
THIS ISSUE: 09 Aug - 14 Aug
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Pick n Pay Taking the package
This week bears the startling news that Pick n Pay has initiated its next round of job cuts, targeting about 2,000 of its middle management staff both regionally and at Head Office. The analysts are united in their view that
1. This is a good thing
2.This is a bad thing
3.It’s a clear indication that Mr Brasher is being given free rein, because the Ackermen wouldn’t have allowed such a thing
4.Despite having allowed the retrenchment of 3,000 store staff two years ago
5.The retrenchments being voluntary, a whole bunch of good people will walk out with a big wedge of cash in their back sky and into other jobs6.This will never happen because Pick n Pay reserves the right to reject voluntary retrenchments by such people
Comment: The consensus seems to be, though, that centralisation has created redundancy and in the interests of a leaner, more efficient and eventually more profitable operation, these retrenchments are a necessary evil.
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Woolworths Kenya believe it?
Self-described Kenyan “lifestyle retail clothing firm” Deacons has revived its plans to list in the Nairobi Securities Exchange (NSE). This is relevant because Deacons has finalised its JV with a certain Woolworths of Mauritius to establish Woolworths Kenya Proprietary Ltd, for which Deacons will provide management support, transportation and other logistical services while Woolies in SA will provide the product, Woolies Mauritius being the vehicle for the operation of the Dapper One’s interests in other African countries. The road to joint ventureship, as you are well aware, seldom runs true, and so it proved in this instance – the listing of Deacons was delayed after a dispute with Woolworths over the franchise agreement, specifically those clauses relating to renewal rights.
Comment: But still, eh. Woolies’ strategy in Africa is clearly a more sophisticated affair than just pitching up, greasing a few palms and seeing how it goes.
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Massmart Don’t be so naiv…oh, shut up!
And speaking of the wheels within the wheels of a strategy for African expansion, Massmart’s plans to move into Kenya through the part-acqusition of local outfit Naivas has encountered some resistance from a shareholder who wishes to prevent his siblings from flogging the family silver. But the Men in Black, we are told, have more irons in that particular fire should the Naivas deal go south. Three of Kenya’s major retailers, Tusky’s, Nakumatt and Naivas of recent mention, are family-owned, making them suitable targets for acquisition and a fourth, Uchumi, was targeted some time ago by Shoprite.
Comment: Kenya is emerging as the strategic lynchpin for retailers looking northward.
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Sugar Silver magic ships you carry
Listen carefully, this one’s a bit tricky. So far, we’ve exported 250,000 tonnes of sugar this year, sending it out into the world where it competes at a disadvantage with heavily-subsidised crops from places like Brazil (boo!) and Australia (hiss!). And the reason for this increase in exports is because the stuff is finding a smaller market back home, where it is threatened by below-cost imports from places like Brazil (boo!) and .... you get the picture. Bottom line: about R600million has been lost to the industry on the local market. And among the people hit worst by this are new and emerging farmers, of whom there are roughly 170, farming 20,000 virgin hectares. The South African Sugar Association has asked International Trade Administration Commission for the dollar-based reference price for sugar imports to be increased from $358 (R3,532) a ton to $764 a ton, but this application is still in its early days, and relief, if such is to be had, will not come soon.
Comment: The world is flat, and cheap, and this turns out not to be the good thing we all thought it was back in the early noughts.
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Liquor Go on, have another!
An outright ban on liquor advertising – which would include sponsorships, promotions and the display of brand names on vehicles – has come one step closer to reality with the approval of an inter-ministerial committee on substance abuse. The thinking is that a ban would reduce the social and financial burden created by alcohol abuse but, noble thought that this is, there is some pushback. 12,000 jobs will be lost, say the experts. The SABC will lose R500million worth of advertising. And the illegal and unbranded liquor sector, which contributes disproportionately to social damage, will be affected by the ban not one whit. In fact, say Econometrix, there is no statistical link between liquor advertising and the consumption of alcohol at all, although it has been found in some studies that advertising causes kids to start drinking younger.
Comment: Advertising has indeed driven many of our best friends to drink. Our friends in advertising, that is.
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Food The Hunger Games
South African punters are in bad shape, says a new survey by the HSRC. And we’re not talking about the wallets, oh, no, although those could use some attention too. Apparently, two thirds of South African women and a third of our menfolk are either overweight or obese, and this can be pinned on a diet which is high in energy and low in micronutrients, and places unfair reliance on starches like mealie meal. The main reason for this is cold economics – people buy what they can afford, and all too often this piles on the kilos while leaving the hunger unsatisfied and the body prey to diseases like diabetes. Fully a quarter of South African households experience hunger on a regular basis, reports the HSRC.
Comment: This could be one of those areas where human need and commerce might meet, for businesses prepared to look for innovative solutions to a terrible social problem.
IN BRIEF
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Going.co.za …going, gone…
Who you may ask, and you would be wrong. Going.co.za is a JV between Amabubesi Holdings and Aussie whizzkid Paul Greenberg which will revolutionise retail here by making available, cheaply and in bulk, all the stuff that no longer sells in traditional retailers, like excess inventory, returned items and refurbished goods. Handy stuff to have if you’re an independent retailer with a willing market for that sort of thing.
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Meat Home on the range
Burger night will never be the same after the arrival last week of the world’s first lab-grown burger, cunningly fashioned from 20,000 strands of lab-grown protein, salt, breadcrumbs, egg powder, with red beet juice and saffron for the colour, at a hunga-bustin’ cost of just R3.3million.

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