School of Retail
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THIS ISSUE: 29 Oct - 04 Nov
The My SPAR campaign, which is probably the biggest thing, brandwise to hit these shores since the Pick n Pay and Woolies rebrandings, is gathering momentum, with POS rolled out to the stores, and the heartening story of a man who loved his woman so much that he used an entire store to propose to her all but entering folklore in the last week. And don’t think this is just a campaign – it’s a mission statement that replaces the iconic "Good for You". "The time has come to refresh the SPAR brand," says Group Marketing Executive Mike Prentice. "We wanted to re-enforce the key role that our customers play in our business and communicate the close alignment and kinship we have with them." Comment: One of the things that SPAR has consistently got right is making an emotional connection with its shoppers. Now they’ve taken that core value, and embedded it more deeply in the South African brand.
Tatler Reporter 04/11/10
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As some of our more astute readers so kindly pointed out last week, there has been a fairly dramatic development in the WakroTM deal. Walmart, it seems, while still intending to acquire a majority stake in Massmart, may not be buying the whole farm, as it were, echoing their structure in Mexico, where they own 68% of WalMex. The Mighty One has announced that it is investigating the merits of keeping Massmart listed on the Johannesburg Securities Exchange (JSE) and acquiring an unspecified number in excess of 50% of the shares while still offering punters the more than generous R148 originally mooted. It is possible that some Massmart shareholders expressed dissatisfaction at the bid, on the grounds that if it was such a great deal for Walmart, it might be a good idea to hold on to those handsomely-scripted, gilt-edged certificates a little longer. Comment: Potentially, then, the deal has just improved for local dabblers in shares of listed companies.
Reuters 29/10/10, SENS 28/10/10
The Posh One is taking an increasingly robust position on Africa, announcing last week that it would be looking to enter former hellhole Angola in the near future. Outgoing (in at least one sense of the word) CEO Mr Susman believes that Africa provides great opportunities for growth in the next 5-10 years and beyond, hence Woolies’ current investments in Botswana, Kenya, Namibia, Ghana and a little place we like to call the RS of A, and its bold yet understated intentions for Mozambique, Zambia, Uganda and indeed Angola. In unrelated Woolies news, the dapper one was recently crowned Responsible Retailer of the Year at the recent Oracle World Retail Awards. The award goes to the retailer which the jury feels has taken the most significant steps to enhance its reputation. Comment: We tried to “enhance our reputation” once by taking the significant step of smoking an entire pack of Chesterfields behind the bottom cricket nets during Friday afternoon cadets, and did it work? It did not.
Business Day 27/10/10
...is the annual Barloworld Logistics supplychainforesight survey, and it wants you. The 2011 edition of the supply chain research study is currently seeking responses from supply chain experts all over Southern Africa. This independent study has been sponsored by Barloworld Logistics since 2003, and this year’s survey should be a humdinger. As economic power moves away from the first world to the emerging economies, South Africa’s stable and efficient supply chain networks take on a new importance, enabling us to compete with the big boys of the global south. This year’s survey has been designed to gain deeper insights into the how of this. Comment: And speaking of how, to find out how you can participate in the survey, click here.
What we really wanted to say here was isn’t it nice that we don’t have to bang on yet again about Pioneer’s horrific Competition Commission fine? That was before yesterday’s sorry news that anticompetitive practices had cost them almost R1bn: R200m in February, and a further settlement of R500m, as well as another R150m subsidy to keep bread prices low. Of the R500 large, R250 will find its way home to the treasury, and the other half will go to an agricultural competitiveness fund to facilitate the entrance of smaller players into the market. Having said that, the really interesting Pioneer-related news is that Pioneer Foods and KWV Holdings have issued a joint cautionary announcing the possible acquisition of the latter by the former. Comment: Anything which brings down the price of a bottle of Laborie is fine by us. Did we say fine? Oh, nooooo.....
As one shark-eyed fund manager remarks: “I’m not interested in owning Coke when it’s got no more continents. But that’s 15 to 20 years from now.” The continent which Coke has got, for its best growth prospects, is of course our own, the thirsty motherland, where it is chasing down the 7-9% earnings growth it has promised shareholders. And it’s getting there – through the simple expedient of extending short-term credit to merchants, volumes in a test street in Alexandra, grew from 5,000 to 14,000 cases every year. In Kenya, a growing economy with a relatively westernised population, each punter drinks 39 servings of the fizzy brown liquid every year. In Mexico, which admittedly is Coke’s biggest market by volume, they positively inhale 663 servings each per annum. Comment: The size of the prize is potentially enormous: Africa’s GDP is $1.6trillion – bigger than India, or Russia.
Business Report 31/10/10
Despite the drag of a strong rand on the South African economy, South African consumers have not recently had it so good, albeit it in a low-key, Sunday-morning-after kind of way. Inflation at 3.2% for August continues southward, and with it the interest rate. Even Mac Daddy Rand is doing his thing for the little guy, depressing yesterday’s petrol price hike to a doable 20c per litre. And the good news, if, you know, you don’t sell stuff, but are more on the buying and using it side of things, is that this chilled plak is likely to continue undisturbed until sometime in 2012, or when Fire Through the Window play at the Botanical Gardens again, whichever comes first. Comment: And we might think of going down there at about three. Or maybe later, depending.
After a sterling set of results, Shoprite’s turnover was up 9.7%for the first quarter, in a trading environment which like our Standard 8 mathematics results could do better. Supermarkets RSA, the catchy new title for the Group’s core division, grew turnover 8.5% for the period with internal food inflation spluttering below the surface at -1.5%. Nice work there big guy.
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