School of Retail
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THIS ISSUE: 27 Apr - 04 May
In a quiet news week (unless you happen to be Walmart), and hot on the heels of the Pick n Pay results in which the Smart Shopper programme got a fair bit of exposure, Checkers has launched a PR blitz highlighting the R200million they claim to have saved shoppers so far this year. How’d they do that? Aggressive pricing, and by holding prices lower for longer across more products. And according to his Whiteness, there’s more: constantly improved business efficiencies, world class sourcing abilities, sophisticated information technology systems, centralised distribution with the biggest DCs in SA, which enable the suppression of those low prices for longer. And then, incidentally commenting on the possibility of a loyalty programme, Mr Basson mentioned that the costs of setting one up were significant, and he’d rather keep prices low (had he mentioned low prices?) rather than investing in one.
Comment: Aha! Ons het hulle nou!
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Anton04 May 2012 (01:07:07 PM)You dont need a loyalty program if your prices are consistantly lower than everyone elses. Somebody is paying for the loyalty program and its not the retailer.
For a business with such a cheeky and cheerful presence in the malls, Clicks have been off the radar for some time now. So we thought a little catch up might be in order. For starters, since we were on the subject of loyalty programmes, ClubCard members now total 3.4 million, generating more than three quarters of sales at Clicks and buying twice as much as non-members every trip. Then there’s pharmacy, which Clicks pioneered and which every other retailer has followed with varying degrees (Shoprite; Woolworths) of success. Clicks now own 13% share of the pharmacy market, and are looking to get that up to 30%. And they want similar growth from private label, which contributed 18.2% to turnover last year, and which they are wanting to up to 25%. And if you’re a punter, Clicks has provided you with a handsome 30.4% compound annual growth rate on distributions paid out over the past five years, lucky you.
Comment: A tidy business that has done well by sticking to the proverbial, and a nice little earner for shareholders.
Meyer Kahn, a one-time boytjie from Boksburg if the legends are true, is stepping down as Chairman of SABMiller and handing over to bright-eyed newcomer Graham Mackay, outgoing Chief Executive of – er SABMiller actually. While the received wisdom is that the chairman should be independent of the finaglings and shenanignas, if any, of the operations of the business, analysts believe that in the case of Mr Mackay, an exception should be made, citing his 34 years in the business, 13 of those as CEO. Current managing director of SABMiller Europe, Alan Clark is stepping into the position of Chief Operating Officer, and assuming an executive seat on the board, before stepping up to the big job in 2013. He will be replaced in Europe by a Mr Sue Clark, currently Director of Corporate Affairs, in the time-honoured SABMiller tradition of appointing only men into important positions.
Comment: Good luck boys. And well done Mr Kahn, sir.
nkosipeter04 May 2012 (01:52:00 PM)Meyer Kahn is actually the boytjie from Brits
Good work that massive multinational with the interestingly curly logo. Unilever first published their Sustainable Living Plan in November 2010, and in their recent update have pleasing progress to report – notably in the area of sustainable palm oil. They have announced that they will reach their target of 100% certified sustainable palm oil covered by Green Palm Certificates by the end of 2012, three years ahead of schedule, although they are quick to emphasise that this is only a start. Palm oil, you will recall, is typically grown in massive, monoculture plantations which have replaced the rainforest habitat of the world’s remaining orangutans and other endangered species, and is very tricky to source sustainably. Other wins for Le Grand Bleu are:
Tatler Reporter 30/04/12
Harsh times over at Astrapak, where turnover was up only 3.4% YOY for the year to February, coming in at R2.518billion, mainly as a result of inflation, while gross profit decreased by 4.9% to R515.8million. And if you’re looking for reasons, take your pick – a consumer economy still under pressure from the decession, industrial action across the packaging sector, the shaky supply of polymers which led to under-stocking and then over-stocking, and the cost of implementing the strategy to reduce their footprint in the Flexibles sector. But alles sal regkom, say management, who have promised to focus on asset utilisation, anticipating changes in the market conditions and the management of working capital in order to deliver the goods in FY13.
Comment: Against the backdrop, of course, of a market which remains challenging.
I-Net Bridge 25/04/12
The World Bank, which sits half a world away on the shores of the shallow, mosquito-ridden Potomac, has announced magisterially, as it does, that it’s not entirely happy with the way food prices are going, propelled ceilingward as they currently are by pricier petroleum, the insatiable appetites of Asian consumers and inclement weather in various agricultural centres. While not threatening the regime-toppling (or in our case, the neighbour-murdering) levels of 2008, they nevertheless bear watching, says the Bank – although it admits somewhat shiftily that it does not yet have a mechanism for the measurement of the onset of a crisis. (Hark – the marching feet of mechanism-weilding consultants). Back home, you will be pleased to know on a broadly related subject, the dear old PPI eased back to 7.2% year-on-year in March, suppressed (that word again) by lower commodity prices.
*If you remember this, perhaps it’s time you retired...
Comment: A bit of a contradiction there, then. And contradictions in a globalised world have a nasty way of resolving themselves.
Fin 24 26/04/12, 30/04/12
No, really. In order to differentiate Taste Magazine from all the other glossy temptations lining the snake down at your local Woolies, they’ve gone and made this month’s cover cinnamon-scented. This is what in magazine publishing terms is known as “a revolution”, and might in unkinder quarters be known as “a gimmick”.
Reckon that little outfit, watsitsname, Shoprite might be worth a flutter? Just ask a Mr C. Wiese, who we are told plans to fork out another R13.4m of his own (in fresh, crisp bills just out of the suitcase on the BA flight) on Shoprite stock.
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