School of Retail
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THIS ISSUE: 21 Jun - 28 Jun
We suspect that the big stories about Shoprite are all going to be coming to us via the crocodile-infested Limpopo for the forseeable future. With its strategies and its operations all nailed down and ticking over nicely back home, Africa is where it’s all happening for the Big Red One. Thus it was this week, with the Abuja store in Nigeria up and running, and locals commenting excitably that it has done wonders for both the commercial and social life of the old place already. And the opening of the first store by a South African retailer in the DRC – the store in Gombe, Kinshasa offers all the usual plus a bakery, a butchery with local meats, a full deli a large selection of wines and beers, and as an added attraction, employment for 200 local worthies. Finally, in the Namibian town of Otjiwarongo, which the hoary elders among you may recall featuring more ominously in news reports in the early 1980s, the Shoprite Centre has just been upgraded for a princely N$49million.
Comment: Rhodes himself would have been proud.
Tatler Reporter 19/06/12, All Africa 22/06/12
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Chairman Ackerman the Younger has just been named as one of the two co-chairs of global industry body The Consumer Goods Forum. His opposite number, or oppo, is a Mr Muhtar Kent, chairman and CEO of The Coca-Cola Company, and it will be their task to drive cross-industry collaborative action on sustainability, consumer health and wellness, and food safety, inter alia. Mr A. the Y. is likely to have a fairly busy time of it in the months ahead, doing the Chairman and CEO thing as a suitable replacement for Nick Badminton is yet to be found, opening stores all over the show including its first Zimbabwean Pick n Pay branded one in Kamfinsa in eastern Harare, which includes standalone PnP Liquor and Clothing shops also, and explaining to shareholders about the ongoing decline in the shareprice (to the tune of 6% this year) even as rivals Shoprite and Woolies grow in this area.
Comment: A big announcement about a high-profile appointment at the helm might go some distance towards arresting the current slump in sentiment about the Group.
Tatler Reporter 25/06/12
As you will no doubt recall, revenue over at the dapper one was up 11.1% to R14.2bn in the half-year ended February and operating profit was 27.8% higher at R1.4bn. A small but significant chunk of this may be attributed to Woolies’ sustainability initiatives, which have saved the company R80million since 2007, and they’re looking to save a further R100mill by 2015. The biggest saving has been in the area of energy use, where Woolies has managed an almost 23% reduction in relative energy use from their 2004 benchmark – and this despite energy price increases of between 16% and 25% per annum. This is highly commendable for both the bottom line and the environment. But the humbling part, speaking of the dear old environment, is that the environmental costs of doing business are currently doubling every 14 years.
Comment: Still, every bit counts, especially in these days of post-Rio ennui and dread.
Business Day 20/06/12
If you have been privileged, as we have from time to time, to walk the marbled halls of Unilever’s secret bunker, you will know that Le Grand Bleu takes research very, very seriously. There are white coats, experimental kitchens, experimental hair salons and particle beam accelerators around every corner. So it’s no surprise that with the government threatening legislation to reduce our salt intake, Unilever has assembled focus groups to test the consumer’s attitude to the chemical we wits in the upper fifth used to refer to as NaCl. And predictably, it’s not a pretty picture – fully 20% of them reach for the shaker before they’ve even tasted the food. Five years ago, punters rejected as insufficiently robust a lower-salt stock cube that had blind-tested perfectly adequately. The government may have a point – most South Africans consume more than twice their recommended daily dose of salt, with the state picking up the tab for the fallout in heart disease and strokes.
Comment: And when that point becomes law, Unilever will no doubt be ready for it.
Business Day 19/06/12
“An African has to work three hours on average to afford a beer, compared with 12 minutes for a European,” according to our friends over at News 24, and that seems like an awfully reasonable price to pay for a European … what? Oh dear, yes … unfortunate misunderstanding. The good news, if you’re SABMiller, is that we Africans are more than happy to put in those hours, which is why the continent is growing at such a pleasingly cracking pace for the Big Feller, which is building new breweries in Nigeria, Uganda and Zambia this year and refurbing a whole bunch of others in the face of volume growth of 10% per annum. Interestingly, SAB’s stiffest competition on the continent comes not from those fancy Europeans with their sophisticated green bottles and clever advertisements, but from the old ladies who continue to make beer from yams and madumbes, and who sell three times the volume that corporate brewers do.
Comment: And yet which never gets a look in at the artisanal brew pubs we have been known to frequent in our more pretentious moments.
Fin 24 19/06/12
Social Development Minister Bathabile Dlamini has announced that the bill for restrictions on liquor advertising that she will be ushering into Cabinet before the end of the year will be accompanied by another one raising the drinking age from 18 to 21. Together, the two could have serious consequences for the industry, and for related industries. According to advertising greybeard Chris Moerdyk, the media industry alone could lose revenues of R2billion per annum, as well as 2,500 jobs, although admittedly he has not worked in an actual agency since David Ogilvy was a tea boy. This, says Ms Dlamini, is as nothing to the social costs of the hot stuff, which she describes as “the most common primary drug of choice across the country (which) results in a burden of risks including accidents, injuries, teenaged pregnancies as well as unprotected sexual behaviour which leads to HIV transmission.”
Comment: Difficult to argue with that. Although bans of the sale or marketing of alcohol and other drugs have a proud and colourful history of not working.
Anglovaal Industries – we love saying that, it takes us back to the long bar at the Illovo Club, before the fire – maker of tea and biscuits, lover of quality footwear if you know what we mean and we think you do, has mentioned that consolidated headline earnings per share are likely to increase by between 24% and 31% YOY for the year ending June 30. Which will be nice.
At 50 billion litres a year, the Chinese are hands-down winners in the Beer Olympics, with nearest rivals the US coming in at less than half that. And here, according to the nosy fellers over at Mintel, are the reasons the Chinese avail themselves of the bubbling, amber stuff:
Socialising with friends or family – 73%
When eating at banquets or parties – 62%
Entertaining guests at home – 61%
Accompanying a meal – 44%
Socialising with people after work – 43%
To wind down after work – 33%
After playing sports – 9%
Remembering suddenly that they live in China – 98%
Tatler Reporter 26/06/12
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