School of Retail
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THIS ISSUE: 20 Jul - 25 Jul
Our Uncle Sydney, and several other analysts besides, have expressed disappointment in last week’s Shoprite trading update, when the big Red One announced that they expected turnover to grow 14.4% to R82.7bn in the year to June, while growth on a like-store basis was 8.5%. This muted growth, they speculate, stretching things somewhat to fit a pre-determined Red vs Blue narrative, may indicate that Pick n Pay have arrested the decline of their market share and are making inroads into Shoprite’s value-conscious shopper base. Punters, buying the narrative in the absence of anything else to get exercised about, have sold some of their shares, which has declined in value to the tune of 11%.
Business Day 18/07/12
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Imagine Shoprite’s embarrassment when one of the Woman of the Year winners was revealed as a man, a Mr Desmond Tutu of Bishopscourt, Cape Town. The Arch received the annual Shoprite Checkers Women of the Year Lifetime Achievement Award, joining on the podium Shéri Brynard (Youth Mover Award), Nyeleti Mushwana (Socio-Economic Business Developers), Margi Biggs (Good Neighbours Against Crime), Tina Botha (Health Care-Givers) and Marisa van der Merwe (Educators). Nice one, ladies. And clergymen.
Tatler Reporter 23/07/12
FNB cheque account holders will now be able to draw cash from tillpoints in Shoprite and Pick n Pay stores at a rate of 90c per R500 bucks compared with the frankly usurious R6 you have to fork over at ATMs. The idea is to cut down foot traffic at the branches, while for the retailers, presumably, it is to increase foot traffic in the stores.
Fin 24 20/07/12
Look, OK, it’s a drop in the proverbial, but South Africa leads the developing world in sales of Fairtrade products which have increased from R18.4m in 2010 to R73.2m in 2011, indicating A – that people care enough about the environment and other people to make the choice and B – that some sort of critical mass is probably being achieved in Fairtrade products on the shelf. Wine and coffee are the biggest cellars, although Cadbury’s popular Dairy Milk slab is now a Fairtrade product, which must surely contribute weightily to the increase. On the retail front, Pick n Pay was the first South African retailer to get majorly onboard with the Fairtrade agenda, stocking such Fairtrade staples as Bean There coffee, Spier Wine and Turqle Trading’s Fair Trade Original spices. And we bought one of those yak wool caps with earflaps at the Grahamstown festival last year.
Business Day 20/07/12
Ferrero, the maker of those foil clad crunchy choccie balls which people purchase at the last minute to give other people to whose houses they have been invited to dinner, and also their aunts, for Christmas, but also of Nutella, Kinder Joy eggs and Tic Tacs, in May won an ASA appeal against Fruit & Veg City which had been selling a tacky Chinese version of the Rocher chocolates, known as Tresor Dore. These have to be sold out and not returned to the shelves by September. And in a bit of non-news reported by our otherwise fairly astute colleagues in the business press, the company intends growing its operations and hopefully employing more people, unlike any other business in South Africa.
You won’t be wanting to hear this, but consumer confidence, that harbinger of retail sales, as measured by the FNB/Bureau of Economic Research has dropped in the second quarter of this year to levels last seen in the post-crash second and fourth quarters of 2008, compared with a boomtime high of 23 in 2007. The index declined eight points during the second quarter to -3 from 5 in the first quarter, suggesting that consumers’ appetite for spending may be on the wane as they acknowledge a barrage of negative economic data from Europe and the cornfields of Iowa, and a wave of political uncertainty at home.
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