South Africa-based businesses in the consumer and retail markets are facing a myriad of challenges, including slowing local economies, resultant pressure on their bottom line and customers, new global competitors, and a changing political and regulatory environment.
In addition, consumers are now in a position of power - being able to access the global marketplace through their mobile devices to research, shop and pay for products. The emergence of social media has significantly changed how retailers communicate and engage with consumers and has shown the power of consumers to positively or negatively influence the brand of a retail and consumer company.
Our Retail and Consumer industry specialists understand the industry and deliver tailored solutions to our clients in order to fulfill our purpose of building trust in society and solving important problems.
Utilising specialist skills and technology, our Tax Services assists clients in complying with South African tax-related legislation and regulations, such as:
Carbon tax at a rate of R120/tCO2e came into effect on 5 June 2019. On 23 December 2019, new rules were introduced that make provision for the licensing of emissions facilities, the calculation of the amount of environmental levy payable, and the submission of carbon tax accounts and payments.
Transfer pricing has emerged in the global economy as one of the most important tax issues for multinational companies, being an important driver of shareholder value by providing an opportunity to optimise the value of a business through effective tax rate and foreign tax credit management. The South African Revenue Service (SARS) has continued to focus on transfer pricing and consequently, organisations need to understand their approach to transfer pricing risk and dealings with SARS.
Provision for doubtful debts
IFRS 9 became effective for financial years ending on or after 1 January 2018 and requires the expected credit loss allowance to be based on general and specific debts. The new section 11(j) became effective for financial years commencing on or after 1 January 2019 and allows taxpayers to claim an allowance of either 25% or 40% depending on the basis on which the accounting impairment has been determined. Taxpayers may also apply for a SARS directive that allows a higher rate (up to 85%), provided certain requirements are met.
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Sustainability (i.e. Environmental, Social and Governance, ESG) risks have remained at the top of identified global risks presented by the World Economic Forum (WEF) for a number of years. The level of interest in value added (or taken away) and social impact will continue to increase.
Customers are increasingly demanding that retail and consumer companies reduce their carbon footprint in sourcing products locally, use more environmentally friendly packaging, and have a positive impact on the communities they serve.
The global community increasingly expects business, as a key role player in society, to take the lead in responding to their needs and the impact they have on their business, its strategy, its reputation and its licence to operate.
We work with you to develop a strategic lens through which to quantify, evaluate and then communicate the effects of your organisation’s activities and decisions.
Consumer and retail businesses are increasingly being challenged by new entrants into the market. Businesses need to ensure that products are priced competitively and provide the value that customers are looking for.
Over the past few years, South African retail and consumer companies have expanded rapidly into new markets, mainly the rest of Africa, Europe and Australia. In addition, the sourcing of products from new territories (particularly Asia) has been driven by the need to provide customers with the best quality product at the best price.
Challenges in this space include slowing economies in certain territories, complicated supply chains, shortage of foreign currency, fluctuating exchange rates and adapting merchandise to countries with warm year-round climates.
We work with you to provide advice and assistance in the implementation of your global strategy and your response to increased competition from foreign and online entrants.
Retailers face one of the most competitive environments in decades. With the continuing shift in customer preferences towards online shopping, a lingering low-growth environment, highly indebted consumers and an unforgiving marketplace that demands unprecedented technological sophistication, some retailers are being confronted with threats to their very existence.
We design strategies to help you to rebase your costs to this new normal, identify new areas for growth and maximise growth of existing revenue streams, manage your IT systems given these new requirements, and identify the appropriate organisational structure and talent needed for this new world. We help you execute them, deliver value and ensure long-term success.
Consumer markets remain focused on optimising supply chains and improving distribution infrastructure. Our industry specialists have identified centralisation of distribution systems and logistics management as key drivers leading to operational efficiencies for our clients.
We assist you by developing and enhancing organisational strategies, defining customer management and insight strategies, determining the right product mix and delivering the optimal organisational structure, systems and processes to protect existing - and grow new - revenue streams.
Digital technologies are also affecting every aspect of how companies run their businesses, challenging established supply chain and operations setups. Companies need to transform linear supply chains into autonomous supply chain ecosystems. Digital transformation ushers in new real-time data gathering across the supply chain, smart analysis, and algorithms to better simulate and predict different supply chain scenarios and foster data-based decision-making.
In the Experience Economy, a customer’s real-life interactions with a brand can form impressions more intense and lasting than those created or offset by traditional marketing communications. Experience has become the brand. Consumers expect more enjoyable and consistent interactions across all touchpoints. As technologies evolve, data proliferates, markets are disrupted and customer expectations shift.
We help businesses and their brands move at the speed of customers. We harness business strategy, analytics and behavioural science to help you rapidly uncover opportunities to create new value through customer experience. We work with you from ideation through delivery – envisioning tomorrow’s possibilities and leveraging data, insight and technology to bring to life meaningful, differentiating experiences. PwC helps reimagine – and reshape – the enterprise around the customer while unlocking value across the front office.