nompumelelo Mokou, Executive: Intelligent Customer Experience, Dimension Data in RetailingAfrica.com.

*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: news@retailingafrica.com.

Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. 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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