The Discovery Group head office in Sandton on 26 February 2025. (Photo: Waldo Swiegers / Bloomberg via Getty Images) | The Woolworths website. 
There are times when I go to places in our society where I look around very carefully before I take out my lunch. I’m not ashamed of my lunch. It should probably have fewer carbs, but generally I’m pretty excited about it.
It’s because it’s usually in a bag that proudly bears the Woolies logo. And a Woolies bag is almost as bougie as you can get (besides having an Apple laptop and an i-cult-Phone).
But despite everything happening around us, the strength of the upper-middle-class market that Woolies and others are tapping into is just extraordinary.
Yesterday, Woolies announced that their food business delivered “above-market turnover” with 7.7% growth on a comparable store basis. More people went to Woolies and more people spent more money there.
Now, you can understand how food sales could grow by 9.2% – we are a growing population. But their price movement (in-store inflation) was up 5.3%. Shoprite’s in-store inflation, published on Tuesday, was below 2%.
That means that many, many people are very happy to go to a place where they know they’ll pay more.
And, dear reader, the fact that you are part of the After the Bell Community might just make me think you happen to be one of them.
I get why you do it. Their cold chain is unbeatable, their products are virtually always fresh, their service efficient and, more importantly, when you leave their stores you are happy with what you bought.
You keep going back to Woolies (I pray it’s not for the cappuccinos) for the same reason you keep using the Checkers Sixty60 app. It just works.
Interestingly, the same can be said for another big name among our upper middle class.
Discovery released a trading update yesterday in which it said its headline earnings will be up by about 30%. And it looks like they’ve had a strong year across the group, whether it’s Discovery Life, Discovery Health or their insurance arm. Interestingly, even Discovery Bank is breaking even earlier than expected.
I have many questions about Discovery, but obviously the most burning is about our airports.
Who at Discovery spoke to who at the Airports Company South Africa about that special checkpoint that allows Discovery Bank customers to avoid security queues at some of our terminals?
Now look, it’s probably a great perk to have. But if one day you hear that the revolution in South Africa started in the domestic departures terminal at Cape Town International, don’t be surprised.
You read it here first.
I think the secret to the success of these companies is that they give their customers what they want. And over time we’ve come to feel that we need them, and can’t live without them.
It’s easy in the case of Discovery – you want to avoid government healthcare so you use their medical scheme. Then they have you in their system and things go on from there.
In the case of Woolies it’s reliable quality.
In a land where middle-class braais are littered with the lament of being “rand-rich and dollar-poor”, Discovery and Woolies make you feel rich, if only for a moment.
It’s also important to remember that this also sends another signal about South Africa, that despite all of our problems you can still make a lot of money. You have to provide a good and reliable service, and make sure you manage it properly, but there are literally packets of cash to be made.
These are world-class companies that can also employ people and use all of their abilities and skills. I haven’t been in either of their head offices, but I imagine they’re pretty slick. You could probably go into either and think you are in Beijing or New York, or the better parts of London.
That can give a lot of people with ability the scope to have long, productive and interesting careers.
All in all, these companies are a positive good, probably for almost everyone.
But I am a little disturbed. They are able to increase their earnings dramatically while our economy is not growing, and millions of people are desperate for work.
I fully understand our desire to insulate ourselves from our reality. I do it too. But I’m not sure we can go on like this forever.
In the meantime, you and I in the middle classes will do what we always do. We’ll live and work and braai and have the family around on Saturday morning. And as we all stand for the national anthem, breakfast will come out of those Woolies bags. DM