School of Retail
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THIS ISSUE: 15 Apr - 21 Apr
Aptly-named attorneys Bell Dewar have lodged a competitor complaint with the ASA on behalf of Pick n Pay, against a TV commercial flighted by Checkers. In the ad – which is, it must be said, superbly scripted – Checkers claims that 809,127 new shoppers have moved to Checkers, and that the retailer offers “the best lamb in South Africa”, “exotic new cheeses” and “finest wines” – all claims which Mr Pick n Pay requested Mr Checkers to prove were factually correct. Mr Checkers then withdrew the ad, claiming that it had run its course in any case, rather than having been hounded off the airways by Mr Pick n Pay and a bunch of lawyers named after fancy liquor. Comment: We await a final word on the subject from Checkers’ attorneys, the grand old firm of Cohiba Montecristo.
The Times 14/04/10
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A busy week for Shoprite, trading briskly in its brand new category of tickets to football games in Bloemfontein and Nelspruit, aimed at a newly-defined demographic, of People Who Should Have Got Their Act Together Earlier, a.k.a LSM 7.5. Despite the odd, inevitable Fifa-induced hiccup on day one, it was a well-run operation, highlighting the awesome commercial value of Money Market to the Big Red One, which gets the jump on everyone, all the time, these days. At the Tatler’s own local Checkers, a dark-trousered Fifa bloke gave us the run down in tactful conversational tones, and was followed by the store manager, who then told us what the drill really was, in a sergeant major’s bark that made us wish we could still sak vir tien. Comment: See you in Bloem, then.
Tatler Reporter 19/04/10
“Who?” you may ask, and you’d be wrong. Saverite is of course Massmart subsidiary Masscash’s newish franchise operation, and it has been busily rolling out stores since opening its first store in 2008. Currently there are around 50, and the plan is 175 by June 2012. Apart from a 1500m2 whopper – a failed SPAR – in George, most are 400m2 convenience retailers, positioned against KWIKSPARS in the market. They are served rather handily by Shield Wholesalers, with no minimum order, and buyers being able to pick and choose across the range. Interestingly, 16 of the outlets were acquired from Pick n Pay in its wind-down of the Score brand. Comment: Massmart’s first real move into FMCG retail, and indeed franchise, an area which almost everyone is exploring these days.
Supermarket & Retailer 03/10
SA’s wine industry has launched the world’s first sustainability seal, a bottle-top device with a unique number which allows interested parties to track the wine’s provenance, ahem, which has been duly scrutinised for a range of sustainability measures, including integrated pest management, the health of workers, the conservation of biodiversity in vineyards and the reduction of emissions. Together, these measures make up a set of sustainability principles known as the Integrated Production of Wine (IPW), which apply all along the value chain, from the farm to the winery to the bottler. The seal results from a collaboration between the Wine and Spirits boards, IPW itself, Wines of South Africa and the Biodiversity and Wine Initiative (BWI). Comment: A bonus here is that as SA is first to market with the seal, local producers will be disincenitivised to bottle their wines offshore, which is nice.
International ratings agency, the aptly named Moody’s, believes that returns from the global beverage industry are not going to be all that this year, making particular mention of our very own SABMiller, which Moody’s believes have been put under pressure by its interests in Eastern Europe, which suffered the vicissitudes of the economic downturn last year. Absa analyst Chris Gilmour believes differently, suggesting that with its dominance in Poland and Romania, the Big Feller is admirably positioned for growth once the Slavs start pinting again. SABMiller, in the meantime, have said they’re looking for 2-4% growth in Eastern Europe in the medium term. Comment: What sort of people stop drinking in a recession, we are once again forced to wonder.
Business Report 15/04/10
Agriculture minister Tina Joematt-Petterson has issued a hopeful decree that all the bread producers guilty of price collusion should sell their bread at cost. While her comments were sparked by anger at the recent bread-price-fixing imbroglio, she was also speaking out of concern for the country’s poor, suggesting that these businesses had a duty to assist the government with a programme which would make bread more affordable. As certain sage commentators have pointed out though, the best thing for that is competition – and government has a role in creating a more competitive landscape. A circular argument. Comment: And would that be the same cost price for everyone, though? Eh?
Business Report 14/04/2010
Who was it who said the recession in retail was over? Come to think of it, it may have been us. A little precipitous there, we are afraid. Retail trade sales have fallen for the 13th straight quarter year-on-year, and were down 1.5% for the month of February, after certain shifty-eyed economists had predicted a slight increase. On the upside, retailers of cosmetics, toiletries, pharmaceuticals and medical products traded briskly, increasing sales by a respectable 7.2% for the month, as medicine prices rose and punters continued to indulge in the smaller luxuries while they couldn’t afford the bigger ones. Comment: A stark reminder that this recession was indeed the Big One, and that nobody is out of the woods just yet. Except, of course, for the well-groomed ladies over at the cosmetics counter.
Business Times 17/04/10
New food labelling and advertising legislation introduced in March is going to create nightmares for the luvvies in the copywriting department, we’re very much afraid to report. Currently, 90% of food advertising contains some sort of health claim, and the new legislation is going to outlaw the use of certain words implying health or nutritional benefits. And some claims – like “low fat’ and “high fibre” are going to have to be eminently provable, while others like “fresh” and “homemade” are going to be subject to another whole palaver. There’s some thought that all of these onerous requirements are going to lead to more straight “get it here for less” retail advertising. Comment: And so, quietly, dies the golden age of copywriting.
Last week we erroneously reported that Shoprite had 124 stores in total, which would make it one of these promising independent groups you read about these days. Don’t ask us how that happened. In fact, Shoprite has 1137 stores across the continent and 276 franchise members. Our huge apologies, that retail giant.
Tatler Reporter 20/04/10
Starchocs? Chocbucks? Cadbury have been given the go-ahead by new owner Kraft to open a chain of 60 tea and cocoa shops all over the UK, selling afternoon tea and large versions of traditional treats like Twirls and Flakes, which will be gift-wrapped if you so desire. It all sounds a little barmy to us.
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