What a R 516 billion sector wants from accountants

South Africa’s retail sector is massive. Zinhle Tyikwe, CEO of the Consumer Goods Council of South Africa, explains some of the challenges and opportunities for businesses and accountants in this space.

The only time the retail sector crosses the minds of many accountants is when they stop off at the supermarket on their way home from their auditing firm jobs. Surprising given that it’s a R516 billion sector according to NielsenIQ.    

“I’m not sure if accountants understand the opportunities that are in the sector,” says Zinhle Tyikwe, CEO of the Consumer Goods Council of South Africa (CGCSA). “If you want to be an accountant, you may think, ‘I must go and work in a bank, or I must go and work in a manufacturing plant or auditing firms.’ I’m not sure if they think of the opportunities, even among small retailers.” 

Tyikwe says, “We find that in South Africa, accountants are coming through from an auditing firm. Their strengths are more in auditing than financial management and understanding the retail environment.” 

So what about the retail sector makes it unique, and what should accountants seeking business and opportunities keep in mind?  

  1. The retail space is complex and changing 

The retail sector faces increasing scrutiny and costs associated with sustainability that didn’t exist in the space previously.  

Tyikwe references the extended producer responsibility regulations, which became mandatory for the paper and packaging sectors this year. “If you’re a producer of a product, let’s say canned beans, you need to make sure that it’s recyclable. If it’s not, what percentage of it is recyclable? Lets say 50%, you have to pay a levy on the 50% that is not recyclable.”  

“That’s a cost that was never there from an accounting perspective which must now be considered.” 

Tykiwe also references the so-called sugar tax as an example of additional costs. “You must decide how to manage it, whether to pass it on to the consumer or absorb it. Accountants are key.” 

“It’s not just levies,” says Tyikwe. “If you label your product incorrectly, the government comes and says you have to pull it all back.” There are also extensive food safety regulations that retailers have to adhere to.  

“Accountants are not just now sitting in the background looking at income and expenses and the profitability of the organisation. They need to go and look and say what other tools, systems, regulations and policies impact the bottom line.” 

There is a lot of red tape, which accountants can help navigate  

Regulations and compliance create work for accountants but can stifle growth. Tyikwe is not against all regulations saying that it’s important to have regulations and guidance from the government regarding food safety, for instance.  

However, Tyikwe says, “There is overregulation in areas where we don’t think it’s necessary.” She references a recent case where the CGSA got a court interdict to stop the Food Safety Authority from seizing so-called ‘meat analogue products. These are products like veggie burgers or mushroom biltong, which have labels traditionally used to describe meat products.  

“You’ll find that government is like, ‘Oh, these goods are fraudulent. They should not be there because they’re using meat names when they’re not made out of meat.’ They’ll focus on that and say, ‘we need to remove those goods.”  

“They haven’t thought about the cost of getting those goods manufactured, packaged, the logistics,” says Tyikwe. “What will be the impact of the business taking this product out and repackaging them, considering that these goods have a certain shelf life.”

But there is also opportunity  

“If an enabling environment is created where there’s regulatory and policy certainty, this industry can create employment for South Africans,” says Tyikwe. The sector is the country's second largest employer, according to the Retail Sector Report.    

She notes that the sector is incredibly diverse. “We just want multi-skilled individuals who can work in any sector.” This includes accountants.  

Tyikwe is due to speak more on the opportunities for accountants in the sector at the SAIBA’s upcoming Practice Management Conference.  

“If an accountant is provided an opportunity to not just focus on accounting but also business operations, they do wonders.” 

Register for the Practice Management Conference - an SME Accountant Show today

https://saiba.academy/practice-management-conference-pmc-2022/