THIS ISSUE: 28 Mar - 05 Apr
YOUR NUMBERS THIS WEEK
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Pick n Pay Lucky number 6
If it’s a corporate slogan you’re after, here’s one for you: Quietly Chipping Away Since 1893. Solid, respectable, reliable, sensible. Quietly chipping away is what Pick n Pay have been doing since 2010 in Zambia, where they opened their 6th store this week, in the jacaranda-lined streets of the copperbelt town of Luanshya. The store itself is a moderate 1,250m2 in area carrying 4,500 locally-tailored lines and boasting a butchery, bakery, hot food section, and fruit and vegetable department. When PnP first moved on Zambia they undertook to source 50% of their stock locally; they’re now up to 75% from Zambian manufacturers, agents, and importers. PnP’s strategy on the continent is to grow critical mass where they already have presence while keeping their eye on other geographic opportunities, if that’s a thing.
Comment: This in contrast to the perhaps more gung-ho approach of the competition. Time will tell which one worked best.
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Uchumi I bless the tills down in Africa
What are Uchumi of Kenya up to, we hear you ask. Don’t we? Oh. Well. Never mind, it’s a slow news week and we’re going to tell you anyway. They’re busily extending a Rights Issue of shares to the value of around US$17.7million to punters in order to raise cash for their cautious programme of local and regional expansion, that’s what. In order, presumably, to confound the likes of Tuskys, Nakumatt and Naivas, the local competition. Uchumi, whose fondest wish it is to be the supermarket of choice in the Eastern African region has seen some dark days. It was originally owned by three parastatals who signed management and training over to retailer Standa SpA of Italy in the seventies. In 1990 it launched the hyper concept to an eager Kenyan market, but ran into financial and operational difficulties in the new millennium, eventually filing bankruptcy in 2006. It has since been revived, relisted in 2011, and has for the past three years turned a profit.
Comment: Well, you did ask. Didn’t you?
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Tiger Brands All right, you two, cut it out. “All” right, get it?
The striped one has just lost an ASA ruling against AH-Vest Ltd trading as All Joy Foods, which has recently brought to market a product with a predominantly gold label that it’s calling All Joy Gold Gourmet Tomato Sauce. Can you see the problem here? That’s right. Tiger Brands’ very own All Gold Tomato Sauce, SA’s leading ketchup, has been a top selling culinary product in South Africa for over a century, and Tiger are perhaps understandably sensitive about anything which may threaten the equity of this venerable brand. Not so say the Directorate of the ASA, however, who ruled that they could find no infringement upon the complainant’s advertising goodwill and also no imitation.
Comment: While the All Joy Gold Gourmet brand is hopelessly (and perhaps disingenuously) overnamed and its label floridly overdesigned, these things are not, as the ruling seems to indicate, an exact science.
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Coca-Cola What we really need is more bubbles
The Next Big Thing might not be big. It might not even be a thing. This according to the hipster propeller heads over at Coca-Cola’s Venturing & Emerging Brands (VEB) team, which believes that a big chunk of the growth in the beverage market over the next ten years could come from categories of product which, spookily, do not yet exist. Recent acquisitions driven by this team have included so diverse an assemblage of brands as NOS energy, FUZE juice drinks, Honest Tea, Zico coconut water, Core Power protein drinks and illy issimo ready-to-drink coffee beverages. One NBT might come in the form of Bubble Tea. Big in Japan, Grosse in Germany and beloved of every pony-tailed teenager who happens upon it, Bubble Tea is made up of alginate pearls with a flavoured liquid core, that burst delightfully upon the tongue.
Comment: In the meantime the intrepid yet cool boy sleuths and girl detectives of VEB hang around trade shows and lurk in yoga studios, looking for that micro brand which could with Coke’s gentle nurturing turn into a billion-dollar behemoth.
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British American Tobacco Smoke gets in your portfolio
Quick – name the biggest company on the JSE right now! Aaaaaaahhhhhhnnngggg! Wrong! It is in fact British American Tobacco, which passed the – get this – trillion rand (by market capitalisation) mark a couple of weeks back, the first South African business ever to do so, and healthily beating SAB at a less-whelming R809billion. Smoke and mirrors? we hear you murmur. Perhaps so, given that 89% of BAT’s two billion shares are held by offshore investors. BAT remains a highly attractive option for punters with a bit of cash left under the mattress as it generates a pile of cash, although it trades at a PE of only 19, thanks to the efforts of the Mother Grundys who entertain the notion that smoking is bad for you. But no matter, under its Nicoventures unit the Smoky One is on the lookout for next-generation tobacco products which will sate the cravings of its target market while keeping the legislators a little happier.
Comment: Amazing.
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Logistics Clicks, mortar, diesel
Online shopping is about to shake things up big time for the nation’s logistics providers, according to our friends over at Jones Lang LaSalle, which have released a report on the topic. For example, online sales will drive demand for new distribution facilities, which will include a variety of specialist sites, including fulfilment centres, sortation centres, cross-dock facilities and processing centres for returned items. As we’re starting to see with the likes of Dion, multi-channel retail will give way to something rather alarmingly called omni-channel, and this in turn will blur the lines between the store and the warehouse – and stretch the logistics infrastructure which serves them. This suggests that manufacturers, retailers and logistics businesses will have to draw closer together, working in partnership to provide integrated solutions to the pyjama’d punter, who is looking to reduce that weary time between the click of the mouse and the ring of the doorbell.
Comment: Exciting times for our grease-bedecked friends.
IN BRIEF
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IMPERIAL Logistics Meet the parents
IMPERIAL Logistics have donated a truck to the Mabula Ground Hornbill Project, which is attempting to help the numbers of this endangered species swell by rescuing doomed “second chicks” from selected nests then hand-rearing them – which is more than their own parents would have done. Ground Hornbills, you see, lay two eggs per batch as a kind of reproductive insurance policy but then ruthlessly raise only one of the resulting chicks.
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Wine In vino, spondulas
Bacchus has smiled upon us this year, friends: drink and be merry. A record grape harvest of 1.3 million tons awaits, and poor harvests in Europe, Latin America, Australia and New Zealand have confounded our enemies. Last year’s exports reached 417 million litres, up 17% from 2011, and critics in the icy wastelands of the North have softened their stern hearts to our warm southern grapes.
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Tesco And in news not concerning horseflesh…
… Tesco have mentioned that it is their conviction that they will be launching full grocery e-commerce to most of their overseas markets by January ‘14. They currently offer online shopping to the happy denizens of the UK, Ireland, Korea, Czech Republic, Poland, Slovakia, Hungary and Malaysia.
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