Trade Tatler
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Dave Barry



THIS ISSUE:     22 Apr - 29 Apr

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Pick n Pay  Working the numbers

Pick n Pay reported a slight increase of 33.7% in market share, made up presumably of punters for whom the whole supermarket/lifestyle question is somewhat academic. Turnover was up 9.8% to R54.7billion, but trading profit was down 2.5% to R1.653billion, with margin sliding 0.4% to 3% – a result, suggested Mr Badminton, of Pick n Pay not using food deflation to recover margin, but continuing to pass savings on to shoppers. On the upside, and there is a bit of that, private label grew 15%, or 26% in packaged foods, and now accounts for 15% of value sales in food. The Group also reported 17% growth in Fresh, an area in which, as you know, everyone wants to win. On the down-under side, Franklins profits did not wax neither did they wane for the year, flat lining in rand terms at a time of rand strength. Again on the upside, great achievements on the supply chain efficiency front where, thanks in part to Longmeadow, the Friendly Giant, cost per case was down 15%.
Comment: Solid foundations, or so we hope, for growth when the old silver lining appears along the storm-tattered edges of our economy.

Tatler Reporter 28/04/10

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Clicks  More than skin deep

Sales over at The Clicks Group grew 9.3% to R6.9billions for the year ending February, with pre-tax profit climbing 18% to R376millions, and operating profit margins up 0.1% to 6%. According to Mr Kneale, the reason for this is simple – more lipstick, less dresses, with Clicks specialising in the former rather than the latter. This view is borne out by the minimal increase in Musica’s turnover, which grew by only 0.5% – to be expected for a retailer dealing in discretionary items during a recession. Another boost was of course pharmacy – Clicks are in sight of their goal of 300 in-store pharmacies, with 254 open at time of going to press, and 30% of Group turnover coming from pharmacy wholesaler UPD, which supplies independent pharmacies operating under the Link brand, also owned by Clicks.
Comment: A quiet cracker of a performance from a business with a simple strategy, impeccably executed.

Business Day 23/04/10

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The state of things generally  ... and we’re “fairly” excited

The beard-tugging, riempie-stoel shuffling, koffie-en-beskuit imbibing, stoep-sitting economists down at the Bureau of Economic Research in Stellenbos have opined that the outlook for SA’s economy is “fairly promising”. They point to facts such as the decline of inflation from its 13.7% peak in August 2008 to its more comfortable 5-odd% level as we speak, and the prospects of the rand, which should come off the boil towards the end of the year. It’s riveting stuff like this which makes them economists, and us not. 23/04/10

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Woolworths  Gas, boys, gas!

Woolies has recently commissioned the first supermarket-based refrigerator in the S of A, and thus far it is delivering handsomely vis-á-vis efficiency. Further CO2 units are to be installed in new stores, while older stores will eventually be retrofitted with the technology, which has been installed successfully in the UK by Marks & Spencer, and is pretty much impossible to understand. 20/04/2010

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Pick n Pay  Islands in the stream

Le Grand Bleu, la Isle Maurice, a match made in tropical heaven. PnP are planning on opening two stores there next year, and are looking at opportunities in Angola. They also intend putting 50 Daily stores into BP petrol stations across SA. Last week, it emerged in these pages, ahem, that they are on a serious medium-term rollout programme in Zambia. While Pick n Pay have been criticised for their sometimes glacial pace of change, when they move, they move.

Bloomberg 21/04/10

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Mondi  Tout le Mond

Mondi has bought the industrial and paper bag operations in Western Europe of the picturesquely-named Smurfit Kappa Group, to whom it has in turn sold its three corrugated box plants in the UK. The latter sale will be on a cash basis and will go some way to the reduction of Mondi’s debts. The whole deal is aimed at the rationalisation of Mondi’s packaging interest in the EU, and will provide the Packety One with a net inflow of €8million, which is nice.

Sapa 19/04/10

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CGCSA  A nation of shopkeepers

The Consumer Goods Council of South Africa has launched its South African Retail Council (SARC) to wide acclaim from retailers. The body will be a collective voice for the industry which will shape the environment in which retail takes place in South Africa, and will represent retailers in the areas of economic and legislative affairs, advocacy, networking and labour relations – this last a significant shift away from the stance of CGCSA, which was to give labour issues a wide berth.

Tatler Reporter 21/04/10

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Unilever  Into the wide blue yonder

Bank of American Merrill Lynch upgraded its stance on Unilever shares to “buy” a short while ago, arguing that the company was a solid player in emerging markets, whence it derives 50% of its revenues, and where its prospects for growth are intriguing. Mrs Global Punter buys a Unilever product, somewhere in the world, 160 million times a day and a range of goods are manufactured in 170 different countries by the business, which employs 163,000 staff, many of whom keep their roller suitcases packed under their desks, ready to jet off somewhere exciting at the drop of a hat.

The Telegraph 10/04/10

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