School of Retail
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THIS ISSUE: 05 Apr - 12 Apr
Massmart have appointed a heavy hitter as their candidate for the panel which has been tasked by the Competition Appeals Court with identifying how local South African suppliers can be assisted in order to benefit from the Wakro deal. One-time Marxist and touch-rugby dangerman Professor Mike Morris, who has been prominent for his commentary on the travails of the garment industry, is founder and head of Policy Research in International Services and Manufacturing (PRISM) at the School of Economics at the University of Cape Town. In other competition-related news, Massmart have received unexpected support from a man who once headed up the Competition Tribunal and now leads Cosatu’s corruption watch. David Lewis has argued that Economic Development Minister Ebrahim Patel is an “activist, interventionist and micromanaging minister” who uses the competition authorities to leverage concessions out of international investors.
Comment: PRISM. Now there’s an acronym. “You leave us no choice but to call in the Man from PRISM.”
Business Day 05/04/12, Tatler Reporter 10/04/12
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Pick n Pay have begun the pre-results tap-dance which leads to a less than entirely satisfactory set of numbers come opening night, or in this case morning, scheduled for the 18th of April. Headline Earnings per Shares – or HEPS – from continuing and total operations will decrease by between 10 and 20% for the full year, with the profitable sale of Franklins (to the tune of R438.4 million) pulling things up by the bootstraps somewhat in the second half. Turnover-wise, they’re anticipating growth for the year of 8.1% compared with 8.7% for the six months ended Feb with promising like-store growth, although EBITDA from continuing operations will decrease by up to 10%, driven southward by the upfront launch costs of Smart Shopper, the implementation of specialist category buying and the continued investment in the centralised distribution system.
Comment: All of which, they assure punters, will improve future operating efficiencies and help serve customers better.
*Hold On To Your Acronyms!
I-Net Bridge 02/04/12
In a flabbergasting strategic about-turn, Unilever is shifting its focus of the past few years from developing markets to aspiring markets. Previously, you will recall, Le Grand Bleu was targeting emerging markets for growth … sorry, what? Oh yes, now that you mention it there does seem to be a passing resemblance. It turns out that markets may develop, emerge and aspire simultaneously. What’s new for U, however, as pointed out in a press briefing by global CEO Paul Polman in Jhb recently, is that they’re bringing their sustainable living plan into the supplier network, sourcing agricultural raw materials from 500,000 small suppliers globally, and have committed Eur200million to helping these suppliers deal with the fluctuations in price as a result of flooding and drought.
Comment: Still treading the doing good is good for business path, then, and trying to keep it from leading them through any rainforests also.
Business Report 10/04/12
HETTIE12 April 2012 (09:27:09 PM)this is good news for the people need to help our people in need
In mid-February, international butter prices went up to R32.80 a kilo from R29.60, and things aren’t going to get any smoother anytime soon. Why is this? Depends on who you ask. Clover, which buys about 27% of all raw milk in South Africa and sells 85% of its butter to the big retailers, says that the drop in the supply of raw milk is to blame. The smaller milk producers, some of whom believe that Clover is gearing towards an acquisition spree in their ranks, maintain that they cannot afford to produce milk for the prices offered by the big dairy houses. And if you ask the global markets, they scratch their heads and don’t know what you’re on about – globally, prices are set to fall in the near future as the shortage of butter fat eases.
Comment: A riddle wrapped in an enigma and buried in 500 smooth-spreading grams of nature’s answer to what should we put on the toast this morning.
L’Oréal began the decade with 1.2billion customers globally, and are seeking to end it with as many as twice that. And unsurprisingly, they are looking to make up these numbers from markets variously known as “emerging”, “developing” and “aspiring”, mainly in Africa and the Middle East, which regions offer the happy convergence, if you happen to be a cosmetic producer, of an emerging middle class and climates which play merry hell with the old epidermis. Africa’s cosmetics users, by L’Oréal’s reckoning, should double if the next decade of the continent’s economic growth holds firm at 5-ish%, and it is the redoubtable French company’s ambition to become a leader on the continent where it is currently a “challenger”, 16% being the market share they are targeting. On the cards for South Africa is a chain of outlets stocking the premium Kiehl’s brand.
Comment: Exciting times, even for a business which has known its share of excitement in recent years.
Global food price inflation is back, according to the United Nations’ Food and Agriculture Organisation. Prices rose in March for the third successive month, driven by increases in the costs of grains and vegetable oils. The rising price of petroleum is another contributor, with food tracking oil closely. Inflation in the Eurozone was up 2.6% year- on-year in March, despite the slowing economies of that picturesque region. And on the wheat front, while 2011 produced a record crop, the FAO predicts that output will fall 1.4% this year. The good news is that with new crops of staples like soybeans coming onto the market, prices could fall in the second half of the year. The bad news is that if they don’t, food inflation in an already stretched global economy could bring its fresh crop of social discontent.
Comment: An author of whom we are fond once said, not necessarily with complete originality, that civilization is only two meals thick.
The Big Blue has once again proved its green credentials by pipping all comers in the Private Sector Retail Category of the Climate Change Leadership Awards held at a reportedly carbon-neutral event in the otherwise carbon-positive town of Johannesburg recently. The award recognised the retailer, inter alia, for its work in climate change education and awareness, through the Pick n Pay Schools Club, which reaches 1.5million learners annually, and at store level.
Tatler Reporter 05/04/12
Glenryck Pilchards owner Foodcorp is involved in a legal action with the Agriculture, Forestry and Fisheries Ministry, which it believes is placing undue emphasis on black ownership and management elements of the government’s empowerment requirements. The difficulty here is that the department could reduce Glenryck’s already fairly skimpy fisheries quota after the reduction of its empowerment shareholding, which went west when Pamodzi exited the business in 2010. That’s it in a nutshell, or indeed a sardine can.
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