THIS ISSUE: 17 Jan - 24 Jan
YOUR NUMBERS THIS WEEK
-
Pick n Pay … but he won’t get bogged down in the details
In a significant move which has pleased some analysts, and pleased the living heck out of Chairman Ackerman the Younger, The Big Blue has appointed Paul Marsh as Divisional Manager‚ Groceries & Perishables. Mr Marsh, who will be working under Merchandise Director Peter Arnold, comes with absolute yonks worth of retail experience under his belt, having cut his teeth at Massmart, where inter alia he worked as a general manager in the Hyper division, as the merchandise director for food and liquor for Makro SA‚ as group general merchandise director for the Massmart group‚ and as CEO of Shield buying and distribution. A notable achievement for him there was the launch of SA’s first FMCG online trading portal. Then came the wilderness years: five years with Glendinning as director of consulting in Thailand. Here’s what he brings to PnP according to Chairman A the Y: “Effective retailing‚ skills and training‚ operational management‚ sales and marketing strategy‚ organisational structure‚ competency benchmarking‚ negotiating of trading terms and pricing‚ and retail finance.”
Comment: All of which should come in handy as a resurgent blue and white striped tiger prepares itself for the spring.
-
-
Woolworths Played, sir
If it’s actual numbers you’re after, look elsewhere. But we have some pretty natty percentages for you, if that’s more to your discerning taste: Woolies’ group sales for the first six months of the FY we must call 13 were up 18%, with like store sales up 9.4% overall. Clothing was up 13%, with Food coming in at 11.1%. In the cursed Antipodes, however, sales were up a whacking 55.6% as The Dapper One’s Country Road subsidiary concluded its acquisition of the Witchery group, and these sales were included from September. Trading space, in the meantime, was up 5.7%. This didn’t prevent some punters, rattled by the shall we say more challenging prospects for retailers generally, from selling their shares, with the price dropping 4.3% last Tues.
Comment: Still. A tantalising glimpse of what to expect in the interims, out in a couple weeks’ time.
-
-
Retail Shares We share your pain
Last Tuesday dawned bright and bleak for South Africa’s retailers, with many of their shares losing value (and here by way of interest we will against our custom include the clothing fellers) for eg: Woolworths down 4.31% to R63.49, Foschini down 5.2% to R124.40, Massmart down 3% to R181 and Mr Price down 5.25% to R126.25. Shoprite shares, you will recall, dropped 5.93% to R188 on the release of a fine but not great set of interims; this was their worst performance since a similar drop in the year 6. The food and drug retailers’ index closed 2.74% lower last Tuesday, while the general retailers’ index closed 3.79% down. Why all the sad faces, punters? As usual, the analysts have come out of the woodwork with some, shall we say forensic predictions, ahem. SA’s retail shares have been running a little hot, they say, as foreign investors hyped on the continent’s growth prospects get in on the action, while the top retail companies have averaged PE ratios of 30, or double the rest of the index as retail counters have failed to the factor in the possibility of a consumer slowdown which, it now appears, is upon us.
Comment: Better polish the family silver, boys, and put it on Gumtree if you want to open that new DC.
-
Supplier Shares We’ve got a dead cert for you…
The retailers have had their go, so let’s turn our attention to the suppliers when it comes to the performance of their stocks. In 2012, AVI beat all comers with a 53% rise in their share price, followed closely by Clover (51%), then Oceana (45%), Distell (42%) and SABMiller (35%). If you happened to have a little flutter on AVI, you were in for a treat – a special dividend and a 62% rise on the total ordinary dividend would have seen your total return hitting 59%. Those in the know, by which broad definition we mean financial journalists and analysts, reckon that you could do worse than put your money on the same five horses this year, with the welcome addition of Rainbow Chicken, an 8% loser last year, but a heck of a business with the acquisition of Foodcorp in the pipeline and potential design on the rest of the continent. And Clover, with its new contracts for the distribution of Epic Foods and Red Bull, also looks tempting.
Comment: See you this time next year then, a couple of bob richer.
-
Retail Sales Liars, damned liars and economists
Remember how we were saying that shares on the general retail index of the JSE were 3.79% down? Interestingly, retail trade sales were 3.4% up for the month of November, according to the hoary sages at StatsSA. Contributing to this were the textile, clothing, footwear and leatherwear sectors at 8%, household furniture, appliances and equipment at 6.4% and our own, dear food, beverages and tobacco sector at 5.9%. This was a surprise for the moongazers, mountebanks and minstrels who make their living as economists. This fine body of men and women predicted growth of only 1.5%. And they would have been spot on, if more sectors had followed the example of pharmacy (-0.3%) and general dealers (-1.3%).
Comment: The numbers indicate that there may be some resilience in the old economy yet, if you strip out the corrosive effects of violent industrial action. Or they don’t.
-
-
Trends Upwardly mobile
Our friends over at BizCommunity have helpfully come up with a list of retail trends for 2013 you can actually believe, and we, even more helpfully, have shrunk them down to pocket size. So here goes:
Let the discount retailer war begin: You in, Shoprite? Good. You too, Foodco? Great but who’s this? Herr Aldi? Gott in himmel!
Getting more comfortable using our phones in-store: And presumably in church and at the movies.
Mobilise your site before your competitor mobilises your customers: And before President Obama mobilises his drone airforce to take us all out.
Do I like it? No but I recommend it... and here’s why: Did we ask for your opinion? No… and here’s why.
Mobile becomes TV’s new best friend: Or indeed “frenemy”. If that’s still a thing.
Contrarian movement sees cinema’s appeal continue to grow: We beg to differ…
Year of the app-store: That was great, wasn’t it? With that Edward Fox feller? An absolute classic… oh, wait. That was Day of the Jackal.Comment: Of course, we highly recommend that you get on over to Biz and read the proper ones for yourself.
IN BRIEF
-
Tesco The other red meat
Or you could have had a week like Tesco, who were regrettably forced to run a series of full page ads in national newspapers in the UK apologising for the horse meat they had either inadvertently or not slipped into their burgers. This as £300millon was wiped off their stock market value, presumably by horse-loving punters from the home counties.
-
-
Nakumatt Shilling out for value
Up in Kenya, Nakumatt are launching their first private label range, investing 200million shillings – or R20million – into Nakumatt Blue Label after a 12-month R&D and licensing process. Which just goes to show that the biggest impediment to the northward march of South African retailers might just not be other South African retailers.
Sign up to receive the latest SA and international FMCG news weekly.
Tatler Archive
Next Event
19 September: Corporate Retail Comparative Performance H2