School of Retail
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THIS ISSUE: 22 Apr - 05 May
That poor bloody infantryman in any retailer’s army, Private Label, has been doing sterling service for Clicks of late, achieving 20% of sales and well on its way to a target of 25%. Clicks’ housebrands include “Clicks Essentials” ranges in beauty, hair, skincare, healthcare and home, while the vast number of brands over which it has exclusive licence on these shores include Max Factor and Boots No 7 in cosmetics, Weetol in supplements, Oh So Heavenly in skincare, King of Shaves in gentleman’s razors and Safeway in small white goods. A big success at the moment as Clicks cements its position as SA’s biggest pharmacist is front of shop, where private label sales have already hit 25.9% and are gunning for 30%.
Comment: For all sorts of other valuable Clicks info, you should check out our Trade Profiles here.
Fin 24 03/05/11
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What’s the opposite of poker face? Whatever, it’s a condition to which Mr Badminton over at the Big Blue, is a martyr:
On Longmeadow: “Last year it cost us R100million more than expected.”
On centralised distribution: “We should have started when Shoprite did.”
On various changes implemented during the 2011 financial year: “Perhaps we bit off more than we could chew.”
Despite Pick n Pay’s current woes, Mr B remains quietly upbeat on prospects down the line aiming at “an organization meeting world best-practice standards” and achieving a more Shopritely margin in the near future. Some of the changes planned to achieve this include a new buying strategy with product specialists in place, and a swifter rollout of stores. Comment: Yes he can!
Business Report 21/04/11
nkosipeter06 May 2011 (10:04:36 AM)PnP are clueless when it comes to supply chain management. This will take years to learn even if they have the will to do so.
The dramatic developments over at Metcash have cast some light on the usually under-the-radar Big Wholesale sector. Metcash delisted in 2005, at which point it was turning over R16.5billion annually, R3.5billion of it in a little place called Zimbabwe. Extrapolating from this, irascible analyst Syd Vianello suggests that with the disposal (if successful) of the franchise division to Shoprite, and the closure of approximately half the stores which according to CEO Peter Dodson were poorly located and a drain on resources, Metcash is probably doing about R5billion annually at the mo. And this, says Uncle Sydney, is going to seriously constrain its buying power. How does Metcash stack up against the competition then, in its currently reduced state? Masscash is doing about R20 billion according to those in the know, and previous Dodson brainchild ICC about R8billion. The man himself believes that hybrid will be the salvation of Metcash – at around R8m for 3500m2, a hybrid shop is about R7m cheaper to open than a retailer of the same size. Comment: You list, we’ll buy.
Financial Mail 21/04/11
Tiger Brands has kindly offered to take off Unilever’s hands that venerable brand Status, which we of the more sophisticated persuasion used to spray liberally about the bottom changerooms after PE, circa 1981, and which does an estimated R100m in sales every year. This will put Le Grand Bleu to rights with the Competition Authorities, who have been sniffing about after anti-competitive practices since the international Sarah Lee acquisition and found too many deodorant brands in Unilever’s gym bag. Unilever’s pre-acquisition deos included Axe, Shield and Dove, with Radox and Status coming over from S/L. No mention on these shores of Sanex, which as you know was the reason for the merger in the first place and which Le Competischlike Authoritazziones in Europe forced Unilever to get rid of before the ink was dry on the purchase and sale agreement. Comment: So it turns out you can buy Status…
Business Day 28/04/11
Not only do elephants not drink the stuff, apparently humans hardly do either. It has emerged that of every 1000ml of Amarula Cream you quaff in the boma after your warthog fillet, only 30ml is actually distilled from the fruit of the marula tree, while the lion’s share, as it were, is made up of wine, cream and good, honest cane spirits. The formulation of Amarula Cream has been the subject of much to and froing between SARS and Distell over the classification of the drink. SARS holds that Amarula cream is a spirits-based drink and subject to a higher tariff, while Distell, after a spot of reformulation, wanted it classified as a wine aperitif. The changed classification would have saved Distell R28bar a year had they been successful – which, after a four year legal battle, they weren’t.
Comment: What really annoys domestic afficionados, though, is that only the local stuff includes wine. The export version is made with only spirits.
Business Day 04/05/11
drink amarula no more05 May 2011 (04:25:17 PM)The export version also tastes a great deal better than what they're pouring down our throats.
A little list for you, harking back to the glory days when your Tatler was a weekly 2500 word whopper read by princes and prime ministers alike, and we used to do this sort of thing all the time. It’s the top eight of the Empowerdex Food and Beverages Index for BEE, and it’s pretty telling stuff:
If one Professor Louw over at Agribusiness is to be believed, food inflation could be heading northward to the tune of 15% by the end of the year, in line with global trends, which have seen it hovering in the mid-to-late 30s in recent months while we’re still in the low single figures, climbing for 3.7% (Feb) to 4.2% (March). The good professor believes that the triple whammy of fuel, electricity and toll fees will soon find its way into our larders. In the meantime, we’re being screened from some of its worst depredations by pleasing harvests in some notable agricultural commodities, although it should be remembered that we remain a net importer of wheat, and that things on the prairies of the world are far from certain these days, climatologically speaking. Comment: Get used to switching starches is our advice, and if you’re a government, have a plan for the poor, who, as you may have noticed, are already angry.
Business Report 19/04/11
In Namibia, an application by the Competition Watchdog for all sorts of conditions of ownership and the prevention of job losses in the Walmart/Massmart deal has been overturned in court. So the final hurdle remains our Competition Tribunal – although Mike Duke anticipates that a breakthrough here is imminent, and believes that tremendous opportunities are to be had for the plucking in this great continent we call home. What’s that sound? Oh, it’s the recent dooomsaying analysts, wringing their hands, rending their garments and crying aloud “We were wrong!” Possibly.
Fin 24 29/04/11
A group of local businesses in the presumably arid little Namibian town of Eenhana (which, we are told, is Himba for “one horse”) are attempting to stop a Shoprite from opening there without some sort of BEE/JV-type approach. They are, apparently, motivated by a starry-eyed vision of how empowered retailers are in South Africa, and would like a piece of the (affirmative) action.
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