School of Retail
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THIS ISSUE: 28 Oct - 11 Nov
The jolly green retailer that somehow isn’t a retailer grew turnover 10.4% to R38.459billion for the year to September, while operating profit was 7.8% higher at R1.404billion. Wholesale turnover increased by 8.6% to R31.9billion. Retail trading space was up by 3% with the opening of 25 new stores, for a total of 859. Of these, it added another 5 to its in-house retail division, for a total of 10, although sadly those stores are not contributing vastly to the swag, with the division losing R29.9million for the year. On the upside, liquor was strong like witblits, with TOPS lifting turnover to the tune of 19.9% for a total of R2.6billion, and wholesale sales in hardware up 18.2% to R3.9billion over at Build it on a Saturday morning.
Comment: Powerful, confident stuff for a business which hit its stride some years back and like that feller on our favourite bottle of scotch has just kept walking.
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After decades of safari suits and Lion Lager on the board, Shoprite has signalled its willingness to appoint die vroumens to the board of SA’s butchest retailer. Within months, it says, there will be two women (of some stature, they assure us) in the burgundy leather boardroom down in Brackenfell. And these women will not even be required to conceal their ankles in public. About time, we hear you mutter. Some of you, anyway. But the average punter has not been so vocal. This might be because, when it comes to just knuckling down and showing us the money, Shoprite has never stinted. And so it continues. For the three months ending September, real turnover was up by 7%, with sales in the South African arm up by 10.8% and Africa by 13.9%. This pleasing trend has caused the Big Red One to wax bullish about its festive prospects. Comment: Nice work, gents. And of course ladies. At some point.
Business Day 31/10/11, IOL 01/11/11
Sales at the actual Clicks division of the Clicks Group were up 13% to R9,79bn for the year to August. Of this, price increases contributed only 1%, with volume increases of anyone? 12% accounting for the balance. Like store sales were up 7.5% by volume and 8.5% in value. The rest of the business, not so good. Musica, for whom we have an unbelievable business model if they’re interested, saw pre-tax profit decline 40% to R31,4m, Body Shop grew profit just 4% to R20,6m while UPD’s pre-tax profit slid 20% to R130m, and this is unlikely to improve much with 2012’s freeze on medicine prices. But Clicks, ah, Clicks, now. 32 new pharmacies for a total of 283, and store numbers which grew by 31 to 400.
Comment: They may be a one trick pony right now. But it’s a hell of a good trick.
Financial Mail 03/11/11
In Mozambique, the Big Feller is getting into this whole trendy micro-brew artisanal thing everyone is getting so excited about, making a beer out of the local root Cassava under the Impala brand, which, it hopes, will capture an eventual 10% of the market. Impala will go up against mainstream beers, priced at around 75% of the average, and also against local home brews, which are about a third of the price, but which often contain lumps. One of the challenges of the Mozambican market is the locals’ stubborn insistence upon not drinking nearly as much as they should in order to support a vast multinational brewer in their market. Mozambicans consume around 8 litres of beer per capita every year, compared with 60litres on the thirsty side of the border.
Comment: One of the many great things about cassava beer is that you brew it using ingredients bought inexpensively from local farmers. A win/win situation if you’re familiar with the expression.
Business Day 02/11/11
Sugar and Golf Estate barons Tongaat Hulett have released a tidy set of interims for the six months to September and the word we believe you are seeking is “corker”: revenue up 27.6% to R6.027bn and profit from operations expected to increase to R1.047bn from R963m, of which the increase in profit from operations will be 25.7%. The crop is 14% bigger than the 1million tons produced in 2010/11. But all is not green and gold in the Land of Sugar Production, we are told. The South African Sugar Association (Sasa) says that it is damnably difficult to earn a crust making the sweet, crunchy stuff, and that if the government has a shred of decency it will let beleaguered producers venture more robustly into large-scale power generation and ethanol production. The industry produces 20-million tons of cane each year, the biomass of which is equivalent to 1,75-million tons of coal with a power-generation potential of 1,6GWh. Comment: And who among us would not love to drive a gold plated roller with a bevy of willing concubines in the back seat?
Business Day 01/11/11, Fastmoving 07/11/11
Kraft Foods, recent acquirer of Cadbury’s, is launching a 3-in-1 dispenser unit to the informal trade, in which hawkers will be able to display the popular Hall’s, Chocolate Éclairs and Chappies brands together. The very cool thing about the project is not simply that it brings a degree of affordable formality to informal retail, but that it does so to the benefit of the Awethu Project's youth entrepreneurship programme, which aims to produce world-class entrepreneurs from under-resourced backgrounds in South Africa. One of Awethu’s first entrepreneurs, Chris Pienaar, will be punting the units to spaza shops, hawkers and general dealers in Alexandra from later this month. Awethu has recently been recognised with a major global social entrepreneurship award.
Comment: Another thing we love is that businesses like Kraft take the embattled pavement sector so seriously. Nice one, everyone.
Bad news for those enterprises which earn a living by allowing punters to run up an ultimately crippling tab over at the Savings and Loan is that consumer debt is still headed south. Growth in private-sector credit extension slowed to 5.5% YOY in September, down from 6% in August and well below expectations among beard-tugging economists for a 5.9% increase. What on earth is going on, you ask, and we’ll tell you: it would appear that consumers are already burdened by high levels of debt and are reluctant (or indeed prevented from) taking on any more. This is borne out by the similarly depressed household borrowing numbers, which grew at an annual rate of 5% in September after an increase of 5.2% in August. The worry here – even for non-credit businesses – is that consumer spending is one of economy’s major growth engines. Comment: Although the messages if you happen to be a consumer, as many of you doubtless are, are confusing: Borrow! Spend! Whoah! Stop! Now shove it all under the mattress as if you are Japanese!
Business Week 01/11/11
Last week, leaders from business, the government and organised labour signed an accord which set a target to procure at least 75% of supplies from locally based companies to protect and create jobs and enterprises, and also if we know Mr Ebrahim Patel to prove some sort of a point. Fifteen companies with a combined annual turnover of about R350billion pledged their support in the accord, and anyone who could supply us with a list of those will get a free subscription to the Trade Tatler. Probably.
Tatler Reporter 10/11/11
Willow Creek Olive Estate has garnered if that’s what you do a gold medal at the prestigious SA Gold Pack Awards, who commended them for the sensuous manner in which the flow and direction of the olive oil may be directed from the 1.5mm nozzle of its Gourmet Squeeze bottle.
Big Mike11 November 2011 (08:18:02 AM)ooohh. Can't wait for the the convenient picnic basket economy size botle to be released, hopefully in time for the post Boxing Day Turkey sarmies.
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