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:     20 Jan - 26 Jan

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Shoprite  Red and white and black all over

Hot on the heels of Massmart last week, Shoprite have weighed right in with a six-month trading update of their own, and once again our bloed is rooi, manne. Turnover up 13.2% to R41,1bn, or 8% on a like-store basis, with sales up 12.3% in their South African supermarkets where internal food inflation was ticking over at a comfortable 5% compared with the national figure of 9%. Outside South Africa, and somewhat buoyed by the poorliness of the dear old ZAR, sales grew at a continent-busting 21.2%, or 16.9% on a constant-currency basis. Our Uncle Sydney over at Nedcor Securities reckons The Big Red One’s strong performance in food was assisted somewhat by our recent belt-tightening tendencies, as we spent much of December cooking Checkers’ prizewinning boerie at home in the lapa rather than browsing off the SQ items at the local Ocean Basket.
Comment: Sometimes as an amusing intellectual exercise we try to come up with scenarios in which Shoprite’s trading updates wouldn’t be so bullish. For example – the entire population of South Africa gets brainwashed by a cheese-hating vegetarian cult.

Business Day 17/01/12

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26 January 2012 (04:14:29 PM)
An ever improving Supply Chain bears fruit.

Clicks  All the sixes, clickety click

Muscling in on the Shoprite / Massmart action, Clicks have also issued a trading update, this time an 18-week one. Turnover for Clicks itself up 8.1%, or 4.2% on a like-store basis at a tough time, particularly in prescription medications which were in deflationary mode for the period, assisted in their decline no doubt by the government’s single-exit-pricing policy which we have been banging on about since we chipped the first Tatler out of a slab of solid granite in the year dot. Sales for Musica – yawn – were down 5.2%, while the Body Shop, home of surprisingly affordable indulgence and welcome xmas goodies grew sales 10.1%. And UPD was up 3.6%, doing nicely out of generics. Sales for the group then – wait for it, wait for it – up 4.9% to R5.3billion.
Comment: A solid business, but tough times. It’s all there in the numbers.

Business Day 17/01/12

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Woolworths  Would sir like a slice of lemon with that?

Did we mention that there were some trading updates in the offing? Woolies now, delivered in measured tones in an expensively-carpeted room at a discreet boutique hotel we think you’re familiar with. Sales for the 26 weeks to Christmas Day up 11.4%, or 8.4% on a like-store basis. Interestingly, clothing and food were one a par for once, with clothing up 11.2% and food up 11.7%. GM is still lagging somewhat, growing only 6.2%, with much of that happening in the run-up towards Christmas. Woolies’ performance and general outlook saw earnings and headline earnings per share up a record 30-35% for the same period. On the downside, the Australian Country Road division remains a bit of a blighter, with sales down 2.8%. The franchise buyback is cracking on nicely though, with 50 stores now converted, 8 still to come and 17 which will remain in the hands of eager franchisees.
Comment: We hope you bought some Woolies back when we told you to...

IOL 17/01/12

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BiC  Pen/Sword/CSI

BiC, as you may or may not know, leads the disposable writing instruments markets with 52%. Time, they believe, to give something back. This is why they are donating over a million pens to disadvantaged schoolchildren around the country under their Choose BiC and Change a Future campaign. Over 20 BiC products bear the relevant sticker, and when one of these is bought, BiC will donate a pen to a needy child, through the READ Educational Trust in some of its 200,000 project schools, so it should provide a nice little kicker for sales too. Many of SA’s 12 million learners currently lack the most basic of resources, including pens with which to record their learnings.
Comment: Nice work, BiC – a campaign through which a major manufacturer is discovering its soul.

Tatler Reporter 25/01/12

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SAB  Have you tried this “beer” stuff yet?

