
THIS ISSUE: 09 Nov - 15 Nov
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Pick n Pay Throwing punches
As our man Winston remarked during the dark days of the recent unpleasantness, this is not the end, nor yet the beginning of the end. But it is, perhaps, the end of the beginning. PnP having secured no fewer than 225 retail sites are about to embark on one of the biggest store opening sprees in South African history. The sites are located all over the show, in townships, suburbs and rural areas, and 119 of them will be opened by the retail division, with the remaining being Boxers, Boxer Punches and Express forecourt stores. The danger in painting the neighbourhood blue, of course, lies in the cannibalisation of existing stores or coming up short against more established competitors, although by and large the pundits seem to think this strategy, if the execution is sound, is the right way to go.
Comment: It is to be profoundly hoped, if you are a shareholder, that the market share horse has not already bolted from the Pick n Pay stable.
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SPAR Green space
Back in Sparville, in the meantime, the Verdant One has upped and revamped its website without so much as a by your leave. Very nice it is, too: the site is a paragon of cleanliness, super easy to navigate whether you are a shopper or a shareholder (although if the former, no online retail as yet) and offers all sorts of current news, from sustainability (check out the wonderful Sydwell story) to national specials. The site is dangerously easy to like on Facebook, where the social aspect of the user’s engagement with the SPAR brand resonates neatly with the ongoing My SPAR brand platform. If, like us, you hanker after orderly columns of optimistic numbers, the Financial section in the About SPAR section is the spot for you.
Comment: Having a good site is one of the costs of doing business these days. But with this new site, SPAR have integrated their various constituencies in a fresh, unique and powerful way.
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Woolworths Maybe they just aren’t that into him
The nasty little war of attrition between Woolies and its franchisees in the canelands sputters on like a cheap candle. And right now, the big, tastefully attired guy is winning. The Cape High Court has found that Woolworths was indeed well within its rights not to renew the franchise agreement of one Haresh Ouderajh, who has been trading happily since 2003 at one of Woolies’ plum sites in the magnificently located but otherwise hideous Ballito Lifestyle Centre. Ouderajh also owns the store at the less tony Ballito Bay Mall, which caters to the more indolent holiday maker who can’t be bothered to drive the Discovery up the hill, and a more residential site in nearby Stanger. An embittered Ouderajh has accused Woolies of failing to deliver stock after he refused to sell the three businesses back to the Dapper One for their best offer of R40bar, an accusation Woolworths rebuts in no uncertain terms.
Comment: That whole franchise buy back has been a messy and protracted divorce in parts. Everyone wants the Merc, and the kids.
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Pioneer, Premier, Tiger Brands You lot again?
The three chastened colluders in the bread price fixing scandal may once again be back in court, this time the objects of a potential class action by independent bread distributors in the Western Cape who believe the three had colluded to reduce the discounts offered to distributors. At the centre of it all is distributor Imraahn Ismail-Mukaddam who bought the original complaint to the Competition Commission in 2006, and who is now claiming R4million in losses. The tricky thing is that the Competition Commission does not allow for class action, class in this instance is hellishly difficult to define and the Western Cape High Court has already denied the group a class certificate. Hence their approach to the Supreme Court of Appeal in Bloemfontein, with whom the matter now rests.
Comment: Whatever the outcome, independence is not a state that is readily rewarded by any of our larger businesses. Which makes things doubly interesting when the independents bite back.
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Oceana The bounding main
A tidy set of numbers from fishing outfit Ocean Brands, who saw turnover grow 27% to R4.6billion for the year which ended, sort of, in September, and operating profit up a titanic … what? Oh, sorry … a very respectable 39% to R711million before abnormal items, which presumably in this case include a rusty can and an old boot. Canned fish sales volumes on the domestic market performed particularly well relative to last year, with Lucky Star pilchards, a lower end standard which our grandmother used to feed us as a treat with the mash on Friday nights. Less immediately material good news was that Ocean are making strides in securing an international supply chain for their raw material, which as we all know only too well is doing less teeming than it used to in an increasingly lonely ocean. Their squid catches, for example, are lower than they’ve been for a decade.
Comment: Good results from an excellent business in an increasingly constrained sector.
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CPI Some vodka with your package holiday?
According to the frankly barmy beard tuggers over at StatSA, mageu, feta cheese, hot chocolate, filtered coffee, vodka, bricks and cement, energy-saving light bulbs, tablet computers, hair extensions, and package holidays will form part of the CPI basket from January 2013. Items leaving the eccentrically-constituted basket include samp (eh?), savoury biscuits, dried fruits and nuts, frozen vegetables, dried lentils and peas, and vienna sausages. The leaner, reweighted basket – which as you know is needed to arrive at the standard measure for inflation – will have only 393 items in it as opposed to the current 402. There will also be a separate basket for every primary urban area, secondary urban area, and rural area in each province – currently there is a single basket per province. And speaking of CPI, it could break past 6% next year as electricity prices mess things up for everyone.
Comment: Hair extensions.
IN BRIEF
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Shoprite There’s brass in copper
Shoprite are still involved on some sort of how’s-your-father with various Zambian shareholders who do not feel that they have received the dividends due, to the extent that the Big Red one – or it’s Zambian subsidiaries – have been given seven days to koka or else. As the story has been covered only by the partisan Zambian press and Shoprite are maintaining their customary stoical silence, it’s difficult to fathom what if anything is owed to whom by whom.
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Retail Sales Ding, dong, merrily on high
…the Christmas tills are ringing. Thanks to easy credit and a kinder, gentler interest rate, retail sales for December are expected to fly past last year’s total of R73bn, which itself outstripped 2010’s R65bn.

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