THIS ISSUE: 10 Nov - 16 Nov
Bleak times prevail in the Beloved Country in the lead up to Black Friday, which according to some pundits is likely to be more muted occasion for both spending and indeed discounting than in past years. But there are good things to report nevertheless – SPAR brings home delivery to underserved areas, Tiger brings fortified breakfasts to SA’s needy scholars, Massmart makes an important appointment, and punters give the nod to more sustainable packaging. Enjoy the read.
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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SPAR Service delivery
As we first mentioned in our e-commerce report a couple months back, SPAR2U, SPAR’s contribution to SA’s burgeoning home delivery scene, is venturing into new territory in its partnerships with such operators as KasiD and Delivery Ka Speed, which will see the rollout of SPAR2U services in Tembisa, Kempton Park, Kaalfontein, Ivory Park, Soweto, Mamelodi and Glen Marais in the case of the former and Mamelodi and Hammanskraal of the latter. “A significant portion of South Africans reside in townships and should have the same access to the ease and convenience of online shopping and home deliveries as residents in city areas,” says omnichannel executive Blake Raubenheimer. The cost savings that can be achieved by neighbours pooling their home-delivery orders may also encourage people to diversify their food choices. In other SPAR news, Damon Harry, ex of Country Road, has been appointed as Divisional Managing Director for SPAR KwaZulu-Natal, replacing Angelo Swartz, who was recently appointed CEO for The SPAR Group.
Comment: But back to that home delivery news – an excellent initiative from SPAR, in a highly contested space.
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Pharmacy Bad chemistry
Things are heating up in the gleaming aisles of South Africa’s two major pharmacy chains, as Dis-Chem and Clicks go head-to-head in a battle for footprint and share of wallet. Dis-Chem has announced that it intends to open 140 stores in the next three years adding 137,000m2 to its retail footprint, for growth of around +50%. Clicks, with 885 pharmacies trading, is aiming at 1,200 in the longer term, and footprint growth of +30%. Dis-Chem CEO Rui Morais is talking a good game about the business’ prospects: “We drive higher foot traffic and our trading densities are the highest in the country,” he says. Dis-Chem is well-represented in its Gauteng home base, while Clicks is more dominant in the Western Cape; Dis-Chem is currently eyeing opportunities in 300 sites where Clicks is already established. It’s not just in the physical realm that Dis-Chem is looking to expand however – the business already offers a health insurance product and predicts that it will expand its financial services offering in time.
Comment: Clicks’ footprint lead still appears unassailable, but there is room in the market, it seems, for a threatening contender.
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In Brief Licence to thrill
An appointment of some significance at Massmart, where Srividya Pandya has assumed the position of new head of e-commerce. She comes to the business via parent Walmart, where she served as vice president of strategic integration for Walmart US and headed the company’s global omnichannel efforts. Previously, she did a spell as senior fashion vendor manager at Amazon – which should come in handy as that e-commerce behemoth waddles ashore in Table Bay. To Shoprite next, which is driving footfall (as it were) by offering punters the ability to renew their vehicle licence online and pay either online or in person at the Money Market counter in any store, for the market-beating price of R185. Finally, hype around the Woolworths Restaurant Awards is reaching fever pitch with the ceremony set for the 19th at the Grand West in Cape Town, where the Special Award winners and star-rated restaurants from the shortlist will be revealed.
Comment: Claiming the role of arbiter of culinary excellence is a very smart move for SA’s premier vendor of quality comestibles.
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International Retailers Not a sausage
Slightly belated to these pages, but in Kenya, Carrefour has launched a Women in Retail Council to champion diversity and inclusion in its organisation, providing female staff with mentoring, career guidance, advice, and in-depth retail industry product knowledge. It also targets scaling up women’s involvement in its operations, with 23% of managerial positions across its 20 stores countrywide currently filled by women. And here’s one for the “Nice idea, moving on” category: German discount supermarket Penny, has run a promotion, of sorts, in which customers are asked to pay a little more for items such as meats and cheeses to reflect their “true cost” on the environment and people's health. At all 2,150 of its branches, the supermarket raised prices for nine products based on calculations from two German universities, taking into account costs related to climate, soil, health, and water use. Plucking an example from the air, Mühlenhof wiener, a brand of sausage, increased from €3.19 to €6.01, an +88% rise. Other cheeses and meats spiked northwards to the tune of +60%. Proceeds from the initiative will be donated to a local agricultural project which supports struggling family-run farms.
Comment: Important work. But it will be a long while before shoppers will be willing to pay the planetary cost of what they consume.
MANUFACTURERS AND SERVICE PROVIDERS
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Tiger Brands Digging the fortifications
Stepping up to the plate this week, the Tiger Brands Foundation (TBF), which is championing the promotion of nutritious breakfast alternatives, including superfoods, as a vital component of maintaining a balanced diet. “We believe that by incorporating superfoods into our meals, we can provide essential nutrients that support overall well-being,” says Foundation ops manager Karl Muller. Accordingly, TBF has redoubled its efforts to provide nutritious alternatives to school-aged children through its in-school programme, in which it will continue to serve up the fortified porridge it always has to children in need of nutrition they might not be getting at home.
Comment: Fortified cereals are indeed a critical component of strategies to meet the nutritional needs of young South Africans – and the work of such bodies as TBF is equally important.
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Packaging Paper rocks
The results are in for the Paper Manufacturers Association of South Africa’s (PAMSA) annual Trend Tracker Survey, in which 10,000 punters from 16 different countries, including our own, were grilled about their packaging preferences, and guess what? Paper. As shoppers migrate more rapidly to online ordering, 58% of respondents said they prefer products ordered online to be delivered in paper packaging, while 56% are actively taking steps to increase their use of paper packaging. In 10 of the 15 attributes – including better for environment, better information about the product, and easier to store – paper and cardboard scored the highest among South African consumers. A full 77% of South African consumers said they would actively support retailers who offer a packaging return system, while 60% would buy more from retailers who remove plastic from their packaging.
Comment: Nobody – rich or poor, urban or rural – is happy with the mess we’ve made of our world. And increasingly, we’re voting with our wallets. The manufacturers of consumer packaged goods have an urgent and massive responsibility to meet our needs.
TRADE ENVIRONMENT
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Black Friday Bleak Friday?
Black Friday, which marks the occasion in the US when after the first Thanksgiving, the pilgrims attempted to flog inexpensive cookware to the Wampanoag people who had just fed them on turkey and corn, is upon us again. And this year it seems to be looking a little leaner than it’s been. While inflation has eased somewhat, South African shoppers are still battered by a combination of rising interest rates resulting in high debt servicing costs; poor income growth; and slow GDP growth. “It is not a wildly exciting time for consumers,” says FNB senior economist John Loos, with enviable understatement. “What is also questionable is how much retailers can give in terms of good discounts. Retailers have been under pressure in recent years and are also suffering high inflation on the prices of their products and high operating costs.” He believes that while the occasion will see a rise in sales, it will not be as strong as it was last year.
Comment: But don’t just take his word for it, take ours and that of our friends at Chirp too by reading the fascinating results of our online survey on how South Africans view this year’s Black Friday.
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