School of Retail
"I find trade intelligence to be extremely helpful in updating information regarding trends in the FMCG trade."
THIS ISSUE: 05 Aug - 11 Aug
According to the beard tuggers over at the Finscope SA small business survey, there are around 5.5million small business owners in South Africa, owning a similar number of small businesses. Of these, 78.7% are retailers, who buy products and sell them on, rather than providing services or adding value in any other way. Of these, 70% operate from home, and 67% simply provide support for their owners. However, 27% employ somewhere between one and four people. The implications of these numbers are quietly staggering – the implications are that there are over 11 million people employed informally in SA, which puts something of a dent in the jobless numbers. More importantly, it indicates where state money might best be spent in growing enterprise, growing the economy and growing employment.
Comment: And where suppliers might wish to dispose of a growing slice of their customer marketing spend…
Financial Mail 05/08/11
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Nothing groundbreaking here, just a general round up. Shoprite, it may please you to know, has gone from a R17.9billion rand business in South Africa in 2003 to a R53.4billion business in 2010. In the same period, its African business grew from R2.3billion to R7.2billion, with more to come by all accounts. This more than impressive growth has underpinned its delivery to grateful punters: the Shoprite share has been trading on an upward curve for absolute yonks – in November 2005, you could have had one of the little blighters for R16, if you’d had the nous; now you couldn’t lay your hands on one for under R100.
Comment: And don’t we wish we had.
Ominous rumblings up the turnpike suggest that P&G might be wishing to up its stake in the South African economy, courtesy of its close association with Walmart. Now, we are informed, P&G-contracted distributor Diplomat has established a bridgehead here with an initial investment of R23million and another R15large in the pipeline, and DCs already built in Gauteng, Durban, Cape Town and Port Elizabeth. The business has employed an initial 90 staff and is targeting 400 by the end of the year. It will initially distribute a P&G product range which includes personal and health care, but is looking to enlarge its portfolio in other categories such as food and cosmetics through new business opportunities. While Diplomat is already cosying up to the likes of Cambridge on P&G’s behalf, it also has plans to make inroads into the independent and informal sectors. Comment: A highly competitive space to be entering, with some major established players.
Financial Mail 12/08/11
So here’s what we’ll do, stage a big, brassy, Yankee takeover of a distinguished British brand, raising all sorts of hell in Blighty about the plundering of the stately businesses of old England, then sit on it for 18 months, dust it off and polish it up then split our business in two again, with the snacks division including Cadbury worth a projected US$32billion per annum and the grocery division US$16billion. It’s unclear whether the snack division, grown through a flurry of strategic acquisitions by Kraft, will bear the proud old Cadbury name or not. Speculation says that the move comes from shareholder pressure, with the punters eager to protect the businesses from each other.
Comment: A jolly old how’s-your-father, what?
Unlisted staples merchant Premier Foods has announced that it’s keen to branch out through merger or acquisition into other categories, and to expand its African footprint. Word on the street is that AVI, for example, would be one of the businesses with which Premier is keen to chat.
Credit crises, markets in freefall, High Street UK ablaze, we’re readying ourselves to ride this one out, don’t know about you. Projections this side are a “downside threat” to GDP growth according to economists, and job losses to the tune of 500,000 this year.
Tatler Reporter 11/08/11
Unilever’s underlying sales rose 7.1% for the six months to June, a pretty good indicator that CEO Paul Pohlman’s strategy to introduce new products (or old products to new markets) is paying off – for e.g., the launch of Lipton Sun Tea, and the rollout of Knorr Jelly Bouillon in sachet form to China.
Business Report 05/08/11
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