Trade Tatler
“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan

TATLER ARCHIVE

THIS ISSUE:     06 May - 12 May

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RETAILERS AND WHOLESALERS

Market Share  Running the numbers

Pick n Pay, Shoprite and Nielsen have agreed not to talk about market share any more, which is great news for us, because, um, because ... hey wait a minute! Last time anyone checked, Pick n Pay was still the biggest guy in town with 34% (or 33.7% without its now defunct Score stores) while Shoprite had grown 1% to 30%, SPAR was coming in a game third at 25% and Woolies an understated 10%. Together, interestingly, they own only 50% of the South African food market, the rest of which is owned by the independent and the informal sector, who are more concerned with making a living than beating their chests and haggling over percentages which may or may not mean anything.
Comment: But assuming they do, isn’t it in the interests of various stakeholders to know? And isn’t it anti-competitive to collude in the suppression of those numbers? Tweet us here if you have a view on this.

Fin 24 10/05/10

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Pharmacy  Healthy competition

Clicks, you will recall, now has 224 in-store dispensaries in its 354 stores. Shoprite, next off the blocks, has 100 and counting, quite rapidly. Pick n Pay has 17 in its Hypers, and despite the fact that Pharmacy doesn’t offer anywhere near the margins but does offer twice the headaches of Liquor, they plan on rolling out another 40 in short order. SPAR is trialling a couple, something Woolworths has not done very well – despite their deal with Netcare who were going to be getting the licenses and running the dispensaries. In 2003 legislation was passed to the effect that pharmacies, once the preserve of actual pharmacists, could now be owned by anyone, which meant open season on the now-struggling independent pharmacy sector. Pharmacy licenses are still only issued by the Department of Health, who apparently do it seldom and at random, to the frustration of the big boys.
Comment: The one advantage privately-owned pharmacy has over the corporate dispensary, is of course the personal care and service on offer – something for which many South Africans still seem willing to pay.

Financial Mail 07/10/10

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Capitec  It’s all about the benjamins

Capitec, who do the back-end for retailers allowing punters to draw cash at the tillpoint, are waiving their R1 withdrawal fee at various retailers for the next three months, including Pick n Pay, Checkers, Shoprite, Pep, Boxer and various SPARs. This to encourage Mrs Shopper to draw cash at the safe, well-lit till rather than the shady ATM, where all manner of muggers and scammers are champing to relieve her of her hard-earned. The upside for retailers here is that they’re able to channel their cash overflows back to the consumer, rather than having loads of the tempting stuff on hand to be filched from them, either by robbers or the banks who charge exorbitant deposit fees.
Comment: A win-win situation, as the expression goes.

The Times 10/05/10

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MANUFACTURERS AND SERVICE PROVIDERS

Imperial Logistics  Sheer driving pressure

Excellent work – or arbeit if you prefer – from Imperial Logistics, a big player in this industry we call home but also in the more arcane world of high-end motor vehicles, viz BMW, who have awarded to an Imperial subsidiary the management of their external warehousing and interplant transport in Bavaria. Gilhuber Logistik Group, a wholly-owned subsidiary of Imperial’s Panopa Logistiek unit, offers an innovative service to BMW, reducing empty runs and substantially increasing the capacity utilisation of equipment, through the judicious application of IT and process efficiency.
Comment: OK we may be slow on the uptake, but this appears to be a story about a great South African business teaching a legendary German business a thing or two about efficiency.

Tatler Reporter 03/05/10

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Sovereign  Insert chicken pun here. Please.

Chicken men Sovereign reported turnover growth to the tune of 16% to R12.06 buk-buk-billions for the year ending February. They reported headline earnings of R23million in the first half of the year, with a loss of R12millon in the second half. Not being financial blokes, we are quite honestly not sure what this means in terms of NPAT or operating profit, which is usually how these things are reported, and quite honestly we’re always a little leery when they aren’t. Sovereign pointed to the loss of jobs in last year’s miserable economy having affected their consumer base, and highlighted imports as another challenge – although as one commentator observed, poultry imports have actually declined over the past four years.
Comment: “Mixed” results then, in an industry which feels it does not enjoy sufficient government protection, but which might also look to efficiencies for profit.

Business Report 06/05/10, 10/05/10

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Sugar  Let them eat golfers.

Remember how excited we got about sugar a couple months back? Yes, well, moving on. This most volatile of commodities has gone seriously off the boil, to the extent that some exporting countries might literally not be able to produce the stuff for any kind of profit at all. The price has plummeted from a 28-year peak earlier this year to below the level at which it began its mercurial rise, according to our jolly old pals over at the FM. The price hike was based on apocalyptic predictions of the effects of El Niño on the Brazilian harvest, and the decline is due to surprise harvests almost everywhere, and to the Greek Crisis, which we at the Tatler are also blaming for the shortfall on our Tattersalls account this month.
Comment: The sugar fellers can always flog off the land for golf estates, something at least one producer here has done with great success.

FM 07/05/10

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TRADE ENVIRONMENT

The State of Things  It was the best of times, it was the worst of times. Except for the best of times.

Business Confidence is up (to 84.2 points in April, a point up from March, on the SACC index). But then so is joblessness – we lost 167,000 jobs in the first quarter of this year, suggesting a slow recovery from the Great Darkness. But then the Leading Indicator of Business Activity – a composite of a number of indicators which is a reliable predictor of trends 6-12 months ahead – was up almost 20% year on year for Feb, suggesting to some analysts that recovery is on track and sustainable. More pessimistic commentators, however, point to an extremely weak month on month increase to argue that recovery is in fact stuttering. And on the consumer credit side, the National Credit Regulator has said that debt stress in households is slowly easing, although the number of consumers with impaired credit records is on the rise with an increase of 880,000 in ’09 over ’08. Finally – and this according again to the leading indicator – household consumption remains low.
Comment: And Mrs Doubtfire over at the Reserve Bank has done nothing to help lately either. A shaky time all round, whether you’re a believer in the recovery or not.

Business Day 05/05/10, Business Report 28/04/10

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IN BRIEF

Massmart  Wakro, Makmart?

Who looks like a Walmart? Makro looks like a Walmart, that’s who. Not Shoprite, not Pick n Pay, and despite some buzz in that regard, not Trade Centre. Which puts Massmart ahead of the pack and pushing the buzzer just a fraction of a second earlier in that long-running primetime favourite Who Wants To Get Bought By Walmart? Or so the dabblers on the JSE seem to fancy, sending shares to a record high of R115.50 per as of last week, a trend currently being ridden by most of the majors.

Business Report 04/05/10

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Sainsbury’s  But we thought the Brits liked queuing

Sainsbury’s is investing literally millions of pounds in technologies, including the latest bi-optic scanners, which will enable punters to spend up to 12% less at checkouts, saving 500,000 man-hours per annum in the service of over 19 million customers. They’ve already introduced self-checkout lanes in all stores, and double-sided printing on receipts, putting them years ahead of the game when it comes to efficiencies, nice one.

Fastmoving 03/05/10

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P&G  You are – gold!

Procter & Gamble won big in this year’s prestigious Edison Best New Product Awards, taking two out of a possible four golds in the Consumer Goods category, those and more below:

Personal Care: Always® Infinity Feminine Protection Pads, Procter & Gamble
Food: Betty Crocker Gluten-Free Mixes, General Mills
Household: Purex Complete 3-In-1 Laundry Sheets, Henkel
Consumer Drug: Align® Probiotic Food Supplement, Procter & Gamble

Tatler Reporter 12/05/10

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