School of Retail
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THIS ISSUE: 09 Dec - 14 Dec
Among the more than usually hallowed airconditioning ducts and gleaming rails of the refurbished Virgin Active in Constantia, Woolworths have opened their inaugural W café, a pilot store. For Virgin the synergies between the businesses revolve around their shared position on quality and their heritage as proudly South African businesses, as well as their need to offer a superior experience to their buff and picky punters. The usually not quite as pithy Zyda Rylands, MD of Woolworths Food, observed drily that the dapper one believes “there's a good fit between the brands, both focusing on helping South Africans to live a healthier lifestyle.” Fit, gettit? Comment: Job at Accenture? Check. Virgin Active membership? Check. Woolies Cappuccino? Check.
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They – or more accurately, we – don’t call them the Big Blue for nothing. Pick n Pay, having triumphed over small-mindedness in that benighted land mass due east of us, and made nice with SACCAWU to avoid job losses, has come through with a winner – pioneering the drive to sustainable fisheries in the retail space. It has become the first South African retailer to commit to transform its entire fresh, frozen and canned seafood operations by the end of 2015, by which time all seafood sold at Pick n Pay will be certified by the Marine Stewardship Council (MSC) for wild-caught products; certified by the Aquaculture Stewardship Council for farmed products; and categorised as “green” in terms of the WWF Sassi list. Green fish are considered the most sustainable choices, able to handle current fishing pressure, farmed in an environmentally sustainable manner and bought from fisheries with a good track record. Comment: Cue uplifting, electronic whale noise music.
Tatler Reporter 12/12/11
“Who?” you ask, as usual, and as usual you are wrong. Nakumatt, as regular readers will recall, is a growing Kenyan grocery retailer which is making impressive strides into East Africa, most recently into Tanzania where it has opened it first store, a useful mid-range $1.3million number serving the 150,000 souls in the leafy conurbation of Moshi, on the slopes of Kilimanjaro. Nakumatt now has 35 stores, trading in Kenya, Uganda, Rwanda and Tanzania and about to break ground in Burundi. Nakumatt 1.0 that is. Nakumatt 2.0 as envisaged will be a bolder animal altogether, with a transcontinental footprint, posing a greater threat to any South African businesses which may be trading in Africa.
Comment: Chains like Nakumatt and Botswana’s Choppies are the ones to watch in the next decade or so – and in the case of Choppies, the shares to buy if you’re up in Gabs and keen for a little flutter.
Black empowerment group Sekunjalo has just taken a R95million – or 13.5% – stake in Pioneer Foods – although to be fair, Sekunjalo are only paying for about 10% of that, with the rest of it coming from RMB and, er, Pioneer, and they’re getting it at a 5% discount, which seems, reading between the lines, like the right way to do business. The businesses are no strangers to each other – Sekunjalo chair Iqbal Survé has been a presumably respected member of the Pioneer board these how many years now, so there shouldn’t be any nasty surprises in the next seven years, seven years being the tie in period for the deal, which will see an eventual injection into the business of an additional R400million odd in cash as well.
Comment: Canny stuff all round then.
While you were getting a glass of milk in the kitchen and putting the cat out, Unilever has gone and erected a monstrous green savoury dry food plant at Riverhorse Valley*. The plant, called Idonsa, cost le Grand Bleu R670million to put up, will produce 65,000 tons per annum and eventually 100,000 of assorted Knorr, Robertsons, Knorrox and Rajah products inter alia, and could one day be Unilever’s biggest facility of this type globally. Now onto the green stuff: it uses 75% less water than similar plants and will be water-neutral, with even the condensation from the air conditioners being reused to clean toilets. The size of three soccer fields, it will use 50% less energy than similar plants through better lighting and insulation methods, and more efficient motors and air compressors.
Comment: And speaking of soccer fields, it is the biggest greenfields development in dear old Durban since the World Cup.
*A mixed-use commercial and industrial area behind Durban which we at the Tatler, or one of us, anyway, actually named, in a former life. We could have called it anything, we suppose – Elysium, Olympus, Avalon, Camelot or Valhalla, say – but oh, no, we called it Riverhorse Valley.
Tatler Reporter 11/12/11
Since their less than entirely happy acquisition of Cadbury’s last year, Kraft Foods have boosted their spending in India – including both capex and marketing – by around 70% in a bid to grow its sales of chocolate by 30%. The thinking is that chocolate is surprisinlyg resistant to the depredations of a shaky economy, and thus something you’d want to grow, and also that rivals like Nestlè, while coming nowhere close to Kraft’s 70% share of the market, might still need seeing off eventually. Developing markets are a biggie for Kraft, too, providing much of the growth for the business, and having grown fourfold since the year four. Comment: And if you can make it in India, the saying might well go, you don’t need to make it anywhere else.
The next time a shifty-eyed stranger comes up to you just as you’re finishing your ATM transaction and asks how much you have withdrawn, don’t be alarmed. Well, do, obviously, but for the metaphorical purposes of this story, it could be a researcher from Spark ATM Systems who have been measuring withdrawals from ATMs in the month of October and November, and whose Spark Cash Index is used as an indicator of Christmas sales to come. Withdrawals are up 2.18% year on year for November, and as the trend is generally upward this time of year, December sales should be good – although retail sales for October, according to StatSA, were down a natz.
In a deal that has been steeping for months – years even – like a pot of Tanganda tea, Pick n Pay’s increase of its stake in TM Supermarkets from 25 to 49% has been given the go ahead by the Zimbabwean Competition Authorities. It is our belief that Competition Authorities are among the only things able to survive a nuclear holocaust, and that in the aftermath, they will prevent the cockroaches and the economists from forming mergers above a certain scale.
Tatler Reporter 09/12/11
And it’s 55, do I hear 60, anyone, 60, the lady in the lilac Jackie O coat? 60, going once, the quiet gentleman in the bifocals at the back, no? 60 going twice and sold for 60 to the nice lady. Actually we weren’t there, so we don’t know, but we do know that Mr James W Basson of Shoprite stopped just shy of buying the Quoin Rock Winery and Manor Estate, previously property of dodgy geezer Dave King, on auction for R60million, stepping graciously aside to noted philanthropist Wendy Appelbaum, on the grounds that now wasn’t the right time. Another couple hundred bar in the package this year, then maybe?
The Sunday Times 11/12/11
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