They’ve been quaffing beer in Africa and Latin America these past, hot three months, which has led SABMiller’s sales volumes to rise by 3%, compensating for declines in North America and Europe, where it has been colder, and where, of course, there are far more independently owned and local breweries. Although in fairness The Big Feller is less exposed as it were in these markets than competitors Anheuser-Busch InBev, Heineken and Carlsberg, making 70% of its profits in emerging markets. Getting into the specifics – Africa up 11%, Latin America up 8%, Asia Pacific up 7%, Europe down 2% and the Miller Coors JV in the US of A down 3.3%. Back home in the S of A, volumes were flattish at 2%.
Comment: And with the purchase of Castel’s assets in Africa now open for discussion, at least by SAB, emerging markets will hot up even further.

Fin 24 19/01/12

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Retail Trade Sales  We give up … how much did we make last month?

Retail trade sales for the month of November were up 6.8% year on year, confounding a little bit the predictions of analysts who were expecting something more along the lines of 7.5%, its October level. The big performers for the month were “Retailers in Hardware, Paint and Glass”, “Retailers in Household Furniture, Appliances and Equipment” and “Retailers in Textiles, Clothing, Footwear and Leather Goods.” “Retailers in Saddlery, Coaches and Gentlemen’s Snuff Boxes” didn’t get a look in. The position for the retailers we know and love is similarly opaque – StatsSA’s classifications are infamously deurmekaar.
Comment: What seems likely however is that the lower than expected figure should incline the Reserve Bank favourably toward unchanged interest rates in its forthcoming deliberations.

All Africa 18/01/12

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E-tolling  A bad idea whose time may yet come

The Consumer Goods Council of South Africa (CGCSA) is among those stakeholders which has welcome the decision by SANRAL to postpone the implementation of e-tolling in Gauteng until further notice – and with tarriffs for a medium truck set at R1/km and heavier vehicles at R2/km, this is a sentiment many in our grand old industry will surely echo. And apart from the increased costs of haulage, there will also be the depressing effect on disposable income in Gauteng and thus on consumer spending. There’s a bit of a qualifier, though: “The CGCSA is in full support of SANRAL’s objectives to create better integration and reliability of public transport as well as improving the coverage and accessibility of the network. The CGCSA urges SANRAL in light of the outlined objectives to find cost effective and sustainable solutions to the E-Tolling system through broad consultation with key stakeholders.”
Comment: Which seems fair...

BizCommunity 16/01/12

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26 January 2012 (04:29:14 PM)
Why a multi billion deal with Austrians? Scratch a little you'll find SANRAL "suspect" shall we say? To put it nicely!

Corn  Oh, hell

Two years ago, South Africa had a record corn surplus. So what did we do? Got rid of it, apparently. After the biggest crop in almost thirty years, farm bodies such as Grain SA, pushed the government into helping find new corn markets ranging from South Korea to Italy and Mexico, and the dear old govt. obliged. Fast forward to these more straitened times, agriculturally speaking, and the silos are almost empty. Producers of poultry and livestock are facing ruinously high prices for fodder, and food inflation could start pushing upwards from November’s 11.1%. The country will now have to import 700,000 tons of maize between now and June.
Comment: A blunder which as usual will be felt worst in the poorest communities. The last time food inflation spiked it coincided, if that’s the word, with an explosion of xenophobic violence among desperate people.

Bloomberg 20/01/12

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Pick n Pay  It’s all about the kerching, kerching

Pick n Pay have got into the money-transfer game, partnering with BankservAfrica to enable unbanked customers to transfer money to each other. The Money Transfer System (MTS) was launched in 550 Pick n Pays and Boxers in October and has been growing at 20% every month since. It’s currently the cheapest way of sending money home in the RS of A in keeping with The Big Blue’s present modus of doing it late but doing it well.

CBN 19/01/12

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Tiger Brands  You think to defy me, Superman?

Lex van Vught is stepping down from his role as director (since 2003) and chairman (since 2006) of Tiger Brands, presumably to pursue a career in superhero villainy. He will be replaced by André Parker, a director of the business since 2007, and onetime MD for Asia and Africa of a crowd called SABMiller.

Tatler Reporter 18/01/12

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Rooibos  Next: Scented candles

The South African Rooibos Council has set aside R2million for research which it hopes will scientifically showcase the reputed soothing, disease-prevention and weight loss properties of the twiggy beverage.

The Times 25/01/12

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