Trade Tatler
“Just because it happened in a fictional movie about a robot policeman doesn't mean it's right.”
Daniel Friedman

TATLER ARCHIVE

THIS ISSUE:     05 Apr - 11 Apr

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RETAILERS AND WHOLESALERS

Kit Kat  Have a break

Sweeping under the radar this week both of the major retailers and, one presumes Nestlé, is the Kit Kat group, which has just opened its 17th Kit Kat Express store, in Tembisa. Is that where they’re planning to stop? Is it heck: they intend to open another 84 Express stores in the next few years. Kit Kat Cash and Carry, with four stores and six to come in the medium-term, is an established presence in the independent trade, and like other businesses of that nature caters both to traders and end consumers. The Express format targets the latter, exclusively, offering them a heady mix of convenience and value that is highly sought after in this unfortunate economic ambit. “We have always endeavoured to bring the best possible prices to our customers and believe that our shoppers can expect to spend up to 15% less on their monthly bill when shopping at our stores,” says Group CEO Mr Riaz Gani.
Comment: Another sturdy bloom in the bouquet that is South Africa’s flourishing independent sector. More power to them.

Tatler Reporter 08/04/19

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Woolworths  He says, she says

Zyda Rylands, MD of Woolworths South Africa, doesn’t say much, but when she does, it’s worth listening. Like this:On the 26-week decline in clothing sales: “Dresses were too short, there was too much skin showing; so the older, modern customer: we completely alienated her.”On store openings: “We have slowed down our store openings in fashion. There will be more growth in food. We’d look to do smaller stores as and when it’s appropriate.”On Food: “We’ve … had to change how we see food and drive a good value proposition for customers, together with the fantastic innovation we have.”On her job: “My job is to make sure that SA delivers. And that even in the most difficult circumstances we will always do the right thing.”
Comment: She has a clear idea of what’s wrong with the South African business, and what’s right. It is to be hoped she can guide it back into more profitable territory.

Business Day 27/03/19

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Shoprite   Hashing out a deal

Shoprite has always operated smartly at the tricky nexus between doing the right thing and making a buck at a price the punter is willing to pay. So its perhaps not surprising that their R5 deli meal initiative has been a howling success, selling 100 million of them since launching the affordable meal options not even two years ago. The meals range from potato hash browns at R2 a pop right up to R5 for fried fish. And this is not the only area where Shoprite has taken the circumstances of its poorer shoppers into account: they’ve fixed the price of the 600g in-house white bread at R4.99 since April 2016. It has also served over 37 million cups of soup in its hunger relief efforts, planted 62 food gardens and trained over 1,300 small-scale farmers, as well as donating half a billion worth of surplus food to charity.
Comment: Some of these endeavours seem to fly in the face of the profit motive. But doing good, as Shoprite has shown repeatedly, can indeed be good for business.

Tatler Reporter 08/04/19

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MANUFACTURERS AND SERVICE PROVIDERS

British American Tobacco  Picking up stompies…

What a mess. British American Tobacco, as far as we can tell, believe that they’re due a R30m rebate from SARS, as they’ve been a good corporate citizen, kept their books straight and forked over R9bn some change to the taxman last year. SARS, on the other hand, believe that BAT owes them R143m for “alleged contraventions … discovered after a SARS audit”. These contraventions, SARS says, have to do with rebates claimed by BAT after they reprocessed millions of cigarettes. Another thing BAT believes is that the SARS allegations, based on a leaked document “distract the attention from the real problem, which is the illicit trade in the market, robbing SA of at least R8bn in taxes this year”. Accordingly, they have committed their (at this point theoretical) rebate to an initiative they’re rather catchily calling #TakeBackTheTax, aimed at bringing down illegal baccy in the Beloved Country.
Comment: SARS vs BAT eh. We haven’t been this excited since the Connor McGregor / Floyd Mayweather fight.

Business Day 08/04/19

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Rooibos  Strong brew

Rooibos is the champagne of South Africa: ours, and ours alone, and while others may grow and market a twiggy, smoky herbal brew, they can never call it Rooibos. Or even Le Rooibos, as the French once tried. Rooibos, as you know, has proven beneficial properties, creating a warm glow of self-righteousness in those who choose it over actual tea, or calling to mind the sunrise over the Lebombos for the homesick bachelor in his Putney flat. Now, a crack team of researchers are set to find out whether it does other things, like, oh, we don’t know, fight allergies, heart disease, diabetes, obesity, skin diseases, skin cancer and the side-effects of antiretrovirals, that’s all. Armed with a R4.5m grant from the SA Rooibos Council, Universities in SA and New Zealand will soon start to human-trial the effects of concentrated Rooibos on various conditions. They will also be looking at the effect of our national drink on the microbiome, that busy colony of bacteria on your gut that keep things ticking over.
Comment: A South African icon claiming a place in the alternative-medicine pharmacopeia.

The Times 03/04/19

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TRADE ENVIRONMENT

The Economy  A bit of a shocker…

More on the decision by Moody’s last week to take a pass on making a call on our sovereign debt situation. As they see it, our current creditworthiness is supported by a diversified economy, a solid macroeconomic policy framework and a deep bench of domestic investors. Their big worry (and get to the back of the line, there) is Eskom, whose debt makes up a whopping 8% of GDP, with the government to pour another R69bn into that cesspit of corruption and incompetence over the next three years. Moody’s have also indicated that they’d upgrade our status if the government put structural reforms in place to encourage growth and stabilise our debt relative to its similar economies. In the meantime, a Nobel-winning economist has warned at a meeting of the New Development Bank (NDB) – a multilateral lending institution established by the BRICS bloc – that youth unemployment in South Africa is a human catastrophe, and that we need to get as many young people into jobs as possible rather than hanging about waiting for the education system to improve.
Comment: Our economy is the new ‘Struggle’, and needs to be approached with the same unity of purpose, energy and sense of urgency that the last one was.

IOL 03/04/19

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IN BRIEF

International Retailers  You do the MAF

Carrefour franchisee Majid Al Futtaim (MAF) Holding, a Dubai-based business, is looking for growth opportunities in East Africa, and even, by acquisition, in South Africa. MAF has already gone up against South African retailers in Kenya, where it currently has seven Carrefour stores. In the UK, German discount Aldi has nudged Morrison’s out of the fourth-place slot in market share, with Tesco, Sainsbury’s and Asda still on the podium, but Asda edging Sainsbury’s into third. In bad news for our own Woolworths, Deloitte are predicting flat growth in the Aussie retail market for the year. Finally, in a model which may work for our own market, Walmart is taking the lead in the bricks and clicks curb-side model of grocery shopping: order online, then get your order loaded into your car at a drive-by location.

Tatler Reporter 08/04/19

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Clover  An unholy row

Brimstone are still dragging their heels over their proposed 15% stake in Milco, an Israeli-led consortium intent on the R4.8bn purchase of Clover. Brimstone, you will recall, are under pressure from the pro-Palestinian lobby Boycott, Divestment and Sanctions SA (BDS) to pull out of the deal. 99% of Clover shareholders, in the meantime, are still on board.

Business Day 04/04/19

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