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NZINGA QUNTA: Thanks a lot for being with us tonight. NielsenIQ has launched its month-to-month State of the Retail Nation report, which reveals complete annual gross sales of R519 billion at South African stores, and provides us such attention-grabbing insights into how we’re spending cash in South Africa.
Jon-Jon Emary, who’s the retail intelligence technique lead at NielsenIQ, joins me now. An excellent night to you. Thanks a lot in your time tonight. Simply clarify how the State of the Retail Nation report gathers its knowledge, and what stores it will get that knowledge from.
JON-JON EMARY: Good night. Thanks for having me on the present tonight. At NielsenIQ we monitor retail gross sales throughout each the casual and the formal sectors. We do that by way of our market-track resolution. We monitor over 10 000 branded stores, so your supermarkets, grocery shops, storage forecourts – and we monitor greater than 143 000 unbiased shops. These are the likes of the spaza unbiased grocery shops, and even taverns throughout South Africa. What we cowl measures roughly 80% of all grocery retail transactions, so we don’t take a look at clothes and people kind of classes. We’re actually wanting on the stuff that we devour in houses or our fast-moving shopper items.
NZINGA QUNTA: What did you discover when it comes to gross sales for the 4 weeks ending Might 1?
JON-JON EMARY: Within the newest months, that will be April gross sales, we noticed R42 billion of gross sales all through South Africa. That’s up 10% on the like-for-like yr 4 years in the past. We’re seeing fairly wholesome progress within the retail sector and, if we’re CPI at 6%, and meals inflation at 6.8%, we’re seeing that retail gross sales are going forward, which actually speaks to the truth that shoppers are re-evaluating the place they spend their cash.
We’re not going out as a lot. We’re not consuming out as a lot. We’re spending more cash on for-consumption within the house, and that’s actually introduced some buoyancy again into the retail sector.
There’s clearly inflation at play as nicely. However we’re seeing some wholesome restoration inside the retail area; liquor and tobacco gross sales are stabilising now and now not affected as a lot by all of the bans and issues we needed to take care of final yr.
NZINGA QUNTA: We’ll come to the liquor fairly shortly, as a result of I discovered the statistics on that very attention-grabbing. However there was a pointy enhance within the sale of bread this yr in comparison with final yr. Do we all know why?
JON-JON EMARY: I feel one of many attention-grabbing issues we’ve seen is round bread, sure.
We’ve seen a big enhance in bread gross sales, however what’s actually attention-grabbing is that after we take a look at in-home consumption of bread, it has really lowered barely, which is sort of an attention-grabbing factor contemplating what I’ve simply stated about us transferring again to spending in-home.
However with folks working, going to the workplace once more, or being on constructing websites and all kinds of different issues, we’ve positively seen an uptick in absolute bread gross sales, and a number of that appears prefer it’s being consumed out of house, so for folks at lunchtime and all these kind of meal events. It’s an reasonably priced meal different, so we’re seeing fairly good, wholesome progress inside the bread surroundings.
NZINGA QUNTA: One thing else that had sharp will increase was liquor gross sales, though that’s starting to taper out.
JON-JON EMARY: Sure. We’ve obtained to place context onto the liquor gross sales progress. As I discussed, there have been bans. So if we’re longer intervals, we’ve got to know that there are bans and results at play there. However we’re seeing that now that’s stabilising; it’s transferring right into a interval of normalcy, if we are able to use that phrase.
I don’t know if we all know what ‘regular’ is in our lives any extra, however we’re seeing it stabilise.
And we’re seeing that with absolutely the basket, the place there’s a ten% progress yr on yr. Liquor gross sales are clearly nonetheless rising forward of the basket.
We all know beer continues to be the primary liquor class, and actually the primary class in South Africa.
What I feel is admittedly attention-grabbing in liquor is that submit the bans we shifted what we had been shopping for. We had been referring to longer-lasting bottles. It was simpler to top off on spirits and wine in the course of the uncertainty intervals, as a result of shopping for plenty of beer takes up a number of area. That appears to be a pattern that’s continued submit the Covid ban intervals.
