
THIS ISSUE: 03 Mar - 08 Mar
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Pick n Pay A solid half century
Many happy returns (is that something you’d wish a retailer? Doesn’t sound right) to Pick n Pay, who turned a sprightly 50 last Wednesday amid a flurry of red, white and blue confetti. Pick n Pay, as you know, began life as a chain of stores purchased by a Mr. R. Ackerman plus fifty small investors for R620,000 back in ’67. Click forward a half century and where are we? Good coverage across the republic, a respectable footprint in Africa, centralised distribution at last and the scars from the Aussie venture faded. An Ackerman at the helm, and a couple more behind the scenes, some really nice new generation stores and turnover last year of over R72bn.
Comment: “Winning isn’t everything – it’s the only thing” as Chairman Ackerman the Elder is fond of remarking, but coming in among the best of them is pretty good too. And who knew that Pick n Pay was a Pisces?
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Shoprite Nommer asseblief
Up north, in Zambia, Shoprite have gone into partnership with a little outfit called Vodafone, which provides the locals with those little wireless telephones everyone seems to be so keen on these days. Vodafone will be setting up store-within-a-stores in several Shoprite supers, which will presumably benefit from the additional footfall. For Vodafone, which is just setting up its networks in Zambia, it will be an opportunity to sell some phones without having to splash out too furiously on retail infrastructure, as well as to grab some drive-by Shoprite trade. Vodafone Zambia CEO Lars Stork is apparently well-chuffed with the arrangement, although really we put this line in only so you could rejoice in the splendour of his name.
Comment: What’s Shoprite’s long game with Vodafone? We’ll keep our eye on this one.
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Woolworths … or we could just stop eating them for a bit?
Kudos to Woolies for their latest attempt at responsible retail, which this time involves selling only tuna which has been individually caught using the Greenpeace-approved pole and line method. This has secured for the Dapper One a Marine Stewardship Council (MSC) certification for the tough but tasty fish, which Woolies sell in cans under their Fishing for the Future initiative. Only 16% of all tuna caught globally is caught by this method, which ensures that only fish of certain maturity stay on the hook, and which saves the lives of other marine creatures, such as turtles and dolphins, which may be swept up in nets or snagged on long lines. According to Greenpeace, the world’s fishing fleet is 2.5 times too large to be sustainable, so Woolies’ efforts, while commendable, are a drop in the proverbial ocean.
Comment: It is truly excellent, though, that they are taking the trouble.
MANUFACTURERS AND SERVICE PROVIDERS
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Clover Everything’s going to be all white… oh, shut up.
We’d love to bring you better tidings from the rolling hills and verdant pastures of our dairy-producing regions, but sadly – no. Clover’s interims were not what one would have been hoping to expect from an innovative and agile producer of milk products for the masses. Revenue up a scant 2.1% to R5.1bn for the six months through December, while after-tax profit was down 9.6% to R198m, on the back of rising raw milk prices due to the drought and in the face of consumers who were frankly unable to afford Clover’s products. Sales of raw milk halved to R7.76m from R13.48m in the same period. Clover say that the supply of raw milk is starting to recover, but slowly, even as they launch a new business – reported here a week or so ago – to enable milk producers to receive a better price for their frothy alabaster bounty.
Comment: Someone give us a nice cup of warm milk and send us upstairs.
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Unilever We’ll take the rap on the knuckles
Last year you will recall, Unilever and a Malaysian outfit Sime Darby Hudson Knight (which was apparently named by the same crew who hand out all the Hanks and Larrys to call centre staff) were done by the Competition Commission for cartel conduct. To wit; and heretofore, they had on or about the aforementioned date divided markets by allocating the manufacturing and supply of bakery and cooking products throughout the country, viz. South Africa. Sime Darby settled with the Comish, as we affectionately call them in the hopes they don’t come after us, while Unilever were ordered to pay a R35m fine for anticompetitive behaviour and build a new R135m packaging and warehousing facility. Now, it seems the Commission is having second thoughts of the worst sort: they’re seeking an order from the Competition Tribunal declaring that the duo contravened section 4(1)(b)(ii) of the Competition Act. If it gets the nod, it could see Unilever liable for an administrative penalty equivalent to 10% of its annual turnover.
Comment: Just don’t do it people! Just, just don’t!
TRADE ENVIRONMENT
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Research You get what you pay for
According to our friends at Nielsen, 92% of us are happy to pay extra for a product that promises better quality. Fully 91% will fork out for something that offers better functionality, and in good news for Woolies (see above) 86% will get behind a brand that is environmentally responsible, and 77% behind one that is socially responsible. And all of this despite the fact that only 50% of the population say they are better off than they were five years ago. The Nielsen Global Premiumisation Survey, in which you will find such choice nuggets, reveals both the how and the why of escalating demand for the good stuff in our beleaguered economy. Some of it has to do with social mobility and its trappings. Some has to do with the very South African belief among people with limited income that it’s better to invest in something that will last than buy a cheaper version twice.
Comment: Powerful insights, and worth delving into. For starters, are we talking groceries here? Or just shoes and cell phones?
IN BRIEF
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SPAR The round-up
Of 63 SPAR workers detained under suspicion of being illegal under orders of the Minister Of Public Enterprises Malusi Gigaba, 40 have returned to the registers and the forklifts after showing their entirely legitimate papers. Some of the rest, it seems, might have invalid documents, although this is of course not SPAR’s fault. It all seems to be a bit heavy-handed to us, especially in this time of xenophobic violence.
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AVI Snack attack
Those AVI interims then: revenue up 11.6% to R7.13bn with operating profit up 8.1% to R1.41bn. This as rising raw material costs and a weaker rand dragged upon its performance. Entyce and Snackworx did pretty well by all accounts, with the fashion brands performing satisfactorily in tight conditions.