Assalamu Alaikum,

Welcome to Issue #16 of MYCOE Retail Matters.

This week, the people paid to predict the economy got it wrong. Most economists expected the Reserve Bank to hike interest rates after inflation jumped to a two-year high. Instead, the MPC held steady in a split 4-2 vote. Meanwhile, the fuel relief retailers were counting on for August has all but disappeared, an international hardware giant is rolling out stores across the country one mall at a time, and a global watch brand just opened its first flagship store in Cape Town. Nothing this week went exactly to plan, and yet retail investment kept moving regardless. This issue, we unpack why the retailers who win from here will not be the ones who guessed right. They will be the ones who built businesses that work whichever way the data breaks.

South Africa’s headline inflation accelerated to 5.0% in June, its highest reading since June 2024, up from 4.5% in May and the fourth consecutive monthly increase. Most economists called a rate hike all but certain. Instead, the Reserve Bank’s Monetary Policy Committee held the repo rate at 7% (prime 10.5%) on 23 July, in a split 4-2 decision.

It would be easy to treat this as a story about the Reserve Bank. It is actually a story about certainty, and how little of it retailers actually have to work with.

As I shared on LinkedIn recently, Shoprite’s AI assistant Pixie now handles the vast majority of active Sixty60 Xtra Savings Plus orders, learning what customers want before they even search for it, with one customer completing a R1,500 grocery order in just 15 seconds. The retailers who win with tools like this are not the ones betting on a single forecast of customer behaviour. They are the ones whose systems are clean and connected enough to respond correctly no matter which way demand actually moves.

What this means for retailers:

CEO Takeaway: The retailers who win the next few months will not be the ones who called the rate decision correctly. They will be the ones whose businesses did not need to.

Four fresh releases this week tell a story of rising cost pressure and a shrinking safety net, even as consumers keep spending.

Consumer inflation accelerated to 5.0% in June, up from 4.5% in May, Stats SA reported, the fourth straight monthly rise and the highest print since June 2024. Transport costs, driven by higher fuel prices, were the largest contributor.

Retail implication: This is now a clear trend, not a single bad month. Input costs are rising steadily, and if your pricing has not moved to reflect it, your margin is quietly absorbing the difference.

The MPC voted 4-2 to keep the repo rate unchanged at 7% (prime 10.5%) on 23 July, despite widespread expectations of a hike given the inflation print.

Retail implication: Do not assume borrowing costs are on a fixed path in either direction. If credit, supplier financing or store expansion depends on rate movements, build your plans around a range of outcomes, not the consensus forecast.

Retail trade sales grew 2.3% year-on-year in real terms in May, Stats SA confirmed, though month-on-month growth slowed to 0.1%, down from 0.9% in April. Clothing and online categories were the strongest performers.

Retail implication: Consumers are still spending, just at a slower pace than earlier in the year. Watch your own category performance against these two leaders before assuming your slowdown, or growth, is unique to your business.

Petrol prices are set to drop only slightly in August, around 54 to 59 cents a litre, far less than earlier hoped, while diesel is now expected to rise by 66 to 87 cents a litre as Middle East tensions push global oil prices higher.

Retail implication: The delivery cost relief many retailers were banking on for the second half of the year is largely gone, and diesel-reliant supply chains face a fresh increase. Rebuild your logistics cost assumptions now rather than waiting for the pump price to confirm it.

Three very different retail bets landed this month: a mall built for an underserved town, an international chain expanding store by store, and a global brand’s first flagship in the country.

A new 37,000 square metre regional mall opened on 30 April in Empangeni, anchored by Boxer, Checkers FreshX, Clicks, Dis-Chem, Edgars, Foschini, Shoprite and Woolworths Food, alongside standalone drive-throughs for Burger King, Steers and McDonald’s.

Retail implication: This is formal retail arriving at scale in an area that has largely relied on informal trade. If a similar development is planned near you, the retailers who define the category first, not just the biggest ones, tend to keep the customer relationship longest.

Malaysian retail giant MR.DIY, competing directly with Builders Warehouse and Leroy Merlin, continues rolling out stores in shopping centres across the country as it builds out its South African footprint, one mall at a time.

Retail implication: International chains are not waiting for economic certainty before committing capital to South Africa. If a global competitor is entering your category, the retailers who respond by sharpening their own specialism tend to outlast the ones who simply compete on price.

Casio’s G-SHOCK brand opened its first flagship store in Southern Africa at Canal Walk in Cape Town on 5 July, dedicating a standalone space to a single watch brand rather than a shelf inside a larger retailer.

