Trade Tatler
"Free trade is not based on utility but on justice.”
Edmund Burke

TATLER ARCHIVE

THIS ISSUE:     15 Oct - 21 Oct

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Clicks  Arise, Sir David Kneale! What? Oh sorry. Yes we see how that might be confusing…

Clicks’s’s retail turnover increased by 10.9% to R10.8billion for the year which ended, in a manner of speaking, in August 2011, while its margin improved to 6.6%, resulting in a 13.9% increase in operating profit for the period. This despite the fact that it was coming off the high base (in so many ways) that was 2010, and the other fact that selling price inflation was only 1.6% for the period compared with 2010’s 5.4%. How did they manage these numbers, you ask? Clicks itself, as usual, which posted real sales growth of 12.0% and continued to grow its share of the pharmacy market, with 31 new stores added for a total of 400, and 32 new in-store pharmacies, for a total of 283, operating margin up from 6.9% to 7.7%, and operating profit up by 25.8%.
Comment: No surprises then, and we promise no comments about the general stickiness of knitting, either.

Tatler Reporter 20/10/11

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Shoprite  The Floors of Perception

The Big Red One garnered, if that’s the word, and we have no real reason to suppose that it is, number one slot in the Supermarket and Hypermarket category in the Sunday Times/Sowetan Retail Awards. Second place, or runner-up, whichever they’d prefer, went to Pick n Pay, with SPAR zipping in in third. According to Shoprite Marketing Director Neil Schreuder, they aren’t chasing awards, but with customers and their needs in constant focus and the consistent delivery on the brand promise of “lower prices you can trust, always”, awards tend to chase them. According to one of the boffs over at TNS Research Surveys, Shoprite’s massive footprint across all LSMs didn’t hurt either, particularly with competitors like Pick n Pay being more strongly identified with the upper LSMs. The grocery boys also dominated the Retail Grand Prix, with Shoprite once again in first, PnP second (or runner up) and Woolies driving a black Aston Martin in third.
Comment: When it comes to consumer surveys like this one, perception is reality, and there’s not much point in disputing it.

Tatler Reporter 19/10/11

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Andrew
21 October 2011 (03:52:53 PM)
Wuld Shoprite be Shoprite Group incl Shop / Checkers / U-Save & PnP Group be PnP Excl Boxer stores ? Concidering the LSM comment ....

Pick n Pay  Uh oh

More on those results: there seems to be a growing feeling among shrewd, leathery, matchstick-chewing analysts that Pick n Pay might have turned some sort of a corner, with sales up 7.4%, ahead of the market, and a whacking 4.1million cardholders signed up in the spanking new Smart Shopper Programme. On the downside, of course, there’s the small matter of profits down 31.7%, a fact which Pick n Pay have substantially attributed to investments in, erm, the spanking new Smart Shopper Programme, central distribution and an ongoing restructuring of their buying operations. Some of the more gimlet-eyed analysts have pointed out somewhat unkindly, that these measures while impressive, have yet to be proven.
Comment: If you ask us (and you probably shouldn’t) Pick n Pay looks like its squaring up to be a “buy”.

Business Report 20/10/11

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MANUFACTURERS AND SERVICE PROVIDERS

Wilmar Continental  Lubricating the deal

“Who?” you might ask, and as usual you would be wrong. Continental Oil Mills is the owner of some of SA’s best-known culinary oil brands, including Conti, Excella and Pan, while Wilmar International Limited, headquartered in Singapore is Asia’s leading agribusiness group, and the number one refiner and packager of oils in the world. Now the two businesses have joined forces to form Wilmar Continental Edible Oils and Fats, which move is likely to see an expansion of Continental’s operations in SA, as well as an increased footprint on the African continent, where they already have established businesses in Botswana and Zim. Continental is well-represented on the shelves of the major retailers and enjoys a robust relationship with the independent trade also. It has expressed excitement at the prospect of expanding with Walmart/Massmart as that other joint venture unfolds.
Comment: A viscous cat takes its place among the oleaginous pigeons.

Tatler Reporter 20/10/11

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Imperial Logistics  Head out on the highway

Heavy truckers Imperial Logistics have recently launched a Programme of Excellence in Supply Chain Management and Logistics with The Gordon Institute of Business Science (GIBS), an institute which describes itself as a place of hard work, inspiration, insight and hope and itself a heavy academic hitter in the FMCVG headspace as it were. The course will focus on supply chain strategy, global transportation, warehousing and distribution, manufacturing logistics and resource scheduling, particularly in the context of emerging markets. GIBS founder professor Nick Binedell is justifiably amped about the course, believing that “efficient and effective logistics and supply chain management have proved to be a catalyst for global competitiveness and economic growth for many dynamic markets.”
Comment: We ourselves have for years told anyone willing to listen that SA’s real future is as a logistics hub for the Indian Ocean rim and the African continent.

Tatler Reporter 20/10/11

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TRADE ENVIRONMENT

Retail Sales  Mad dogs and statisticians

What the?! That can’t be right! Retail sales up 7.1% for the month of August, you say, after a less than stealer 3% in July? Break out the Grand Mousseaux Vin Doux we saved from our Matric Dance after party! But what is this – a “statistical base effect”? Real sales up just 1.9% year-on-year with a 1.1% contraction from July to August, for a less than grand total of R42.9billion for the month? You disturb us strangely, with your talk of hard times in most sectors, particularly clothing, footwear and textiles, food and beverages, hardware, paint and glass, pharmaceutical, medical goods, cosmetics and toiletries. Still, Messrs. Basson and Badminton assure us that they are hopeful for a bumperish Xmas, so we’ll continue to, well, hope, we suppose.
Comment: It’ll all be fine, just as long as nobody says the “R” word. Lalalalalala, we can’t hear you!

Business Report 20/10/11

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SPAR  Labour strike out

A canny move on SPAR’s part, to decentralise its wage negotiations to the regions. This has meant that an ongoing strike of around 800 workers in its KZN DC has not affected operations elsewhere. Even in the blessed province itself, Mr and Mrs Punter have been thus far unaffected by stock shortages.

Business Report 17/10/11

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Pick n Pay  Let us never rest

In keeping with its “good, better, best approach to no-name brands, Pick n Pay has just launched “Finest”, a range of sophisticated food products made from premium ingredients, raw materials and flavours sourced from around the world, including Kalamata olives from the Greek Peloponnese and organic coffee from Antigua, where we spent an irresponsible six months aboard a schooner in the declining years of the last century. And we weren’t drinking coffee, we can tell you that for free.

Tatler Reporter 19/10/11

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Massmart  Quality, mate.

Besmirched and shunned by those government departments looking to score cheap union points, Massmart nevertheless continues to do good work with others, notably this week SABS, with whom it has signed a deal that will make it cheaper and easier for smaller suppliers to score that ever-important SABS stamp of approval.

Business Day 12/10/11

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