Trade Tatler
“Buying the right computer and getting it to work properly is no more complicated than building a nuclear reactor from wristwatch parts in a darkened room using only your teeth.”
Dave Barry



THIS ISSUE:     08 Jul - 14 Jul

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SPAR  No seriously, wherever you are

Heartened no doubt by breathless McKinsey reports of the pending retail explosion on this African continent, and champing at the bit to go head to head with Shoprite for a swing (to mix three sporting metaphors) at Nigeria’s 150million punters, SPAR are opening a flagship shop in Lagos, and have plans for others in Otta, Abuja and Port Harcourt. The idea is for all stores to be owned corporately for the first five years, then to license them to employees and other interested entrepreneurs thereafter – a compelling model in that hard-trading economy. An interesting challenge for retailers in that market is the resistance – now breaking down – on the part of suppliers, who historically and in the absence of retail infrastructure, preferred to sell their wares to licensed dealers.
Comment: A culture for which SPAR’s DC model might be well-adapted.

BusinessDay (Nigeria) 12/07/10

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Massmart  Yes it’s pink. What are you going to do about it?

Cheerfully-liveried Cambridge Meats, with its distinctive turquoise, yellow and yes, pink vans, is spearheading Massmart’s otherwise deadly serious charge into retail. The thinking is that food retailing is a resilient sector and the lower end is where the growth is, so what the heck, let’s open or buy 100 in the next five years. The Masscash division, where Cambridge is to be found, currently owns 22 retail stores under five regional brands, and the idea is that they’ll all be rebranded Cambridge by Christmas. Together, they’re worth a handsome and growing R2.5billion for Massmart every year. The typical Cambridge gives 50% of floor space to dry goods and 50% to perishables, which comprise around 30% in competitor stores. In the 52 weeks to June, by the way, Massmart lifted revenue by a handsome 10.1% to R47.5billions, with young Masscash outpacing Dad at a sprightly 14.5%.
Comment: Interesting times for the many independents in the sector as the Massmart boys ride into town.

Business Report 08/07/10

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Shoprite  It’s coupon magic!

Shoprite’s punters are positively choking for mobile vouchers, say Mobilitrix, who happen to produce a natty line in, yes, mobile vouchers. 68% of participants in the survey said they would be keen to receive mobile vouchers, while 43% of them mentioned that they were already receiving in-store paper coupons and 18% that they were receiving coupons in the form of gift cards. Mobile is looking to be the next – if not the final – frontier of CRM, with the simplicity, the paperlessness, the convenience of it all trumping those flimsy bits of newsprint that flutter round our stores like aimless flocks of army moths. They’re a sinch to receive on the most basic of cellphones, and a breeze to redeem for anything from airtime to bicycles at the till. But don’t believe us. Just ask Mobilitrix.
Comment: Bye, bye coupon clearing guys.

Tatler Reporter 07/07/10

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Unilever  This time for Africa.

Unilever, like China, views Africa as the continent of opportunity, apparently, and are expecting ongoing double digit growth – that’s market growth, not acquisitive growth, according to dapper CEO Paul Polman. China and Russia are still major contributors to the bottom line at the Le Grand Bleu, which gathers half of its revenues from the developing world, but Africa with its growing and ever-wealthier population, should prove a tidy and ongoing little earner as more developed markets slow. Africa’s population is apparently going to double by 2050, and they will be needing to source their washing powder and anti-perspirant deodorants from somewhere – home and personal care products will continue to generate 80% of the business’ revenue on the continent, where local conditions demand innovation, such as the development of smaller pack sizes.
Comment: Waka waka, eh? Eh?

Business Day 12/07/10

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Distell  10 Green Bottles

The clever fellers down at Distell are saving big tom on packaging costs and doing the environment a good turn at the same time. This by the simple expedient of reducing the weight of 2.9million of its bottles by just under 200g, for a total saving of 333.5 tons of glass and 14,000 tons of CO2-equivalent emissions. The company’s focus on the environment goes back to 1998, apparently, when Nederburg was involved in a pilot study which led to the establishment of the Integrated Production of Wine, by which suppliers are accredited. Next up, a superlight 350g bottle, currently under development with Consol.
Comment: Excellent work those wine guys.

Food Review 06/10

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Business Confidence  We’re saved! No, ruined No, saved! etc...

The SA Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) rocketed skyward between May and June as the chaps in pinstripes began to realise that this football thingy wasn’t such a bad idea after all. However, the BCI real retail sales component is lagging the index, suggesting that Mr and Mrs Punter, of Puntan’s Hill, are using the lower interest rates under which we are currently revelling, if that’s the word, to reduce the burden of debt they gathered when we were all so loaded a couple of years back. Either that or they simply don’t have much wedge to flash about right now.
Comment: And if they were inclined to look at the global picture, and there’s no reason they shouldn’t, they might be justifiably nervous about the state of the European economies, which have been borrowing from Petros to pay Paulo like mad, and present a threat to our own creeping walk over the eggshells of economic recovery.

Fin24 08/07/10

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Debt  We getta the money!

Private-sector borrowing (your business overdraft, our Tattersalls account, that sort of thing) has risen for the first time since September ’09, buy a timid 0.8% after a decline of 0.9% in April. And chances are, now that we’ve mortgaged the house for Bafana T’s and wing mirror socks, it’s going to remain “weak and erratic” for those in the know, who happen to be economists, but who are we to judge. The corporate fellers actually took their foot off the gas in May, with borrowing falling 1.5% YOY, while household credit rose 3.8%. Overall growth is expected to come in at around 2.4% for 2010, compared with an average of 6.5% between 2004 and 2007.
Comment: Which is probably why we’re a bit leery of the red numbers right now.

Financial Mail 09/07/10

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Investments  We’re on to a winner.

Don’t get done for insider trading now, and you didn’t hear it from us, but we reckon the recreational leatherwear industry is the place to put your hard-earned right now. “We need to harness the goodwill this great event has brought South Africa,” as we’re being told by everyone these days from the president himself on up, and those harnesses are going to have to come from somewhere...

Tatler Analyst 08/07/10

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Amazon  Not yet available on the Kindle has launched its online grocery store in the Uke, where people hate going out of doors when they can help it. The online retailer/antichrist depending on whether you’re an independent bookseller or not, will be offering a veritable cornucopia of groceries from such giants of the industry as Kraft, Nestlé, Pepsico and P&G, free of delivery. 07/07/10

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