We’ve really seen gins that move vodka when it comes to class significance, which is admittedly attention-grabbing to assume.
I used to be it earlier and gin gross sales inside townships have virtually doubled since 2019.
Having stated that, complete liquor just isn’t fairly again to 2019 or pre-pandemic ranges, but it surely’s attention-grabbing to see that inside sure classes our palate has modified and we actually are completely different classes which can be our desire now versus what they had been pre-Covid.
NZINGA QUNTA: That’s very attention-grabbing, Jon-Jon, that you simply’re saying gin gross sales have now surpassed vodka, and also you additionally imagine that it’s partly because of Covid-19.
JON-JON EMARY: Effectively, I received’t say it’s a results of the virus, but it surely’s a results of …
NZINGA QUNTA: The lockdowns and what’s round these, sure.
JON-JON EMARY: 100% – the impact on our life-style that the pandemic delivered to gentle.
I feel all of us needed to make strategic and tactical choices when there have been imminent bans or rumours of bans.
We noticed plenty of spikes and dips in gross sales, and as we thought there was going to be a ban, everybody rushed out and purchased no matter they might. Having that change in what was in our houses and what we had been consuming clearly has a long-lasting impact.
We see that throughout a number of classes, however after we begin trialling issues, trial is the beginning of that change in our consumption, and the pandemic actually did pressure us to trial various things in our lives.
NZINGA QUNTA: There’s knowledge in that report that displays how costs are taking pictures up. The one which shocked me rather a lot was that cooking oil skilled 36% inflation during the last month alone, with worth gross sales of cooking oil up 43% within the final month. What different kinds of merchandise are seeing this sort of enhance?
JON-JON EMARY: When it comes to inflation, cooking oil is true up there, the best inflation throughout all of the classes. We monitor all the massive classes. Those that comply with on that are fairly scary are frozen-chicken inflation at 16%. laundry detergent at 11%. So we’re seeing excessive double-digit inflation in actually necessary classes inside the baskets, and that actually does affect the buyer.
We do know that retailers and producers are investing as a lot as they probably can to scale back this. If we take a look at the hole between CPI [consumer price inflation] and PPI [producer price inflation], it’s sitting at 7% now.
That actually signifies how a lot the producers, in addition to retailers, are investing in holding the costs low, or as little as doable.
We’re wanting on the knowledge, and 35% of gross sales of the highest 50 classes in South Africa are offered on promotion. So we all know that there’s a number of funding going into selling and lowering costs as a lot as doable for shoppers.
NZINGA QUNTA: What sort of shopper modifications are you seeing because of Covid-19 and the lockdowns? I’m asking this as a result of we spoke a bit earlier about alcohol, however when it comes to different items what are we seeing?
JON-JON EMARY: I feel the most important factor we’ve actually seen is that we’re buying in [fewer] retailers. We’re consciously not going to the outlets as usually, both. However because of that we all know that the typical basket has elevated. It doesn’t sound just like the final, but it surely’s gone up R131, that meals journey. That’s an 11% enhance within the basket price.
What’s of concern there, although, is that the amount of that basket has not elevated on the identical charge.
Once more, that speaks to the truth that individuals are getting far much less for his or her cash and so they’re having to spend so much extra, so we’re tactically stretching our rands and cents.
What which means is we’re re-evaluating our protein portfolio. We’re re-evaluating our staples portfolio. We’re seeing folks transferring out of frozen hen with the excessive inflation in that area, and in search of [alternatives] – and that’s actually the massive shift.
We’re seeing some issues which can be attention-grabbing. Now we’re extra folks going again to workplaces, we’re seeing issues like espresso and long-life milk beginning to stabilise, whereas we noticed actually excessive progress in the course of the pandemic.
Curiously, within the inverse of that, in issues like private care and notably deodorant, as individuals are going again to the workplace I’ve seen an uptick in gross sales and seeing some progress as folks return into the workspace and their wants for what they must have change.
NZINGA QUNTA: Thanks a lot, Jon-Jon. Jon-Jon Emary, retail intelligence technique lead at NielsenIQ, was talking to us about how shopper behaviour is altering.
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