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

TATLER ARCHIVE

 

THIS ISSUE:     02 Mar - 07 Mar

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Massmart  All rise...

One assumes that Massmart are fairly confident of the outcome of this week’s decision by Judge Dennis Davis regarding the appeal by the Departments of Economic Development, Trade and Industry, and Agriculture, Forestry, and Fisheries against the Wakro merger. The Departments wish the transaction sent back to the three betoga’d patricians of the Competition Tribunal for reassessment. They reckon the Tribunal hasn’t inspected in enough detail the benefits or otherwise of the merger vis-à-vis job creation and small local suppliers, and quite frankly are looking for a different answer to the one given. SACCAWU, in the meantime, filed a separate appeal to the effect that the decision failed to sufficiently take into account something known as “the public interest”. They would like the mooted Supplier Development Fund to be increased to R500 bar.
Comment: Whichever way the judgement goes, we at the Tatler confidently predict that it will be delivered in a genial and avuncular fashion.

IOL 29/02/12

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Woolworths  The Optimisatornatorotron

Hold onto your hard drive, we’re going to get a little technical here. Woolies are upgrading their IT systems and strategies, and have gone with long-time partner JDA who are assisting them with a bunch of systems, and we quote, which are aimed at helping to “increase demand visibility across the entire trading network, identify consumer preferences, and optimise assortment, merchandising and pricing processes with the aim of improving sales and customer satisfaction”, specifically across the food business. The implementation will take place over the next three years, and includes solutions for demand, fulfilment, channel clustering, assortment optimisation, planogram generation, shelf price optimisation, promotion optimisation and markdown optimisation.
Comment: Oh, come on. That wasn’t so bad.

Tatler Reporter 04/03/12

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Developments  Can we fix it?

It’s a slow news week when we give Bob the Builder a look in, but in this instance the retail developments in question are of some significance, so here goes. First up, Pick n Pay who flushed with the success of Posh Store on Nicol are partnering with Atterbury to open another green supermarket, this time on the site of the driving range on Hendrik Potgieter in Roodepoort. The Falls Pick n Pay will feature exceptional fresh foods, more imported lines than any other Pick n Pay and specialist ranges unique to flagship stores, a restaurant, liquor store, wine boutique and cheese room, you name it. Next up Makro, who are for the first time dipping their toe into the bracing waters of the Free State with a brand new Makro, at the junction of the N1 and the N8 in western Bloemfontein, in partnership with the Moolman Group and Nedbank Corporate Property Finance, which is putting up the R170 large for the project, which when complete will attract shoppers from all over the province and from Lesotho. Finally, Boxer will be the anchor tenant for an eight-store mall being developed by Imperium in Duncan Village, previously unserviced with respect to modern retail, in the Eastern Cape, a Boxer stronghold.
Comment: As we observed recently, if the measure of a nation’s health is the strength of its retail sector...

Tatler Reporter 06/03/12

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MANUFACTURERS AND SERVICE PROVIDERS

Barloworld Logistics  Relevance 99% Readability 97% Punctuation 0%

Our friends over at Barloworld Logistics have just published the results of their 9th annual supplychainforesight survey, and it’s a sobering read this time around. Themed “Growth, Competitiveness and the Africa Question”, it picks up, inter alia, on one of the themes we addressed in these pages last week, namely the tenuous position of South Africa as the logistics gateway to the continent, and the need for South African institutions and businesses to become more competitive in Africa. A feature of this year’s report is the detail into which it goes on the strategies and performance of individual businesses in the context of the South African and the broader African environments – inter much, much alia. On the upside, it asked top businesses across various relevant sectors about potential drivers for competitiveness – like capacity for innovation, professional management, adoption of best practices and access to technology. To name the top four. Of note to our industry is the ranking of sectors in competitiveness, with FMCG coming in 6th at 51% and retail in 9th grinding in halfway down the rankings with a less than inspiring 44%.
Comment: Criticalreadingforyouandyourteam, availableright here.

Tatler Reporter 05/03/12

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Nestlé  Cash, chaos and creamer

What’s the world’s biggest consumer goods business up to in Nigeria, you ask, and we’ll tell you. Spending more cash to boost the output of its key brands for sale into Africa’s second biggest market, that’s what. Since 2003, they’ve spent $445million on capacity, opening a second plant there last year, and have another $91million to spend this year. The large, creamy one has mentioned recently that it could double the size of its business in three years, putting it within scratching distance of its South African business, which sales are currently worth around a billion US although more precisely measured in Swiss francs. Maggi, Milo and Golden Morn cereal, Nestlé’s top performing brands up there, will be the focus for growth, although a significant part of its current strength is that the business is still big into base food products, and is thus going into everyone’s meals morning, noon and night.
Comment: Comment: Nestlé, Nigeria, a heady brew. With some delicious creamer added, obviously.

Bloomberg 28/02/12

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Afgri  Down on the farm

Who would be an agricultural services group, eh? Not us, whose honest crust remains substantially independent of the vagaries of harvests, plantings and the weather. Look at Afgri: the farmers stop planting mealies, and there go your headline earnings, to the tune of 17% for the six months to December 2011. The reduced planting, after four years of large crops, reduced demand for Afgri products like seeds and fertiliser, and also for services like storage and silo services. Farmers have also been spending less on capital equipment, another Afgri division. However, international prices of commodities, including grain and food in general began to recover in early 2011, helping grow revenue 27% to R4.4billion for the period.
Comment: Happily, this recovery should encourage farmers to plant more this year, putting Afgri once again in the seat of the tractor and surveying with pleasurable anticipation the rolling golden acres.

Business Day 07/09/11, Business Live 29/02/12

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Risk  Turns out Africa is for cissies

And you thought our retailers were heading into Africa to explore bold new horizons where the trolleys are made of gold and oil millionaires are queuing up to acquire packaged consumer products. Wrong, according to insurance group Marsh Africa, or partially anyway. They’re fleeing there from the risks associated with intensifying competition back home – competition which has led them in complex new directions like financial services, logistics and the partial manufacture of imported white goods to reduce costs. All of these activities come with a profile of risk to which retailers are as yet unaccustomed, apparently. And then there’s the minefield of legislation – not just the Consumer Protection Act, but now, since retailers are selling insurance and the like, the Financial Advisory Services Act (FAIS).
Comment: And to mitigate all this new risk, you need a good broker. Someone, perhaps, like Marsh...

BizCommunity 28/02/12

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SABMiller  Suits you, sir

The Big Feller has been ranked as number 1 in an IDEAL (caps theirs) place to work survey conducted among 11,700 professionals and MBAs by independent employer research company, Magnet Communications. This as SAB rival (when it comes to IDEAL workplace conditions for energetic young people in W Collection suits) Sasol points out is a big deal in an age where the competition over suitably qualified suits is intense.

Supermarket.co.za 27/02/12

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Economic Growth  Hold onto your walking frames

According to a Reuters poll, SA’s rate of economic growth “quickened” in the fourth quarter of 2011 to a chassis-bending 3.1%, for an annual 2.6%. Consumer spending has played its part, so too has government spending, public sector salary levels and the slow but inevitable rise of the middle class. Fixed investment remains sadly out of the equation.

Fin 24 29/02/12

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Brandy Wands  Don’t Shoot the Messenger

We’re just reporting here: According to Brand Republic.com “Only 5% of British people would care if brands did not exist, according to research by Havas and MPG. The agency’s head of strategy Kate Cox said although people in the UK believe retail has a significant impact on their quality of life, most retailers are not seen as contributing to ‘personal wellbeing’.” Oh, hell.

Brand Republic 05/03/12

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