School of Retail
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THIS ISSUE: 04 Jun - 09 Jun
Guess how much Clicks made selling medicine out of its 260 in-store pharmacies last year. Bwaaaanhp!! Wrong! It was in fact zero. Zip. Nada. But is Mr Kneale worried? He is not. Pharmacy, you see, is all part of Clicks’ cunning plan to get punters into the shops where, the thinking goes, they will spend lavishly on hairbands, hand cream and toasters, categories where it is much, much easier to make a buck or indeed an honest British pound. A good measure of the success of pharmacies in driving footfall is return on equity – from 17.7% in 2006 before the strategy proper kicked in to 55.8% today. Pharmacy helps Clicks differentiate itself from the big supers whose personal care departments are its natural competitor; buying power is how it differentiates itself from the rest of the embattled pharmacy sector. It is able to mark up medicines by 17% compared with the maximum permissible 30% that most of the little guys need to survive. Comment: A hugely successful, flexible and responsive model.
Financial Mail 02/06/11
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Chairman Ackerman the Younger has picked up the family cudgel and is swinging it as liberally as his old man used to back when Helen Suzman was the only prog in parliament. Gareth Ackerman has become the first prominent business leader to slate the new Protection of Information Bill. What, you may ask, does the act have to do with the price of eggs? Or indeed washing powder, rusks, assorted general merchandise and specialist departments? It is Mr A’s contention that without the assurance that information is not being manipulated it is virtually impossible for the private sector to make the long-term, strategic investment decisions essential for its survival. He also believes that the private sector does not lock horns with government enough – although he himself has done so now on a couple of occasions – weighing in sternly against doing anything about the strength of the rand most recently. Comment: Of course it may be argued that Annual Reports, where information is freely manipulated and routinely hidden, make it pretty darn difficult for the rest of us to make long-term, strategic investment decisions...
Tatler Reporter 02/06/11
But what are Walmart/Massmart actually going to do? We’ve read the fine print so you don’t have to, and as far as we are able to tell, they plan to:
Tatler Reporter 08/06/11
Kraft Foods South Africa is leading the charge among major manufacturers in the Fairtrade movement, achieving Fairtrade certification for its plain variant in the Cadbury Dairy Milk range. Fairtrade, as the bangled granola crunchers among you will already know, is a certification system designed to ensure better working and living conditions for small scale farmers, farm workers and communities through fairer prices, better labour conditions, community development and environmental sustainability. Practically, this means that all the cocoa used in the production of the variant in question has been bought from certified Fairtrade producers, through a partnership with cocoa farmers in Ghana and the Ivory Coast.
Comment: Although there is the sticky issue of the magnificent lowland gorilla they exploited in their viral campaign a couple years back…
The Big Feller has embarked upon a war of words with Gauteng’s Economic Development MEC Qedani Mahlangu, who has accused SABMiller among other manufacturers, of selling beer to unlicensed taverners. This, she assured a media briefing in Joburg this week, was a fact substantiated by SABMiller itself – something which in itself SABMiller hotly denies. In a wide-ranging discourse, she mentioned that all 30,000 licenses already granted in Gauteng would be reviewed, as would the entire process by which the big boys (and here she mentioned Pick n Pay, SPAR and Shoprite by name) were granted licenses while small township operators were not. All retailers, she said, would “probably” be barred from selling booze on Sundays, and outlets selling alcohol in proximity to schools and places of worship would be closed down. Comment: To which our only response can be “Good luck, Ma’am”.
Business Day 31/05/11
600 US businesses are currently active in the RS of A, a number which, says US Assistant Secretary of State of Economic, Energy and Business Affairs Jose Fernandez, is “not enough.” He does, however, believe that both the US Government and American companies are increasingly eager to pursue opportunities in Africa, as it grows to a $2trillion GDP region by 2020, with African punters predicted to increase their spending from $900billion annually to $1.4 trillion. While the big story in Africa is currently resources, these contribute only 24% to GDP currently, with the balance coming from wholesale and retail, telecoms, transport and manufacturing. The upside notwithstanding, US investors remain concerned about instability and corruption, which adds an average of 20% to the cost of doing business. Comment: And of course the lions in the back garden.
Engineering News 06/06/11
Has anyone else heard rumours of merger discussions between two of the world’s larger consumer products businesses, whose names it would be irresponsible to mention here?
Xxxx Xxxxxxx 08/06/11
Shoprite’s share price fell 3.4% on the news (analysts speculate) of Walmart’s van-Riebeeck-like* arrival on these bleak and windswept shores. Given Shoprite’s performance in recent years this must surely be seen as a momentary knee-jerk reaction.
*Thank you Zapiro
Mohammed Abdool-Samad has been appointed as FD of Illovo Sugar from 1 September. He joins the sugar barons from Anglo American Thermal Coal, where he is currently FD, and hopes, no doubt, that next year he will have something better to report than this year’s unseasonally disappointing results.
Chairman Ackerman the Elder has been awarded an Honorary Doctorate in Education by UNISA, for his efforts in the illumination of young minds through inter alia an annual contribution to the UNISA Foundation and the Ackerman Family Education Trust, which provides around 60 students a year with scholarships.
Tatler Reporter 06/06/11
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