School of Retail
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THIS ISSUE: 28 Jan - 03 Feb
The Woolworths Growth Academy is launching a fast-track career development course in retail to 20 previously disadvantaged candidates, both graduates and non-graduates, as its contribution to an industry which is somewhat lacking in the formal skills department. The 12-18 month course is a JV with the Wholesale and Retail SETA and the University of Stellenbosch. In other Woolies news, Woolworths Holdings is issuing 11 million shares from its unissued share capital to Woolworths (Proprietary) Limited, for the purposes of some arcane JSE requirement or other. The capital raised will be forked out to shareholders in lieu of the interim dividend due for the six months ending December. Comment: Now where did we put those Woolies shares? Ah, there they are.
I-Net Bridge 29/01/10
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In India, there is apparently some superstition about buying products in the pain balm and antacid categories from the modern trade. Naturally, this is a concern for the likes of both GlaxoSmithKline, who are looking for an easier route to market, and Shoprite, who want in on two popular categories. Thus, they have put their clever heads together to come up with a channel strategy, where cross-category and checkout placements have been identified as the way to do it. These categories are now flying off the shelves at Shoprite – sales of antacids have grown six times there, while pain balms have doubled. Comment: Which just goes to show what happens when creative suppliers and receptive retailers put their clever heads together.
The Economic Times 27/01/10
New Pick n Pay stores which have been converted from the Score trading brand are growing sales at an average of 34%, according to the Big Blue’s Franchise Director, Chris Reed. Since the start of the conversion programme – and the numbers don’t necessarily add up – 52 stores have been converted, 19 to Boxers. 40 have been sold to third parties as franchises, 10 of them in Botswana to a master franchise holder for conversion to Pick n Pays, and 14 have been closed outright. While individual turnover appears to go up when a Score converts to a Pick n Pay, the overall numbers are unclear. Pick n Pay set a target of R2 billion in turnover for Score conversions, but isn’t saying whether the target was met. Comment: The Score conversions must be a worry for Shoprite, who for a few heady years enjoyed first-mover advantage in previously disadvantaged areas.
Business Day 27/01/10
Budweiser are bringing in all the beer you’ll need for the World Cup in a big red and white supertanker which is to be anchored off Durban for the duration, and that’s official. But just in case they don’t, unbranded beer from local boytjies SABMiller will be available in the fanparks, and what could be more fun than a game of footie and beer roulette? Rumour has it they’ve still got a vat or two of Lion and a couple of barrels of Colt .45 they’re going to be throwing into the mix, maybe even some Ohlsson’s, with unbranded T-shirts, cooler boxes and caps for those who can guess what vintage brew they’re drinking. Comment: The dark genius of the Fifa business model brings fresh joy every week.
Business Report 01/02/10
Even the sharp suited fellers over at SAP have had it tough over the recession, with net income down 12% globally to €727 million. Not to worry, though, the payroll and CRM chaps have got a plan – cutting costs, and eyeing an operating margin of 30%+, up from 27.4% last year, and sales up between 4 and 8% from 2009’s €8.2 billion. They’re also looking at providing lower-priced standard software support packages for struggling customers, and are looking at investing up to wait for €5billion for acquisitions to grab some market share from competitors like Oracle, whose profits were up 13% globally last year. Comment: Those standard packages will be good news for businesses who have long coveted the SAP basket but never had the wedge to buy it.
Business Report 28/01/10
As if you didn’t have enough to worry about, the cocoa price has gone through the roof, hitting a 30-year high, and conspiring with the pending increase in the price of electricity and high sugar prices to push the price of chocolate up. SPAR, for example, is expecting to pay between 6-9% more for chocolate products by March. Ironically, one of the reasons for the massive increase in the price of cocoa powder – at 42.5% for the year – has been the increase in demand for cheap chocolate. Most retailers and manufacturers have said they should be able to absorb much of the increase, with the former hoping aloud that the certain people would keep increases in line with inflation, and the latter muttering idly that they would, but other people needed to realise that they won’t be changing their ingredients anytime soon. Nestlé has said that it would increase efficiencies at its factories and look at smaller pack sizes in order to keep its customers happy. Comment: And Easter barely two months away.
Business Report 31/01/10
The Trade Deficit, a notoriously fickle indicator which depends on such variables as the timing of shipments, swung unexpectedly into the black for the month of November, showing a surplus of R3.7 billion. In 2009, the deficit shrank 64% from a shortfall of R71.6 billion in ’08, dramatic stuff, and not necessarily good news. On paper, you see, a positive balance means we’re selling more than we’re buying internationally, but it can also mean, as it seems to now, that domestic demand is weak, which is in keeping with the view of certain hollow-cheeked economists waiting tables in Camps Bay that our recovery from the recession is lagging the exciting international scene. Comment: Paradoxically, however, exports are likely to pick up speed as we recover and the factories shake off their coating of fine dust and get productive once more.
Business Day 01/02/10
This week, Mrs Doubtfire over at the Reserve Bank kept interest rates unchanged, bless her, but hinted at the possibility of a drop should the recovery not materialise at the desired pace. However, the dear old CPI was of course slightly up for the month of December, putting inflation, at 6.3% just outside the government’s targeted 3-6% band, although food prices were not the drag they have been. Also on the downside, the consumer confidence index is down to 59.8 from 78.7 a year ago, despite our return to economic growth. The Mastercard Survey, whence this disheartening statistic emerged, is based on five indicators, viz the economy, unemployment, stock market, regular income and quality of life, most of which boxes few South Africans would tick with a flourish. Comment: Increase the limit on our Mastercard, however, and you could start to see a very different picture emerge...
Fin 24 29/01/10, Business Day 27/01/10
In the UK, where for the first time in over ten millennia herds of mastodons are roaming the icy tundra, food prices have gone up an equally mammoth 2.8% for the month of January, with the average household spending six quid extra per month on the necessities. What? Well, yes, that is quite a lot, actually. For them.
The Scotsman.com 02/02/10
Last word, we hope, on the Cadbury acquisition saga. Fancy Italian cioccolatianisti, if that’s the word, and we’re almost positive it isn’t, have said they’re not going to counterbid on the Kraft offer which got old Mr Buffet so exercised last week, and by jiminy if those swell fellers over at Hershey’s didn’t say egzackerly the same thing!
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