
THIS ISSUE: 08 Jun - 20 Jun
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Woolworths Well, clutch our reasonably-priced pearls
In East Africa, a region which for these purposes includes Kenya, Tanzania and Uganda, the Dapper One will be clenching its teeth, smoothing down its pencil moustache, knocking back the last of the gin and reducing clothing prices across the board by as much as 30% in order to win market share. This is not some desperate strategy they’ve pulled out of a nicely-turned hat, either: when they played a similar hand in Australia, profits jumped 70%. Woolies has to challenge the perception that its stores are only for the well-heeled, especially in Kenya, where it has mentioned that it intends quadrupling the number of its stores to 20 in the next five years.
Comment: But there’s the trick isn’t it? Make people feel posh for shopping with you and clever for getting those good prices
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Wholesale The Whole Enchilada
How cool is this? A story in the Trade Tatler about one of our own, reporting on the wholesale sector in another magazine. As reported by Katia Benedetti in Wholesale Business, in 2012, South Africa's independent wholesalers turned over R68 billion or a whacking 2.3% of GDP - and you can add another 30-40% if you take exports into account, and why wouldn't you? Then - and here's the natty bit - add independent retail margin to that (independent retail of course being wholesale's main customer) and you're looking R90-100 billion, which we in the industry call serious money. Of course there is room to grow, and if you buy the mag, you will find out how the string-jawed men and gimlet eyed women of the sector intend doing so.
Comment: Better still, have a look at the Trade Intelligence Wholesale Report over here
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Allsome Brands All for some and some for all
Willowton of Pietermaritzburg, you will doubtless know, is one of South Africa's largest crushers of sunflower seeds. Louis Dreyfus Commodities, you probably don't, is a global merchandiser of commodities, a major asset owner and processor of agricultural goods. Now the two of them are taking their obvious synergies and building upon them a brand new joint venture called Allsome Brands. Their first line is, perhaps surprisingly, an eponymous range of parboiled rice in five easy sizes, and an easier to cook range called D'lite, d'signed to complement Willowton's oil and marg range. Rice was selected as the first category of entry for the new company, following extensive market and consumer research, and will be processed at a new purpose-built PMB plant.
Comment: Welcome to the industry, young JV. Collect your staaldak and flak jacket at the door.
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Tiger Brands Treat her right
Heaven knows how this one slipped past us, but the more astute among you will recall that Tiger Brands acquired the grand old lady of beloved condiments, Mrs H.S. Balls, from Unilever in April, having courted her like a retired Confederate General for months and even years. While the brand was turning over R189million for Unilever at the last count (in 2011), they felt they could not give it the attention it deserved, and finally relented to Tiger’s earnest pursuings. Tiger is apparently going to do the right thing by Mrs B, evolving the brand into areas where they believe “she has real equity”. Tiger has a stable of complementary brands in which Mrs Balls should feel right at home – among them Koo, Tastic and All Gold.
Comment: And for the cynical among you – there was an actual Mrs Amelia Ball, who made a name producing her chutney for friends and family during the dark days of WWI.
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Consumers The harder they come
According to the number crunchers and beard tuggers over at the Bureau of Marketing Research (BMR), today’s South African consumer is frankly in one heck of a state, with 65.4% of consumers experiencing a state of financial insecurity during the first quarter, and consumers in all income groups feeling the squeeze of servicing their existing debt. While debt servicing pressure diminished over the past two years because of lower interest rates‚ this has been offset by increasing costs like electricity, rates and taxes. And the macroeconomic picture is not helping either – the ongoing volatility is exacerbating the financial vulnerability of millions of households. All of this according to the BMR’s latest consumer financial vulnerability index which rose slightly to 51.1 points in the first quarter from 50.1 points in the fourth quarter of last year. This indicates that household cash flow has been affected to such the extent that it has created a high risk of consumers becoming financially vulnerable and unable to repay debts.
Comment: But you knew that. Hard times.
IN BRIEF
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Tongaat Hulett There will be bagasse
Sugar and golf-estate barons Tongaat Hulett are getting in on the renewable energy boom with the compilation this year of a bid for an 80MW power station, to tap into the government’s target of 800MW of co-generation power. Tongaat continue to parlay (ahem) an already significant asset – the fertile hills of our subtropical regions – into more and yet more revenue opportunities. And when you get into energy, the sky really is the limit. Just make sure you keep it clean, is all we’re saying.
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Nederburg And a celebratory lift of the pinkie to you
Nederburg won big at the Chicago 2013 World Wine Championships last month. These championships, which in the grand tradition of American competitive events, take the accepted interpretation of “World” as “Here in the US of A”, focus on wines for $20 or less, and Nederburg distinguished itself by garnering three gold medals – for the 2012 Special Late Harvest, Chardonnay, and Sauvignon Blanc – and six best buy titles. A triumph for Nederburg, in an important and growing market.

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