Massmart  Let Cosatu eat pasta, soft boy!

10 things we didn’t know before the Competition Tribunal met to discuss the Walmart/Massmart merger:

1. Grant Pattison is a big softy. Who survived five years under Mark Lamberti and heads up the youngest and toughest team in retail.
2. One of the reasons it’s called the Competition Tribunal is because your competitors are allowed to come and dish the dirt on your business.
3. If you buy pasta from Shoprite, it might have come from Turkey.
4. Shoprite can close down a pasta factory in three months flat. You wouldn’t even know that it had been there.
5. Walmart was chatting to two other retailers, but Massmart won.
6. If Massmart stock something from China it’s because you, our valued customer, really, really wants it.
7. The Competition Commission absolutely does not think the merger should go ahead. Er, unless you accept some conditions. Like um, I know, I know – give some people their jobs back. Or something.
8. Cosatu doesn’t think R100million in supplier development cash is that big of a deal.
9. South Africa’s economy is not for sale.
10. Walmart may still bail, you see if we don’t. We were looking at two other countries, you know.

Our Man in the Tribunal 16/05/11

SPAR  Land ahoy!

SPAR delivered, as the expression goes, a solid set of results for the six months ending March 2011, with turnover up 9.1% to R19.1billions, and operating profit up 4.1% to R706million. Captain Hook is cautiously optimistic about likely trading conditions for the rest of the year, although factors like rising fuel and utility prices will continue to put the squeeze on shoppers, he believes. He is also of the view that the business in turn needs to be squeezed harder to deliver the sorts of results that happy punters have come to expect from the business. For example, while warehouse volumes were 6.9% up for the period in question, costs were up 16.8%, due in part to the rising price of getting goods to stores, but also because of the 11 stores SPAR has bought back from members in order to keep the footprint up, and all the bills associated with running those. And then there was the move of Build it (which grew turnover a whacking 21.4%) into wholesaling, itself a not inexpensive exercise.
Comment: A business quietly continuing to deliver the goods, quite literally, as it always has, in some tough trading conditions.

Supermarket.co.za 11/05/11

Pick n Pay  Comings and Goings

A sad farewell to merchandise director Kevin Korb, who announced his retirement over at the Big Blue last week after 30 years before the mast, man and boy, having started as a spotty trainee manager, and enjoying secondments to Sainsbury’s and Franklins in the course of an illustrious career with SA’s foremost retailer. His ample shoes will be filled in the interim by Peter Arnold, currently head of Fresh Foods and the driving force behind the opening of the Hurlingham flagship, broadly acknowledged to be the business as far as best practice goes. In other PnP news, Bakar Jakoet has officially taken over from Dennis Cope as CFO after a respectable handover period, and Jeff van Rooyen has been appointed as an independent non-executive director on the main board.
Comment: Comment: Regarding Mr Korb, a sad farewell to one of the true gentlemen of the industry from Trade Intelligence – he has been a friend to the business.

Tatler Reporter 18/05/11

Coca Cola  Dr Pemberton’s Patented Headache Preparation

Everyone’s favourite fizzy brown liquid has been with us for 125 years, and in celebration, here are some fun facts for the troops:

The stuff was invented on 8 May 1886 by one John Pemberton, during America’s golden age of quackery, as a cure for headaches and general listlessness, and the original formulation probably contained a sprinkling or two of the old Bolivian Marching Powder. It originally sold at the less than brisk rate of 90 glasses per day, but within years of being bought by Asa Chandler and subsequently mass-produced, it began to enjoy understandable popularity across the United States. It found its way to Europe in 1919, but has never been known as le Coca Cola. It currently enjoys a 17% share of the global market and is the world’s most popular soft drink. The original recipe is still, apparently, kept under lock and key. It is the only thing which makes cane spirits even remotely potable.
Comment: Comment: You should try some. It’s great!

AFP 09/05/11

SABMiller  Have another!

There is, you will be relieved to know, room for further consolidation on Planet Beer, according to SABMiller CFO Malcolm Wyman, who is, let’s face it, probably the guy to ask. According to the Malcster, as we beery guys like to call him, there are some markets ripe for consolidation, a term which here means “buying everything in sight until the competition boys put a stop to it”*. One such market would be China, where according to reports some guy in Guangdong province still makes his own beer in a bucket for family consumption on special occasions. And the pin-striped party sharks over at Goldman Sachs believe that Aussie crowd Foster’s and French crew Castel could be next on the list for takeover.
Comment: Comment: Consolidation in China at least, it is believed, is necessary to see profits growing apace with volumes.

*with a nod of acknowledgement to Lemony Snicket

Business Day 13/05/11

Retail sales  Not too shabby

Retail sales rose a pulchritudinous 5.1% year-on-year for March, with February’s number revised down a natz to 5.5% according to the entrail-readers and cloud-interpreters over at StatsSA. The largest contributor to the 5.6% increase in the first quarter of the year was general dealers, who always remind us of those guys with mutton 0-chop sideburns in Saturday morning westerns with 5.4%; retailers in textiles, clothing, footwear and leather goods, with 5.1% and all other retailers, with 6.2%. The highest annual growth rate was recorded by retailers in household furniture, appliances and equipment, with 11.8%; general dealers, with 8.0%; retailers in pharmaceutical and medical goods, cosmetics and toiletries, with 5.6% and all other retailers, with 5.5%.
Comment: So that’s alright, then.

Timeslive 17/05/11

Nestlé  An unholy row

The Department of Health on the one hand and the Church of Rome and Nestlé on the other are unlikely combatants in a brouhaha about whether or not churches in the Eastern Cape are entitled to sell (at a small price) cans of baby formula marked “State use only – not for sale.” This, argues Nestlé, is a preference and not an obligation of their contract to supply formula to the state.

The Times 10/05/11

Chicken  Set to soar

The price of chicken is about to take flight to the tune of 15% by the end of the year as the price of maize and other animal feeds heads north. The local industry is worried stiff about this, as the strong rand is likely to make imports even more competitive than they currently are – about 16% of locally consumed chicken comes from Brazil.

Business Times 15/05/11