School of Retail
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THIS ISSUE: 03 Dec - 08 Dec
Clicks workers are out under the banner of a still strident SACCAWU, which is demanding on their behalf another R42 in addition to the average of R350-odd on the table. The offer from Clicks represents a 9.5% increase on last year, well ahead of inflation, but, say the men in the Maoist caps, still less than the company can afford. The current impasse, if that’s the word, comes after five months of negotiations. The bargaining unit involved in the spat consists of over 3,000 workers, of whom around two thirds are SACCAWU members. Clicks is digging in on its offer in the light of current trading conditions and the impact of the recession – whether the last one or the next they do not specify – on the South African consumer.
Comment: And there we were thinking that the deal struck between PnP and SACCAWU last week marked some kind of breaking dawn.
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Last week, the discerning reader will recall, we mentioned in one of our stories – as we have previously had occasion to do – a Botswanan outfit by the name of Choppies. Choppies has been giving SPAR a run for its money in that semi-arid paradise, buying out the odd franchisee where it has been able, and has even attempted the odd cross-border. Choppies, by Botswanan standards, is a big business – the biggest retailer there, and indeed the biggest employer. Now it has gone and listed on the Botswana Securities Exchange (BSE) and may even have designs on the JSE a couple years from now. It certainly has designs on South African territory, notably the North West, Limpopo and the Free State, and to this end will be opening a 10,000m2 DC in Rustenberg.
Comment: As Choppies themselves have pointed out, there’s currently no medium-sized player in the SA market. Yet...
Pick n Pay’s latest outlet, a US$3million behemoth, relatively speaking – it’s the single biggest shop in Zambia – in the newly opened Makeni Mall in Lusaka. Again, relatively speaking, PnP has embarked on a flurry of activity in that copper-bedecked non-basket case recently: Makeni is the third PnP in eight months and the fourth in total, and Mr B has said that they’ll be looking at six more in the next five years. 65% of the stock instore is locally sourced, and the Big Blue have reaffirmed their commitment to doing the right thing by local SMMEs and commercial farmers, from whom it sources all fresh produce. In addition, the retail chain is a major local employer, with 750 staff across the country. PnP’s investment in Zambia now runs to US$10million, a sum not to be sneezed at unless you have an allergy to Mopane blossoms. Comment: Nice one, that large blue chap. Not exactly the Red Tide you see elsewhere on the continent, but a start.
The Times 02/12/11
Those Pioneer results you have been so eagerly awaiting: revenue for the 12 months to September up 7% to R16,9bn, with operating profit before items of a capital nature down 15% to R1,2bn, and a sadly reduced margin of 7.1% compared with 8.9% in the year 10. Part of the problem has been the whacking R200million fine the group is carrying after its market-fixing activities were rumbled. The boytjies agreed to sacrifice gross profit of some bread and wheat products to the value of R160m. The good news for Pioneer anyway, is that this has increased price pressure on the competition, notably Tiger Brands, at a time of rising commodity prices and an increasingly strapped consumer base.
Comment: Still, it will be nice for everyone to be out of the woods. When somebody manages to locate the compass.
Business Day 29/11/11
Some time ago, hoping to escape the weekly grind of Tatler production with a promising new career on Broadway, we flighted a set of lyrics to the effect that SAB would be taking over Foster’s, proposing that they be sung to the tune of a well-known Antipodean folk tune. While critically acclaimed, the work was met with a resounding and disheartening silence from you, our readers, so here’s the lowdown, in the more conventional format you sturdy industry types seem to prefer: Foster’s shareholders have almost unequivocally approved a multi-billion-dollar takeover offer by SABMiller, which will see ownership of that beloved national institution falling into foreign hands for the first time in 150 years. Next step: off to the Supreme Court of Victoria state, which will consider the transaction on Friday.
Comment: Ja but you still stole the World Cup from us, or something.
Things aren’t looking up on the inflation front. Except of course, in a sense they are. A worrying set of factors could see food inflation edging closer to the 11% mark than the 8% currently forecast by shifty-eyed economists, viz, mainly, the 80-90% increase in the price of white and yellow maize over the past year, the 30% increase in fuel in the last year, recent cuts notwithstanding, and the growing weakness of the dear old ZAR, currently messing about at the R8.05/$ level, with which we purchase our imported yellow maize, can you see where this is going? And while inflation favours retailers, as we all know, a vast underclass of poor people who can’t afford anything in inflationary times doesn’t favour anyone. That said, inflation is currently expected to hit around 5.2% in the final quarter of this year and peak at around 6.3% in the first quarter of 2012, but with things the way they are globally, don’t bet on it. Comment: Hell, this is complicated. But suggestive of a wait and see approach, if that isn’t too much of a cop-out.
Finweek 03/12/11, FM 02/1/11
The good fellas over at Imperial Logistics, in partnership with global non-profit organisation, Stop Hunger Now, last week packed 40,000 meals for distribution to early childhood development centres in and around the Group’s Germiston-based Head Office. Stop Hunger Now has been working towards ending hunger for 13 years, providing more than $70 million dollars worth of direct aid and 34 million meals to 72 countries.
Tatler Reporter 06/11/12
In a great leap forward for the wine-cooler-related lifestyle, KWV has released its first ready to drink. It goes by the uproarious and innuendo-friendly name of jimmijagga and comes in a heady range of lemon, melon and plum flavours mixed with wines of various colours and we assume vintages.
Tatler Reporter 01/12/11
You were wondering, were you not, as your planning for the FY13 gathers pace, where you could get hold of a copy of the latest Executive Summary of our Trade Profiles. Wonder no more. You can get it here on our website, which also provides a vast range of other resources invaluable to anyone doing business within the South African consumer goods retail and wholesale sector.
Tatler Reporter 08/12/11
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