Stocktake: Tight budgets and slow recovery

While business in some sectors has started off strong this year as the end of the pandemic is hopefully in sight, consumers will still endure significant pain at the tills this year as plague and war persist in regions of the world.

TradeDepot buys Ghana’s Green Lion

TradeDepot, the B2B eCommerce and embedded finance platform in Africa, has announced the acquisition of Green Lion, the biggest and fastest growing B2B eCommerce platform in Ghana, to accelerate the delivery of its services across the country. Founded in 2018, Green Lion has provided access to essential goods and services, enabling digital commerce for neighbourhood retailers in Ghana. Building on this work, TradeDepot will leverage its data, technology and logistics operations to connect more neighbourhood retailers in more Ghanaian cities to suppliers; and make financing more accessible and affordable. Ghana’s retail sector is valued at $24.4 billion and is expected to reach $33.16 billion by 2024, with SME retailers accounting for about 90% of the market. TradeDepot already has active operations in Ghana, as well as its operations in Nigeria and South Africa, building a network of leading consumer goods brands and SME retailers across Africa, and created a proprietary risk scoring engine that uses retailers’ purchase history, previous repayment performance and other related data points to predict their creditworthiness. Via its ShopTopUp platform, the company offers a broad range of consumer goods to SME retailers within its network and provides credit lines to enable these retailers to access inventory and pay in instalments as they sell on to their own customers.

The cost of this year’s Budget speech

It was inevitable after the plague, and now war, that the price of everything would continue going up, including energy, imports, raw goods, and staple items. Hyperinflation has made its way across the ocean to our shores, and the economy is struggling to kickstart, but it is on a slow upward trend, says Sebastien Alexanderson, CEO of National Debt Advisors. This is his take on the key points of the National Budget speech:

• Personal income tax brackets and rebates will be adjusted downwards by 4.5% in an effort to neutralise the impact of inflation, pushing taxpayers into higher brackets. As a result of these adjustments, the level where income tax now becomes payable, increases to R91,259 per annum (R7,679pm).
• Sin tax will increase once more, delivering an estimated R400m more from alcohol and R100m via tobacco duties.
• The levy on plastic bags is raised from 25c to 28c; and the incandescent light bulb levy will rise from R10 to R15 for each globe from 1 April 2022.
• On a positive note, there will be no increase in either the general fuel levy or the Road Accident Fund levy.
• Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%. The increases mean that a 340ml can of beer or cider will cost 11c more; a 750ml bottle of wine will be 17c more expensive; a bottle of sparkling wine will cost an additional 76c; and a bottle of spirits will be R4.83 more expensive; a packet of cigarettes will cost an additional R1.03; 25 grams of piped tobacco will cost an extra 37c; and a 23 gram cigar will be R6.77 more expensive.
• Government also proposes to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023.
• A new tax will also be introduced on beer powders.
• After three years of no changes, the health promotion levy will be increased to 2.31 cents per gram of sugar.

Furthering retail education in SA and Namibia

The Wholesale and Retail Sector Education and Training Authority (W&RSETA) and the Namibia Training Authority (NTA) met in Johannesburg recently to renew a five-year Memorandum of Understanding (MoU) aimed at enabling both parties to enhance their skills planning through collaborative research, shared experiences and skills development activities of mutual interest. W&RSETA has been facilitating education and skills development in South Africa’s third largest contributor to gross domestic product (GDP) – the Wholesale and Retail Sector – for more than 20 years and has implemented several programmes. Namibia’s NTA was established in 2008 with a view to regulating and facilitating the sustainable delivery of quality Vocational Education and Training (VET) to the benefit of stakeholders. W&RSETA CEO, Tom Mkhwanazi, says the partnership between the two countries was born out of a cross-border quality assurance issue that arose in 2019. “Retailer trainers, who were traveling to Namibia to conduct training, encountered challenges due to the lack of a Southern African Development Community (SADC) agreement between the countries around quality assurance and certification.” Some of the key areas of the partnership include collaborative research; education and training projects; sharing expertise, specifically technical expertise; collaboration around curricular design and materials assessment and other quality assurance practices; exploring opportunities in the digital space in terms of e-learning; sharing IP and other capital resources; and sharing experiences. Another potential area for collaboration exists around the sharing of employer space. This relates to integrated learning in the workplace, with the idea of forming a worker exchange programme.

Masterchef SA makes a reservation at V&A’s Makers Landing

During November 2021, Makers Landing set aside part of its triple volume events space to become a film set for MasterChef, and all of the action in the show’s 20 episodes takes place against the backdrop of Cape Town’s commercial harbour and the Cape Town Cruise Terminal. During the show’s five-week run, fans can now interact with judges and contestants every weekend at Makers Landing. At 11am on Saturdays, from 5 March until 26 March 2022, visitors to Makers Landing can meet the judges in person as they watch them whip up their favourite culinary masterpiece in public food demos. The following day, visitors can meet those contestants who were eliminated from the previous week’s episode. They can hear more about each contestant’s personal food journey and can get insider hints and tips that they have gleaned from being in the MasterChef kitchen. Alex Kabalin, the V&A Waterfront’s executive for retail says, “Makers Landing was the ideal location for the world’s premier food show. We have plentiful space, we have breathtakingly beautiful vistas and, most importantly, Makers Landing epitomises the show’s food philosophy. Internationally, the MasterChef format is based on transforming home chefs with a food dream into master chefs, which is precisely what Makers Landing aims to achieve.” The concept for the R63-million investment in Makers Landing was always to incubate and grow sustainable food businesses.

