
THIS ISSUE: 29 Sep - 05 Oct
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Pick n Pay Mad Dogs and Englishmen
Here’s a biggie: Pick n Pay have just announced the appointment of their new CEO. Richard Brasher joins the Big Blue from Tesco, where he enjoyed 26 illustrious years prior to becoming CEO in March 2011. His departure from the group was announced a year later, after months of rumours of strategic differences with the Group Chief Executive Philip Clarke. Previously, as group commercial director, he created Tesco’s international sourcing operation and was responsible for the company’s entire supply base, transforming Tesco’s non-food operation and taking a lead role in the development of the private label strategy. Significantly, he grew the Tesco Clubcard into the leading supermarket loyalty programme in the UK. He has a reputation for being tough on prices and tough with suppliers.
Comment: A bold appointment by Pick n Pay, at a time when boldness seems to be what’s required.
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Shoprite In Namibia, Life is cheap
Wait…here’s one, here’s one! Shoprite is selling life insurance! That’s right, now you can literally insure your entire life at Shoprite…what’s that? Oh, right. Shoprite in Namibia, that is, where The Big Red One has entered into, what we in the industry call, a “joint venture” with insurance crowd Trustco, and get this, are offering free cover to any punter who spends more than N$20 a pop and is in possession of a cellphone. Seems a bit too good to be true, but there you go. It’s very much in keeping with Shoprite’s drive to provide a one-stop shopping experience, and to reward loyalty with stuff, although not under the aegis, as it were, of a formal loyalty programme.
Comment: Wonder how it would fly back home, where people seem to die more and also there are more of us.
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Woolworths Now we know what the WW in the WWF stands for
A week after Woolies hit these pages for being the only SA retailer on the Dow Sustainability Index, The Dapper One has been acknowledged with its third World Retail Congress Responsible Retailer of the Year Award in just five years, up there with co-winner Marks & Spencer (no relation) and narrowly pipping our very own Pick n Pay. Our Uncle Sydney, ever the analyst to call a spade an unslightly blemish on the bottom line, has pointed out that while Woolies and Pick n Pay had done “wonderful work” in the areas of environmental and social responsibility, this had not enabled them to grow market share, South African punters having other things on their mind, like how many kilos of GMO boerewors you can throw on the braai for ten ront.
Comment: There is a school of thought, however, that goes: energy, water and other costs are finding their way into prices on the shelf, and anything that addresses this situation is, in and of itself, a good thing. It is to this latter view that we subscribe, ahem.
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Fruit & Veg City And a seven headed beast shall rise from the sea
OK, no more talk, we promise, about the mysterious sixth retailer, of which the ancients spake, which will appear as doth a comet in the morning sky, but did anyone know just how many Freshstops Fruit & Veg City have up and running, as of time of going to press? 100, that’s how many, and there’ll probably be another couple more by the time you lot drag yourselves back from lunch. You will find Freshstops at Chevron service stations, where they help the owners supplement the modest income they make hawking the world’s most expensive liquid, and where they are replacing Starmarts as the retail brand of choice, offering a more wholesome array of snacks and treats to the inexplicably hungry late-night punter, you know who you are. And what’s more, there will be 300 more of them in the next five years, putting them way out in front of the competiton, which includes the likes of Pick n Pay and Woolies.
Comment: Seriously, FVC. Is that not the first faint smudge of a comet’s tail on the lightening horizon?
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Tiger Brands Business of a different stripe
A bit more on Tiger’s acquisition of Nigeria’s Dangote Flour Mills. This really is a BFD (big freakin’ deal, don’t ask us again), because Nigeria is a big freakin’ country, with 180 million souls who share the continent’s taste for wheaten products, and an economy that’s roaring ahead at 7%, and could be one of the world’s top ten by 2050. And there’s more: Aliko Dangote, who started the business and is one of Africa’s wealthiest men, will be staying involved, as he shares Tiger CEO Peter Matlare’s belief in the development of a viable manufacturing base on the continent. One of the earlier orders of business, it seems, will be to grow in Nigeria the capacity to produce bread of the same crunchy freshness and volume as Tiger does back home. Dangote is listed on the Nigerian Stock Exchange, and there it will remain for the moment.
Comment: This is truly one of the most exciting stories in the post-apartheid business milieu, if you’ll forgive the expression.
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Frozen Brrrrrrrr!
Internationally, the frozen food sector grew 6% in the year to June 2012, according to the devilishly clever people over at the Kantar Worldpanel. And this, by the way, is across the board, although meat and poultry grew particularly well, growing volume at 6% and revenue at 13%, as Mrs Punter realises the financial, health and convenience benefits of stocking up the ice-cabinet. Other star performers are frozen potato products of every stripe, with value up 9.9%, and pizza (+5.9%), as price-conscious consumers do the whole home-cooked takeaways thing. And it’s not just suppliers who are laughing: Tesco, scenting an opportunity, have refurbished their frozen range for the first time in five years.
Comment: For more from Kantar, don’t miss Bryan Roberts, sharing a platform with Trade Intelligence at the CGCSA conference next week, on the subject of retail trends. What? No ticket? Great heavens alive, there’s not a second to lose!
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Household Debt I owe my soul to the company store
South Africans are drowning under a mountain of debt, to wheel out that hoary old mixed metaphor one more time. In the last three months, another 170,000 of us fell behind on our payments, a third of those over multiple months. This doesn’t seem like a lot of people, but to the National Credit Regulator, which takes a dim view of this sort of thing, it’s no laughing matter. And expect worse: in the past 15 months, we added another million credit-active consumers to the already straining fiscus, with unsecured credit now totalling R133billion and growing at a clipping 17% per quarter. As yet we’re only spending 6.9% of our disposable income paying this debt off, but if lending continues its skyward trend or Mrs Doubtfire raises the interest rate, we could be looking at numbers of 10% plus, of the sort we haven’t seen since the dark third quarter of the year 8.
Comment: Step away from that credit card, ma’am.
IN BRIEF
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Research Riding the Snake
According to the pink-shirted research-wallahs over at Wrigley, there’s gold near them thar tills: The profit margin for front end sales – i.e. those made at or near the checkout – is 32.8%, compared to 27.3% for the total supermarket. And at the going rate of a Hello magazine and a slab of Lindt, we’re not surprised.
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Woolworths Woolies gaan border toe
And speaking of Woolworths, which we were, obliquely, in the previous story, in case you hadn’t noticed, they’ve opened up a store in the Game Mall in Oshakati, northern Namibia, which used to tremble to the roar of Buffel engines, another timely reminder of how far we’ve come in a scant couple of decades.
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Shoprite Painting the township red
And in one final example of the improving shape of things despite it all, The Big Red One tell us that their two busiest Shoprite stores are in Diepsloot Mall and Tembisa, which have enjoyed the highest turnover per m² these past couple of years, due in no small measure to the government’s social grant programme, which now keeps about 15 million of us from starvation.

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