School of Retail
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THIS ISSUE: 04 Jun - 09 Jun
Massdiscounters, the Game and Dion guys, are in the process of retrenching around 750 staff following restructuring at DCs which has meant that fewer receiving staff are needed in stores. Massdiscounters had proposed a restructured working week to SACCAWU, which would have seen hours reduced from 45 to 40, with 12 hour days during peak trading periods, but no retrenchments, according to sectoral guidelines on the subject. SACCAWU were not keen on this, and apparently became somewhat conspiratorial on the subject, suggesting that the move was part of a strategy to bust unions before the Walmart takeover. Comment: Which, says Massmart, is not happening.
Business Report 02/06/10
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Pick n Pay is planning five stores in Lusaka, Zambia, over the next five years, and two in the Copperbelt, where there is apparently a bit of ready cash to be had. Under a deal with the Zambian Development Agency, the Big Blue will be engaging with local SMMEs for the construction and provision of its stores, sourcing 50% of stock from the little guys once up and trading. Pick n Pay will be investing around US$30million in the initial phases of its operation, and will create 1,000 jobs in the process. The ZDA has recorded capital inflows of $1.3billion in the first quarter of the year. Comment: Canny stuff from PnP, which appears to be building a base in SADC before, perhaps, further expansion on the continent.
Daily Mail 24/05/10
Currently SA’s most empowered retailer, and the 6th most empowered business on the JSE, Massmart has this year achieved its highest ever BEE rating, a level 4 rating of 66.12%, up from last year’s level 5 rating of 55.67%. The group increased its scores in the area of ownership (where it sits at 6.57%), employment equity (11.49%), skills development (10.36%), and preferential procurement, up by a supplier-challenging 4.7%). This according to Empowerdex, who will come and measure your business’ performance against the voluntary Codes of Good Practice of BBEEE, for a small consideration. Comment: Good work, that big feller.
“When April, with his sweet showers has pierced the dry root of March,” as our old friend Chaucer used to say, the Competition Commission does the right thing by the little feller for once, and invites small Millers to turn themselves in, if they are complicit in price fixing, which more than one of them are known to be, and spill the beans for a lighter settlement. The big guns – including, as you know, Tiger, Pioneer, Premier and Foodcorp included many regional players in their, ahem, discussions around issues of pricing as it were, the regional chaps making up a sizeable chunk of the market and issues of pricing, if you know what we mean, and we think you do, being so very thorny. Comment: “He knew well how to steal corn and take his toll of meal three times over; and yet he had a golden thumb, by God!” Again, our man Geoffrey.
Business Day 04/06/10, The Canterbury Tales 1386
Illovo Sugar’s turnover was down 1.5% for the year to March, despite record world sugar prices, increased production and good growth in domestic sales. What, then, is to blame? Why the jolly old rand of course, obstinately robust through much of the year, and doing our exporters no good at all! The good news is that profit before tax was up from R1.2 to R1.3billions, and that Zambia, which contributes 18% of group operating profit and Malawi (42%) are going great guns, richly rewarding Illovo’s investment in those markets first reported here some three years ago. Comment: Solid stuff, though, on the profit front, and promising.
Business Day 01/06/10
Food inflation, which at 0.9% is flirting dangerously with deflation, should begin its inevitable uptick some time in 2011 as the economic recovery picks up the pace, according to the Agricultural Business Chamber. While the increase should be gradual, this does raise the spectre of increased activism and even strikes. In 2008, food inflation spiked to 14%, with a corresponding rise in unrest. Right now, though, a plentiful maize harvest is keeping the wolf from the national door, with the surplus being absorbed by foreign markets to help safeguard prices for local farmers, bless them. Comment: The prices of agricultural commodities are a capricious and influential bunch of numbers indeed.
The good news is that armed robbery from stores belonging to the major chains has dropped 44% from November last year, from 25 incidents a month to a barely noticeable 14 of armed men storming into stores, brutalising the staff and customers, fleeing with large sums of cash and hardly ever being caught. The shift is chiefly attributable to beefed up security at stores belonging to large retail chains, and the trend is by no means universal – while Massmart report a 67% decline in incidents, Metcash say that it’s pretty much business as usual. But by and large the picture is positive – at R391grand the total stolen in armed robberies in April was down 89% on April ’09. Comment: The bad news, of course, is that armed robberies from independent retailers, who cannot afford their own private armies, is up.
Business Report 03/06/10
Last week we reported, erroneously, that Brandhouse had, for the purposes of taverns, slapped a recommended selling price of R100 per quart on its premium Amstel brand. While the competition would certainly like taverns to be selling the soothing brew for a little more, that would be a tad rich even for them. The correct RSP is of course R10 a quart – correct, that is, according to the people who brew the stuff.
Tatler Reporter 04/06/10
Shoprite is expanding its operations of Botswana with the opening of a Usave in the large village of Serowe. There is already a Usave in the town of Kanye, and five Shoprites nationwide. The store – which will add 12 jobs to the local economy – will rely on local contractors for services and maintenance. The Botswanan press are calling it a franchise business – we’ll keep you posted on that one.
Silver-haired retail maven Terry Leahy has mentioned that he will be stepping down as CEO of Tesco in 2011, to be succeeded by head of international operations Philip Clarke. "When I became CEO I had a plan," says our Tezzer. “It has taken 14 years, but that strategy has become a firm reality now and so I feel my work is almost complete.”
The Times 08/06/10
The European Competition Commission has opened up a file, if that’s what they do, on Unilever’s acquisition of Sara Lee, a merger which “creates significant overlaps in a number of products used by consumers on an everyday basis”. Many of which, it may be pointed out, they would stop using if they became suspiciously expensive after the conclusion of such a transaction.
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