School of Retail
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THIS ISSUE: 14 Jul - 21 Jul
Checkers, which was previously to be found net om die hoek, but is now pretty much everywhere, has had imposed on it by the Advertising Standards Authority one of the harshest possible sanctions – the submission of all future advertising, at its own cost, for scrutiny by the ASA, for three months. Has it falsely promised shoppers a free Tata Chery with every tin of Frisco purchased (while stocks last)? Undertaken mendaciously to reveal the true identity of Donald Trump’s hairdresser? No. Old nemesis Pick n Pay has objected to the use of the term “Unbeatable” as it relates to the popular Victorian-themed Heydays promotion, which we are assured is not only Unbeatable but also Big and Back. Fair enough says the ASA. However, it’s when Checkers promise “unbeatable deals for this week only” that things get sticky, because this implies you can’t get those prices elsewhere. Ahem, says Mr Badminton. Comment: Break it up you two. For goodness sake.
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Joining the ranks of the retailers who aren’t going to rush it in Africa are SPAR, who nevertheless have more than a passing interest in this great and mysterious continent. According to Captain Hook, the model for expansion into Africa might not be the traditional DC setup. As he so correctly points out, if you’re going to drop R400 bar on a warehouse, it’s a good idea to have some stores in the area. Currently, the Gauteng DC is supplying stores in Namibia, Botswana and Swaziland, as well as some independent SPARs in Zambia and Malawi, which are licensed directly from Amsterdam. However, Wayne Hook is confident that SPAR South Africa would receive licenses from SPAR Head Office to open up elsewhere in Africa – for e.g. Angola, where SPAR is looking for somebody local to work with. SPAR currently owns a 35% stake in a Zimbabwean business that owns 68 stores and has recently opened a SPAR and a Build it in Mozambique. Comment: The rollout of modern retail in Africa is one of the biggest business stories of our age. Nice one, that friendly green feller.
In further evidence of Massmart’s designs upon the food market, the Men in Black have made an offer to purchase Fruitspot, a supplier of fresh fruit and veg, for one of those “undisclosed amounts” that are always so welcome when they pitch up on the bottom line. Fruitspot was established by the brothers Ferreira in Jhb in 1989, and now occupies a handsome 12,000m2 facility in Marlboro, which cost them R60 big at the time, to give you an indication. Fruitspot, which interestingly serves other retailers including SPAR, will join lonely old Makro in the Masswarehouse division should the deal be approved by the Competition Nazis Commission. Fruitspot buys much of its produce directly from farmers, which is interesting, as it is one of Massmart’s supplier development goals, driven now by the energetic Mr Mthunzi (see Welcome above) to develop local farmers. Comment: “Dramatic” is how Massmart’s intended growth has been described by no less a personage than Walmart’s Doug McMillon. Here we go...
Anglovaal Industries Limited, which always struck us as such a nice Randlordy sort of name, is selling 100% of its share capital and shareholder claims to Blue Falcon 134 Trading, which strikes us as such a shelf-company sort of name, and is owned by RMV Venture Six, an arms-length FirstRand (get some punctuation!) subsidiary, and Denny’s executive management team. So a management buyout then, of a healthily-performing non-core asset which is “no longer strategically aligned to AVI’s growth ambitions”. Denny, you will of course know, is SA’s leading supplier of fungus and fungal products to a hungry market, and enjoys a market share of 50%.
Comment: A new beginning, one senses, for an iconic South African brand which would nevertheless be advised to drop the bubble writing typeface from its logo at some point.
One of the winners in the possible ban on liquor advertising could well be SABMiller, whose dominant position in the local market will be entrenched, even as it cuts back on spending, which according to Nielsen swilled back R700million of this year’s budget. Brandhouse has been doing some worried homework on the subject and has discovered that there is no direct correlation between an advertising ban and a decline in overall liquor consumption, and that how much a given emerging market pints is a result of a complex interplay of social interactions rather than how many billboard there are on the N1 depicting healthy multiracial friends drinking golden liquid from amply-bedewed glasses. Where advertising does help, they believe, is in getting the punter to switch brands to something in an enticingly emerald-coloured bottle. Comment: At which point we repair to the refrigerator, to crack a cold one. And yes, we know it’s 10.30 am. This newspaper doesn’t write itself, you know.
Business Report 11/07/11
Foxy Fairy27 July 2011 (08:54:47 AM)Very True! Advertising does not encourage an increase in alcohol consumption it merely moves consumers between brands. The real influence is friends & family (word of mouth). An advert acts as a stimpulant to a conversation and consumers become influenced by those around them & what they have to say about what a particular brand represents & how others view them with their association to a brand. Loyalty is also a key role player to a brand as advertising encourages change. Also all it will do is eventually cause a shift in the market and eventually resulting in another dominent player, dont believe it will level out, There will always be a dominent player, so if there is a dominent player at this point, why not SAB Ltd? (proudly SA)
Yesterday, you will be interested to know, Pick n Pay’s share price ticked up and Shoprite’s ticked down, bearing out the view of some otherwise hatchet-faced analysts that there is nothing fundamentally wrong with The Big Blue, who believes that in terms of consumer perception PnP remains SA’s number one grocery brand, although it has some work to do re expansion, both locally and continentally. But they knew that.
Mike21 July 2011 (03:49:40 PM)The good folk at the Tattler bringing back fond memories of the Neil Diamond concert.....with yet another rendition of "Song sung blue".
The hilarious thing about the new assault on Wakro by the ministers of Trade and Industry, Agriculture and Economic Development, on the grounds of shaky process by the Competition Tribunal, is that the Tribunal falls under Economic Development. The likes of Rob Davies and Ebrahim Patel should have figured out by now that when they donned the poorly-fitting suits of Cabinet Ministers they stopped being the stone-throwing radicals they still fondly imagine themselves to be and took on the responsibility of growing the economy.
Business Report 21/07/11
KWV CEO Thys Loubser, who has been at the proverbial helm of wine and spirits crowd KWV since the year 7, has resigned abruptly and will be replaced by André van der Veen, a senior executive at HCI, which has recently bought in and is effecting a new broom approach to doing business in the vintner’s panelled halls and cobwebbed vaults.
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