Trade Tatler
“Buying the right computer and getting it to work properly is no more complicated than building a nuclear reactor from wristwatch parts in a darkened room using only your teeth.”
Dave Barry



THIS ISSUE:     13 Jan - 19 Jan

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Pick n Pay  Oh what the heck. We’ll take two

Still casting about for ways to spend their R1.4billion Aussie windfall, Pick n Pay have gone to Europe on a shopping spree and come back with a shiny new Merchandise Director. Helmut Hoerz, previously inter alia COO at German supermarket co-op Edeka AG, where he was in charge of global sourcing, will also run merchandising in the GM category while imparting of his knowledge to recently-named Food Merchandise Director Peter Arnold and the rest of the team. A major part of the excitement for the usually unflappable Mr Badminton is Herr Hoerz’s experience in the area of Category Management, which is a major focus of The Big Blue’s drive to transform the business. Also salient is his stint at Metro subsidiary Extra, where he successfully merged eight supermarket companies into one successful chain and halted declining sales, centralising administrative functions and standardising IT systems.
Comment: There was a time not so very long ago when ignoring our detractors we said the Pick n Pay share might be worth a flutter...

Tatler Reporter 15/01/12

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19 January 2012 (09:10:23 PM)
They didn't listen to Tesco's Knickel, why should they listen to Hoerz.

Massmart  Saving you money so we can live better

“Research has established” is a phrase we like to throw around at dinner parties. It’s basically unplayable, and it drives the wife mad. But in this instance, research really has established that 76% of consumers believe that the arrival of Walmart on these eager shores will bring down food prices generally. Another group of fans are to be found among the ranks of the shareholders, who bought Massmart hand over fist on last week’s 26-week trading update (turnover up 15% to R31.6billion etc), driving the stock to a 12-year record of R182 per, having climbed consistently for seven full days. One punter stroking a thoughtful chin, however, is the Public Investment Corporation, distributor of government pension funds and ironically Massmart’s biggest South African shareholder, which said that it would “increase its engagement” with the Men in Black if it found evidence that they were adopting Walmart practices that are in contravention of the UN Compact for responsible investing.
Comment: Ooh, scary. “Increase its engagement.” Oooooh.

Business Day 11/01/12, Business Week 11/01/12

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Online Retail  Click, click. Ching, ching.

Sears and Kmart. Borders. Filene’s Basement. Circuit City. The grim rollcall of names of American businesses put out of, well, business by a killer combo of the Great Repression and the rise – 15% in 2009 – of online retail. In South Africa, a less mature market, this rise is nothing short of vertical: 30% in 2011, for a total of R2,6billion – a .36% drop in the ocean of SA’s total retail spend of R561billion, but are you saying you’d rather not have some of that? According to online guru (his shirts don’t have collars, that’s how much of a guru he is) Arthur Goldstuck, this is partially because many of SA’s web users have been online for five years plus and are itching to spend, and also because so many websites have made it so much easier for them to do so.
Comment: Now, logistics providers, if you could just get our delivery times down to something a little more dare we say first world, there may be something in it for you.

Business Day 09/01/12

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SAB  Romuald et Juliet

This may not come as a surprise to afficionados of European art cinema, but SABMiller has a complex relationship with French brewing giant Castel. For starters, they’re both married. And SABMiller has a 20% shareholding in most of Castel’s African beverage interests and Castel has a 38% shareholding in SABMiller’s principal African holding company. Most, because now the odd couple have decided to combine their Angolan and Nigerian holdings in the most, how you say, egalitarian way possible: with the Nigerian businesses being managed in future by SABMiller, and the Angolan businesses being managed by Castel. The businesses will share the aggregate profits and cash flows of their operations in Nigeria and Angola based primarily on the relative contributions of their businesses in each country. In Nigeria the businesses are of about the same size, whereas in Angola, Castel is triple the size of The Big Feller. Continentally speaking, it’s a different story: Castel is worth around $75million, whereas SABMiller’s gross assets add up to over $900million.
Comment: They have managed to divvy up the Motherland complementarily rather than competitively, hence the fit.

BizCommunity 11/01/12

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Malls  The malls have years

According to a report by the South African Property Owner’s Association (SAPOA), there is a slight but ongoing decline in the number of people frequenting shopping centres, although where they might be going instead is presently unclear. The good news, though, is that average per capita spending is up, which has supported average trading density and turnover growth relative to the historical average particularly in the smaller malls – an improvement on the numbers for 2010, when growth in per capita spend lagged inflation. This growth in per capita spend tracks the national growth in disposable income, hitting 5% for the first half of 2011. A caveat, if that’s the word, means that while a low interest rate means that debt is easier to service, South Africans are still, commendably, attempting to bring their levels of household debt down, which has led per capita spending to increase less rapidly than some economists have predicted.
Comment: You got that? Good.

BizCommunity 30/12/11

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Frankies  We’ll have what they’re having. Or something like it.

Surprise, surprise, but as we kind of predicted last week, Frankies Old Fashioned Beverages’ very public complaint to the ASA that Woolies is muscling in on its whole original branding thing has paid off with a boost in sales for the month of December. For our part, we believe that Julia Donaldson’s children’s classic “The Gruffalo” bears a suspicious resemblance to our own 2006 sleeper hit* “Uncle James and the Delicious Monster.”

*It’s still sleeping

BizCommunity 09/01/12

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Pick n Pay  Don’t have a cow, man

And in one of those “Legends of African Retailing” stories, The Big Blue has presented cattle carcasses to a number of lucky customers who entered the festive “Win a Cow” promotion in its four Swaziland stores.

Observer 12/01/12

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