TRADE SHOWS – live and in person!

A host of retail trade shows and conferences have announced that they will be going ahead this year, after an absence of two years, during the global Covid pandemic. Trade shows and live events in our industry are key networking opportunities and an opportunity for the industry to get to know each other. I for one, miss the connections and networking terribly and look forward to a time when we can all gather again without restrictions. These are the shows that will be happening this year:

• Propak Africa takes place 8-11 March 2022 at the Nasrec Expo Centre, Johannesburg. It is co-located with the Gapp Print Expo, Foodpro Expo, Pro-Plas Expo and Pro-Label Expo. The latest state-of-the-art equipment, machinery and auxiliary products and services will be on display over the four days. Book here for free tickets.
• The 2022 SAPICS Conference takes place at Century City Conference Centre, Cape Town, from 12 to 15 June 2022. SAPICS is The Professional Body for Supply Chain Management. Says says MJ Schoemaker, president of SAPICS: “It is the supply chain management profession that helped to keep essential goods flowing and essential services operational while the world worked together to fight the pandemic. COVID-19 put supply chains and supply chain management into the spotlight like never before, and the 2022 SAPICS Conference will give the supply chain community a vital chance to meet up face-to-face again, to mingle, learn, share knowledge, commemorate and celebrate. The world is never going to be the same, but the lessons that were learnt, the new knowledge gained, and the new tools and technologies that were leveraged must be shared, to ensure that we are ready and better positioned to fight the next threat. This may already be upon us as the Russia Ukraine conflict will undoubtedly impact global supply chains.” Book here.
• The Nedbank IMC 2022 conference later this year, in association with the Marketing Association of South Africa, is online again this year, but they are bringing in some heavy hitters as speakers. The latest to be confirmed is Mathe Okaba, chair of the Association for Communication and Advertising (ACA). She will speak on what the positive learnings are to come out of the global pandemic in her topic, The Relevance Effect. “The way our world has changed has in many instances served to ignite a fire in the hearts of entrepreneurs. With millions of brands all vying to acquire and retain new customers, being relevant is a no-brainer. How do brands stay front and centre, remaining connected and appropriate to their tribe in this changed world?” Retailing Africa is a media partner. Book now at http://www.imcconference.com.

INTERNATIONAL NEWS

While many countries are beginning to lift COVID-19 restrictions, two of Hong Kong’s largest consumer retail chains have started rationing some food and drug items to curb the panic buying in the city over the past week, amid fears of a citywide lockdown as COVID-19 cases soar. Supermarket chain ParknShop has announced limits of five items per customer on staples such as rice, canned food and toilet paper; while pharmacy Watsons put the same limits on medication for pain, fever and colds.

UK consumers are being warned to brace themselves for a rise in the price of bread, beer, pasta, biscuits and even pet food, as war in Ukraine sends the wholesale price of wheat soaring. Wholesale prices of everything from oil to metals have spiked since Russia invaded Ukraine, disrupting commodity exports from the region. The price of wheat has risen almost 75% so far this year to reach the highest point since 2008.

As quick grocery delivery under the 10-15 minutes time period has become the new growth arena globally, India’s quick commerce market is all set to witness 15 times growth by 2025, reaching a market size of nearly $5.5 billion. The total addressable market for quick commerce in India stands at $45 billion, and urban areas are driving this market on the back of mid-high-income households, according to RedSeer, a Bengaluru-based market research firm.

*Additional sources: Total Retail Report, Kantar, Standard, Indian Retailer, Onclusive.

MEME OF THE WEEK

South Africans will always find humour in the most ghastly of situations, like the fear of World War 3 breaking out.

This week in numbers

20%

While there is still a significant disconnect in South Africa between digital-savvy shoppers and those who make purchases in-store, the pandemic and lockdown conditions have narrowed the gap. That does not mean retailers can rest on their laurels when it comes to customer experience. Research shows that given the variety of apps available to them, South African shoppers will ditch a brand after just one or two poor experiences. “Most brands and stores are researching and understanding who their customers are and how they can use that information to provide them with more tailored products and personalised service – 20% of South Africans have indicated that they would be more willing to share personal data if they will be directly rewarded for doing so, for instance reward points, discounts, free shipping, and so on. Furthermore, almost the same percentage of people will share more information if it makes the customer experience faster and they get access to shipping updates on their orders. Balancing future-forward innovation with improving existing processes for local retailers will therefore be a key consideration in the months and years to come,” says Kelly Lu, lead on advanced analytics and artificial intelligence of ‎SAS in South Africa.

QUOTE of the week:

“With an impetus on finding mini moments or non-traditional micro-moments that brands can play a role in, small format and single-serve products allow a seamless tap into this world,” said Sanet Yelland, CEO and founder of Streamline Advertising, on Retailing Africa.

Main image credit: TradeDepot.

*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.

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