School of Retail
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THIS ISSUE: 03 Feb - 09 Feb
Late last year, Mr Ackerman the elder launched a new book, and it’s a page turner. Titled “A Sprat to Catch a Mackerel”, the handy tome is aimed at those of entrepreneurial bent who are casting about, if you’ll forgive the pun, for a career change and wish, like Mr A, to start a multinational grocery chain. It’s crammed to the gills with tales of derring-do from the early days of Pick n Pay and sprinkled liberally with sound business advice from the man himself. A particularly illuminating anecdote, for example, is how he borrowed the R610,000 needed for the purchase of his first four stores from Jack Goldin from 60-odd investors drawn from the ranks of friends of friends, all of whom are either now very, very wealthy or died that way.
Comment: We’re rushing off to our nearest independent bookseller to get a copy, and suggest you do the same.
Tatler Reporter 08/02/11
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Good news on the crime fighting front is the bust of a syndicate in and around Brits of 16 isigebengu’s, including Checkers staff, security guards, truck drivers and private wholesalers. The merry gang had been slicking stuff en route from Nampak to Shoprite and other destinations, like the University of Limpopo’s medical campus. And in a Carte Blanche twist to the sorry affair, the goods were found in the recently deceased company of two cats, a zebra, an antelope and a crocodile, which in other circumstances sounds like the title of a rather jolly children’s book, but in this instance were destined to become low-cost processed meat at an independent wholesaler. The Checkers employees were the lynchpin of the scam, signing for goods which were partially received, if at all.
Comment: Opportunism, corruption, poaching – it’s a classic SA crime story, but fortunately with a happy ending.
The Mercury 04/02/11
And in Massmart news unrelated for once to you-know-what, The Men in Black have announced the results of the annual Massmart CEO’s Innovation Award, which acknowledges outstanding value achieved through the creation and implementation of unique ideas, tied to six core value areas – from community support to shopper loyalty. Winner this year was Thomas Malada of Makro Strubens Valley, who in a partnership with the Centre for Small Business development at UJ and the Gauteng Enterprise propeller set up a scheme for small business development in the store and succeeded in attracting 150 new small business clients to the business.
Comment: Innovation in driving value, as inspired by business and indeed Weekly Guru Edward de Bono is central to Massmart’s relentless drive to excellence.
Tatler Reporter 04/02/11
Speaking at a Kantar Retail day held last month on the subject of The Big Feller’s entry into our market, Director of Retail Insights and self-confessed Walmart trainspotter Bryan Roberts spoke at some length about Walmart’s possible intentions for Massmart’s trading brands. He compared Makro to Walmart’s Sam’s Club format, expressing the view that the two were virtually indistinguishable when viewed in a certain light and pointing to Makro’s bullish intentions for growth. He also mentioned that Walmart was not averse to a bit of C&C, so big up to Masscash there, and that food was going to be massive for the Group. In this regard, he predicted that Game’s Foodco project would probably end up as a stand-alone store in the near future. And the question on everyone’s lips: whither Massbuild? No problem there, Walmart is in fact the 4th largest home improvement and DIY retailer in the world, so a nice fit all round. Comment: Fascinating stuff, and well worth a listen when Mr Roberts visits our shores again.
Tatler Reporter 09/02/11
In further proof that we really don’t have a clue when it comes to the price of shares, HCI have apparently bought 34.9% of KWV stock at R11,80 per. This after Pioneer withdrew its bid to buy the business at a control premium of R12 per when KPMG valued the stock at R13,70. Some minority shareholders, however were of the view that the stock was worth twice Pioneer’s offer price, as the value of the winemaker’s land and properties was grossly undervalued at R33.7bar. For example, you could, in theory, have had Laborie’s verdant, loamy 45 hectares for a very reasonable R2.5million. And an Irma Stern painting, valued at R33million, wasn’t even on the books according to professional bloody nuisance Chris Logan.
Comment: Love among the vines eh. A lavish, sprawling family saga of a deal.
Business Report 04/02/11
Nestlé has announced that it will be building a spanking new 16,000m2 factory near a place called Babelegi for the production of Milo and Cheerio cereals, both of which we had previously imagined were manufactured by Oompa Loompas. Also in Babelegi, the Creamy One will be putting up a scarcely less modest Maggi plant for a further R155large, and together over 200 permanent jobs will be created. This shortly after the acquisition of R106million and upgrade of a soy processing plant in Potch, which will increase the production capacity of Nestlé’s non-dairy creamers and assist them in their mission of providing punters with quality, affordability and nutrition all in one delicious package.
Comment: Ta v. much for the investment, that Biggest Global Food Business.
I-Net Bridge 03/02/11
Last year Adcock acquired 66.2% of Ghanaian drug manufacturer Ayrton; this year further expansion on the continent is planned. The company has 183 drugs currently registered in Africa, with plans for another 59 this year, and 500 planned for 2015. West Africa is blessed, if that’s the word, with an expanding population and a growing economy – Ghana, for example, will be the fastest growing economy on the continent this year, and this rise in prosperity means a growing market for non-traditional muthi. Adcock is well-poised for further acquisitions in deepest darkest, with a war chest of R1.4billions to hand. Comment: Prescription drugs are a growth area for this dynamic business.
Business Report 09/02/11
Unemployment fell by 1.3% to a still-crippling 24% in the fourth quarter of the year 10, according to the pipe-smoking Edwardian gentlemen over at StatsSA. The Quarterly Labour Force Survey reveals that 157,000 jobs were added over the period, 120,000 in the formal sector and the rest in the informal. And in some tricky maths, government job creation must have spanned both sectors, with community and social services gaining 148,000 jobs, and casting some cold grey light on the issue of “decent employment”. And here is where statistical definitions come into play: the number of unemployed persons declined by 259,000, assisted in this regard by the increase to 117,000 in the ranks of people no longer seeking work. The worst-hit sector in the quarter was agriculture, which lost 13,000 jobs.
Comment: A worrying trend in a time of looming food insecurity.
In a project with Eskom, where the electricity provider changes magnetic ballast boxes on fluorescent lighting in 97 stores with electronic ones, the Big Blue, 17% of whose stores’ electricity bill comes from lighting, saved a not unimpressive R1.5million per annum, which is what we call a result.
Tatler Reporter 31/01/11
Le grand Bleu has once again swept the boards at the Product of the Year competition, where eager Nielsen beavers interview 5,000 people about their fave brands. Unilever products – like Axe, Lux, Sunlight washing powder, Lifebuoy and Rama – won in twelve different categories. 2 billion times a day, you will be interested to know, somebody somewhere pops the figurative cap of a Unilever product.
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