Trade Tatler
“Oh, it's funny how those once so close and now gone Can still so affect our lives.”
Johnny Clegg, The Crossing

TATLER ARCHIVE

THIS ISSUE:     13 Jul - 19 Jul

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RETAILERS AND WHOLESALERS

Shoprite  Shop of the desert

Reminding us this week of what a global powerhouse we still could be – and in many ways still are – is Shoprite, which joins FirstRand, Sasol and MTN in the Business Chief register of Ten Biggest Companies in the Middle East and Africa, as measured by revenue and reputation as an employer. Coming in at number 6, the Big Red One is cited for its 2018 turnover and profits. In other Shoprite news, it’s being accused by  the Namibia Food and Allied Workers Union (Nafau) of paying less than a living wage, no benefits such as a transport allowance, housing allowance or medical aid, and of preventing union members access to premises for recruiting purposes. For its part, Shoprite points out that Nafau lacks the requisite 50 + 1 percent majority required for recognition. Nafau dispute the maths.
Comment: Namibia continues to be a profitable but troubled geography for Shoprite, which might consider a bit of PR there and soon.

New Era 11/07/19

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SPAR  In the bag

SPAR is taking a typically considered and strategic approach to doing the right thing while bringing the punters along for the ride. We refer of course to its campaign in the Eastern Cape to reduce the use of plastic bags, Phase 2 of which is just launching. Shoppers there will get a free paper bag for every ten plastic bags they bring to the store, and SPAR is offering prizes to the total value of R250,000 for entities that come up with innovative ideas to make a difference. They will also be working with suppliers to achieve responsible packaging solutions. Phase 1 of the campaign, which ran from April last year, saw the sale of 4.3 million fewer plastic bags in the region compared with the previous year. “Plastic does have a place in our lives, but we have to find responsible ways to use it and to come up with innovative solutions for re-use,” says incoming SPAR Eastern Cape managing director Angelo Swartz.
Comment: All of us were born after the dawn of the age of plastic. It’s all we know, and we’re only now realising that its convenience comes at a terrible cost. Big up to those businesses like SPAR which are actively doing something about it.

Tatler Reporter 17/07/19

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Massmart  They’ve met their Mitch

It seems that the Wakro experiment, as we waggishly used to call it, is not over. Well, we knew that: the appointment of Walmart’s ‘fixer’, Mitch Slape, to the top job at Massmart sends a strong message, and it’s one that some analysts at least are apparently pricking up their ears and listening to. They point to Massmart’s intention to build 47 new stores between 2019 and 2021, mostly in Kenya and Zambia as a mark not of declining confidence in the home market, but as a bullish investment in geographies with higher economic growth and minimal penetration of formal retail, that are also a good fit for some of Massmart’s big box formats. Some have also suggested that with the Massmart share price down 60% since the initial acquisition, Walmart might be considering going all in and buying out the minority shareholders.
Comment: A story still in the making. We look forward to its next exciting chapter.

The Africa Report 10/07/19

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International Retailers  I, Robot.

Sticking with Walmart, 17,000 Walmart workers in Chile went on an indefinite strike last week, demanding to be compensated for the multitasking required by the business’ increase in automation. Increased automation “isn’t Walmart’s idea, it’s the way our clients have decided to shop,” said a spokesperson for Walmart, with breath-taking disingenuity. Tesco, in the meantime, despite recent travails, is going large, expanding to the tune of several hundred new stores in its second biggest market… anyone? Thailand! Where it already has 1,500 expressconvenience stores and about 400 larger shops under its Tesco Lotus brand. And back in the UK, Aldi are responding to growing demand with the launch of a range called, with striking boldness, ‘I Am Vegan’.
Comment: Re: Walmart, automation should not simply be accepted as a global public good which frees up workers to spend more time with their families or read Proust in beautiful public parks. For many, it’s a bind and a threat, and a product of an increasingly unpopular system which touts profits first and people last.

Tatler Reporter 15/07/19

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MANUFACTURERS AND SERVICE PROVIDERS

IMPERIAL Logistics  Running on empty

A profit warning this week from IMPERIAL Logistics, which has let it be known that earnings are likely to fall for the financial year through June with the write-off of up to R1.4bn of the value of its consumer packaged goods business here in the Beloved Country. The division brings in around a fifth of IMPERIAL’s revenue, but continues to make a loss in the face of a stagnant or shrinking economy and growing competition. There’s also going to be a major shakeup, says IMPERIAL, with the logistics outfit ridding itself of some assets, shedding jobs, classifying the business as a discontinued operation for the financial year and moving contracts to other divisions under a “different commercial model”. Overall, say IMPERIAL, while turnover is up, operating profits are down, hence the warning.
Comment: A tough business to be in, requiring fortitude, innovation and a very sharp pencil.

Business Day 03/07/19

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PepsiCo  A can do attitude, get it?

PepsiCo’s quarterly revenues were up last week, boosted by sales of no, not bottled water or healthy snackaging, but good old Pepsi, Lay’s chips, and Doritos. Beverage sales grew in part because of the move to smaller cans in response to punters who long for a shot of brown, sugary goodness without quite as many calories as in the more traditional receptacles. “You have the consumer shifting from bigger volume packages into packages that are smaller… but the price realisation is quite good on them,” says CFO Hugh ‘Show Me the Money’ Johnston. They might also have received a kick from the launch of berry, lime and mango-flavoured sodas in 12-ounce cans. Before we get too excited, it needs to be acknowledged that rival Coke have been doing some innovating of their own, pausing from their headlong rush into disposable water long enough to launch the orange-vanilla cola for which our civilization has been thirsting.
Comment: So there’s that.

Business Day 09/07/19

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TRADE ENVIRONMENT

Debt  Ticking up…

There may be an interest rate cut on the cards for South African consumers, and it couldn’t have come at a better time: according to recent data from the Reserve Bank, TransUnion, SA Savings Institute and National Credit Regulator (NCR), household debt is rising, household savings shrinking, and the number of people seeking debt counselling increasing. Consumers are apparently suing for debt to fuel consumption, and finding a wider range of lenders prepared to offer them a deal – TymeBank being a case in point. Household debt is currently up at 73% of disposable income, and about 10 million people have an impaired credit record, while unsecured loans were up +11% in the first quarter of 2019.
Comment: This is what we in the know call a ‘time bomb’, bad for consumers and the businesses which serve them.

Business Day 15/07/19

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