
THIS ISSUE: 21 Apr - 28 Apr
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Clicks Clicks and mortar, and Clicks
Somehow, we’ve never managed to come up with a nickname for Clicks, which is remiss of us, and we apologise for that. But this does not alter in any way the fact that Clicks has earmarked R455million of the FY2017 budget for growth, planning to splash out on new stores, the expansion of existing stores and some of this information technology (IT) everybody is raving about. Next week, the 500th Clicks opens at the new Mall of Africa, and the plan is to grow inexorably at the rate of 20-25 a year until 600, and then, presumably, to keep going. The focus will remain on South Africa, says Mr Kneale, although he confesses that the stores in our neighbouring geographies are doing just fine, thank you very much. All this by way of fleshing out the interims: turnover up +13.4% to R12.1billion, and operating profit up +14.4% to R732m.
Comment: Never in his now-substantial tenureship have we had occasion to doubt the quiet brilliance with which Mr Kn. (The K is silent) runs the group.
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Cash and Carry Cashing in and carrying on
Turning their attention away from hardworking editorial consultants, for a change, SARS have cast their gimlet eyes over the doings of 100 or so Cash and Carry stores in Gauteng, and do they like what they see? They do not. It turns out that when you are conducting thousands of cash transactions every day, and keeping sketchy records thereof, the opportunity arises for you to squirrel a fair bit of the green stuff away rather than declaring it to The Man. About 50 of the businesses inspected were not in full compliance with their tax requirements, in terms of registration, filing, payment or presumably, a combination of all three. Various tax audits have been carried out on offenders, raising taxes on a further R600million, the existence of which SARS had hitherto been unaware.
Comment: Quite right too. Nice work SARS. Now about that refund for our, ahem, business trip to Bazaruto…
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Shoprite Generally speaking
Stop us if you’ve heard this one before, but in FY2015, Shoprite bought goods worth R90.1billion from suppliers, and sold these for a gross (and indeed handsome) profit of R23.5bn. It’s this simple equation, if you will, that makes Shoprite the biggest retailer in Africa and here in the Beloved Country, able to achieve vast economies of scale and spread the wealth around, both to the suppliers in question and a number of ancillary sectors, like mall developers. But you couldn’t achieve this without the systems in place to back you up, and these The Big Red One has in plenty: a network of DC’s all powered by the latest in supply chain IT, and the experienced professionals to keep the system humming along. And also, the loyalty of the suppliers from whom they are getting such sweet deals.
Comment: OK, supply chain 101 in a slow news week. But you never did stop us…
MANUFACTURERS AND SERVICE PROVIDERS
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Nestlé Café society
In these days of bottled water and babyfood, and Vidas and rumours of Starbucks, it is too easy to forget that we once knew Nestlé as a producer of fine granulated coffees. And those glory days may yet return. Nestlé has just completed a R1.2billion extension to their venerable Estcourt plant, and will shortly commence export of instant coffee to the rest of Africa. For an insight into the arcane processes involved in bringing (almost) everyone’s favourite pick-me-up to punters, this is what the wedge was spent on: the construction of a waste water treatment plant‚ a new coffee plant‚ a new coffee processing plant‚ upgrading of the existing coffee processing and the installation of a state of the art coffee drying plant.
Comment: The plant has also brought 490 much-needed indirect and permanent jobs to the Paris of the high plains.
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Country Bird Runaway Bride
Country Bird Holdings has been given the nod by its shareholders to buy a stake in rival Sovereign Food Investments, so the business should shortly be in Sovereign hands. Well not entirely. One small village of Sovereign shareholders still holds out against the invaders, and a court order is due this week which will determine whether those 11% of dissenting shareholders can vote at the AGM. It is suspected, but denied by the board, that the dissenting bloc comprises members of Sovereign’s contentious empowerment scheme, which apparently is open to executive management but thin on actual broad-based empowerment. Country Bird has continental ambitions, with plans to expand its operations in the seven African countries where it currently has footprint. Vis-à-vis Sovereign, Country Bird believes that there are synergies with Sovereign’s lucrative and steady food-service business.
Comment: Reading between the lines, it does not sound to us like Sovereign is ready to go demurely up the aisle. Although this could be all part of the negotiation.
TRADE ENVIRONMENT
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Innovation The shock of the new
South Africa is not investing enough in innovation, don’t ask us, ask Naledi Pandor, Minister of Science and technology, who has pointed out that the Department’s budget of R7.43billion is down marginally for the year, and that R&D spend as a percentage of GDP is at 0.76%, only half of what the government has targeted for 2019. As Pandor points out, countries (and businesses) which invest during a down cycle are more competitive when their fortunes turn. Pandor suggests that there are areas of government where the budget allocated is not being spent, and that this money could be diverted to science, technology and innovation. It’s not exclusively – or even predominantly – a government problem though: R&D investment in the private sector fell steadily on the five years through 2013. This news comes in a week in which it was announced by StatsSA that the youth of today are more poorly educated than their parents.
Comment: Creeping anti-intellectualism is a global crisis (President Trump, anyone?) and a threat to the future. Please listen to Pandor, employ yourself some free-thinking boffs and put them to work.
IN BRIEF
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Dis-Chem Needles on wheels
Plucky Clicks challengers Dis-Chem are always on the lookout for things to differentiate themselves from both the bigger and smaller players, and here is one, by golly! Every year, you intend to get your flu shot, and are reminded of this only as you are in the very throes of a 39.5% fever with a headful of cement and a desk full of deadlines. This year it’s different: simply click open your Uber app, as you would at the tail end of a large night out, but navigate to UberHEALTH instead. A couple more moves, and a capable nurse will be en route, jova in hand, to sort you out for the season. All thanks to Dis-Chem, and yours for only R100.
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Woolworths A peace of their mind
Greenpeace Africa have ranked SA’s retailers according to their renewable energy vision, in a report entitled ‘Shopping Clean – Retailers and Renewable Energy’, and no surprise, Woolies tops the list, albeit at only 4 out of 10, Greenpeace being generally unimpressed with the progress out industry has made towards clean energy. On this score we’d beg to differ – we believe that progress has been rapid, investment significant and by and large the vision clearly articulated.