School of Retail
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THIS ISSUE: 18 Mar - 25 Mar
The Big Red One has announced that its soup truck programme is to continue, with mobile kitchen units going out in 2010 to help to feed SA’s poor, especially children and old people, as well as the thousands of people affected by job losses. Since it was launched a year ago a total of more than 3 million cups of soup and bread have been served at schools, homes and community centres, or where disaster has struck – which in ’09 meant lots of flood relief work. Each mobile kitchen is manned by three Shoprite staff members and supported logistically by the Shoprite supermarket in the area in which it operates, and stocked through generous contributions by Royco. Comment: Solid stuff – relevant, generous and visible, the perfect CSI initiative.
Tatler Reporter 25/03/10
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The big chaps are (slightly) at odds about how low food prices will go at the till, and how long they’ll stay there. SPAR’s marketing head Mike Prentice believes that food inflation has bottomed out (StatsSA are calling it 1.6% for Jan) and that it is likely to start picking up again in the next month or so. Pick n Pay food director Kevin Korb is of the view that it will flat line at its current position for the next five or six months. While the availability of agricultural commodities and the price of food itself are of course the major factors driving inflation at the till, others naturally also come into play. Eskom’s hikes will cost Pick n Pay R85million in the first year alone, and while the intention is to absorb as much of the cost as possible, some of it will inevitably come from Mrs Punter’s patent leather purse. Comment: The good news regarding food inflation is that at the moment, globally, supply outstrips demand.
Financial Mail 19/03/10
The Cosmic One has come up with a cracker of an idea: open a R70bar bakery in Cape Town to boost its capacity to supply its fast food and other customers. Astral – dig this – already sells loads of buns to both McDonald’s and KFC, but not, would you believe, the chicken that goes in them. Through its East Balt subsidiary it supplies various concerns with English muffins, Kaiser rolls and other sandwich carriers as they are known in the industry. The expansion will help Astral, SA’s number two chicken producer (“We lay harder”) to supply expansion into Africa. The group already has some presence in Zambia and Mozambique, and is looking with interest at Botswana, Namibia and Zim, which could prove something of a springboard for the rest of the continent. Comment: Buns, eh? Well, it takes all sorts to make up a chicken burger.
Business Day 16/03/10
SA’s fourth biggest pharmaceutical manufacturer – and it’s fastest growing – posted an increase in headline earnings of 25.7% for the year to December, for a total of R160.9millions for all of those happy punters who took a little flutter. Cipla have just concluded a major agreement with Biomab-Desano of China, involving things called “bio-similars” and “monoclonal antibodies”, about which your guess is as good as ours. They’re also intent on adding an oncology division to the old portfolio by the end of 2011, and will continue to bat furiously in the generics market, towards which there is a move by strapped consumers. Competitor Aspen, in the meantime, has just sold its stake in its oncology joint venture with Strides Arcolab, for the usual tidy profit. Comment: Nice one, those boffs.
Business Report 19/03/10
Barloworld Logistics have just published the results of their 7th annual Supply Chain Foresight survey, a qualitative study canvassing the leaders of various industries for their thoughts on the state of play and its opportunities and challenges. They have stern words to say on the subject of strategy and innovation when it comes to FMCG – they believe this industry we call home is focusing on tactical and operational issues like inventory reduction, supply-chain efficiencies and transport optimisation – the low hanging fruit, as it were – rather than attempting to jointly develop strategies for a supply chain that really hums. In this regard, head of sales Mike Manby, presenting the results to industry leaders in Jo’burg, expressed some nostalgia for the days of Efficient Consumer Response. Comment: It may be argued that ECR was a philosophy and organisation ahead of its time, whose principles of communication between trading partners are even more relevant now, paranoia about the Competition Commission aside.
Retail sales, you will be delighted to know, unless you’re betting against them by some arcane investment vehicle, fell by only 1.7% year on year for the bleak and gusty month of January, compared with 3.8% for December. This signals what Gucci-chained analysts are calling a “nascent” pick-up in consumer confidence and perhaps a full-blooded economic recovery in our lifetimes (although the gloomy corridor-haunters at the World Bank are saying it’s going to take 15 years globally). Sales in the pharmaceutical sector rose by around 6%, while the number for our own great industry, or at least that part of it covered by the definition “Retailers of food, beverages and tobacco in specialised stores”, was, sadly, down by 1.7%. Comment: Anyone have a clue how to pronounce “nascent”? Well, do you?
Business Report 18/03/10
Shoprite’s sole outlet in India has been bought by a crowd called Future Group, for an undisclosed sum, and (barely) re-named it Foodrite, which does not meet the Tatler’s perhaps too-rigorous criteria for originality.
Economic Times 20/03/10
The hulking behemoth at the heart of global retail is plotting, nefariously one imagines, to cut prices yet more aggressively in its war against traditional grocers. This, say analysts, will up its share of the US grocery market to a whopping 21.6%.
For those harried business people, creative types, gym bunnies and jollers who just don’t have the time it takes to neck a skinny little 250ml can of (almost) everyone’s buzz-inducing bubbly stuff there’s this: the Red Bull Energy Shot, a re-sealable 60ml bottle of concentrated, non-fizzy craziness jam-packed with 80mg of caffeine and 25 calories, ideal for mid-workout or just before your diatribe in the Big Meeting. It is (ahem) expected to fly off the shelves.
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