Retail implication: Global brands are increasingly choosing standalone flagship formats over traditional shelf space, even in a single category like watches. A dedicated brand experience is becoming a real alternative to being one SKU among many.

CEO Takeaway: Whether it is a mall built for an underserved town, a foreign chain expanding one store at a time, or a global brand betting on a flagship experience, capital is still backing physical retail in South Africa. None of these developers waited for a settled economic picture before committing.

As I shared on LinkedIn recently, Shoprite says the vast majority of its Sixty60 Xtra Savings Plus members are already using its AI assistant Pixie, with one customer completing a R1,500 grocery order in just 15 seconds. Most retailers still think of AI as something that writes emails or answers questions. Shoprite is showing it can build the basket before the customer even starts shopping.

For independent retailers, the lesson is not to build your own AI shopping assistant tomorrow. It is that your product data, pricing and stock information are no longer just operational records, they are the raw material any future AI tool will need to work properly. Retailers with clean, structured data will be ready to compete when these tools become accessible at smaller scale. Retailers with disconnected systems will not.

As I shared on LinkedIn recently, retailers using RFID for stock takes are saving significant hours on counting, cutting picking and fulfilment errors, and freeing staff to focus on customers instead of paperwork. The real win is not the technology itself, it is the confidence of knowing exactly where every item is in real time.

For multi-store and multi-channel retailers, this kind of visibility turns stock takes from a periodic scramble into a background process, and gives staff time back for the part of the job that actually drives sales.

As I shared on LinkedIn recently, independent retailers are increasingly selling across their own store, a website and marketplaces like Takealot or Amazon at the same time. Managing product listings, pricing and stock separately across each of these channels creates duplicate work and a real risk of overselling stock that has already moved elsewhere.

For retailers expanding into marketplaces for the first time, the lesson is to solve for one connected view of stock and orders before adding a third or fourth sales channel, not after.

A retailer in our network wanted to add commercial delivery vehicles to reduce reliance on unpredictable fuel costs, but assumed electric trucks were still years away from being commercially viable in South Africa. As I shared on LinkedIn recently, China’s manufacturing scale has already driven down battery and vehicle costs to the point where electric commercial fleets are commercially viable now, not just environmentally appealing. The opportunity for South African retailers goes beyond charging infrastructure alone, it extends to fleet management, energy optimisation and smart scheduling. The fix for this retailer was not to wait for a “someday” technology. It was to start planning fleet and energy decisions now, before the businesses that move early lock in the advantage.

Shoprite is building trust through data, letting its AI assistant Pixie learn each customer’s habits well enough to complete a R1,500 order in 15 seconds. The bet is that convenience and personalisation, done well, become the reason customers stay loyal.

G-SHOCK is building trust through presence, opening a dedicated flagship store so customers experience the full brand in one place rather than finding it on a shelf among competitors. The bet is that a focused, immersive space earns attention that a single SKU cannot.

Lesson learned: Neither approach is right or wrong, they are different answers to the same question: what actually earns a customer’s trust today. An independent retailer will rarely have Shoprite’s data scale or a global brand’s flagship budget, but every retailer can choose a lane, personalise what you already know about your regulars, or make your physical space say something a marketplace listing never could.

How to apply this: Pick the trust-building lever that fits your business, data-driven personalisation or a distinctive in-store experience, and invest in it deliberately rather than trying to do a little of both without doing either well.

What it is: Software that studies a customer’s past purchases and browsing behaviour to suggest what they are likely to want next, whether that is on a website, an app or at checkout.

Best suited for: Retailers with an online store or app and enough repeat customer data to identify real patterns, particularly in categories like groceries, fashion and homeware where customers buy repeatedly.

Cost: Varies widely by provider and the volume of customer data involved. Several platforms now offer entry-level tiers built for smaller catalogues, making it possible to trial the technology on one category before a full rollout.

Retail use case: An online or app-based retailer can surface the right add-on item or replacement product automatically at checkout, instead of relying on generic “customers also bought” lists that do not reflect an individual shopper’s actual habits.

Expected return: Higher average order value, fewer abandoned carts, and a shopping experience that feels tailored rather than generic. Weigh this against how much repeat purchase data your business currently has before committing, the technology is only as good as the data feeding it.

The safest plan is rarely the one built around a single prediction. It is the one that still works when the prediction turns out to be wrong. That applies to a rate decision, a fuel price update, or a bet on where your next customer will come from.

The retailers who come out ahead this quarter will not be the ones who guessed correctly. They will be the ones who built businesses resilient enough not to need to.

Retail Matters reaches a highly targeted audience of retailers and decision makers across South Africa.

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Wa’alaikum Assalam,

The MYCOE Retail Matters Team

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