
THIS ISSUE: 12 Sep - 18 Sep
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Shoprite Bin here long?
A torrid week for the Big Red One in Mozambique where as you know you can get done three times before you get to Punta for not having a ZA sticker on your Fortuner. Last week, the National Inspectorate of Economic Activities closed five supermarkets in Maputo, Matola, Boane and Chimoio for allegedly selling past-its-sellby stock. They were re-opened two days later, but an investigation is pending. Shoprite’s only word on the matter so far has been that the closings stem from the dismissal of a store manager some weeks ago who was fired for selling remaindered margarine at the back door, although they have conceded that from time to time older stuff might inadvertently get left on the shelves in even the most jacked supermercado.
Comment: Shoprite have been bringing modern retail to the people of Mozambique since 1997; it is to be hoped that the current spat passes like the land breeze of Bazaruto when the rising sun warms the shore.
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Massmart An amusing little warehouse
If you're currently bringing a well-priced wine to the thirsty palates of South Africa's value-conscious punter, but are looking for a more global audience for your product, you may wish to have a word with Massmart. The Men in Black, you see, are incentivising the best performing wines from its Developing Wine Brand Programme, by providing them with the opportunity of reaching some of Walmart's key markets internationally - a road down which the Seven Sister's brand and King Goodwill Zwelithini's Bayede! Wines have already skipped. The programme is part of the Supplier Development Fund (SDF) which was established as a precondition for the Wakro deal, and it has seen the sales of 16,800-odd bottles to date by the 19 participating brands in Makro and Game stores.
Comment: Way to turn the supplier development frown upside down, Massmart. Nice one.
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Woolworths Indicate this
Can Woolworths do anything wrong? Not you, Pick n Pay, you answered the last time. Anyone? That’s right, the answer is in fact no. Proving that you can be both well-shod and tread the path of the righteous, the Dapper One has been listed for the third year in a row on the Dow Jones Sustainability Indices, along with 23 just other businesses globally in the food retail sector. The indices look at both the sustainability of the business and its potential value to investors, convincingly making the case that increasingly you can’t have one without the other. They also provide asset managers with reliable benchmarks by which to manage and presumably sell their sustainability portfolios. A feature of this year’s indices is the massive 31% increase in companies from developing markets.
Comment: Superb progress on the old Good Business Journey, that tastefully-clad adventurer.
MANUFACTURERS AND SERVICE PROVIDERS
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Aspen Strong like Russia. But not too strong
Aspen’s results were in last week, and erred on the side of downbeat … only kidding, of course! Revenue up 27% to R19.3billion and something called EBIDTA (which we thought was something only a pill from Aspen could cure) was up 11% to R2billion for the domestic business on sales of R7.4billion. The big earner was its Asia Pacific division, at R7.6billion of the revenue and EBITDA up 30% to R1.9billion. But wait, there’s more! Thanks to fairly complex deals with drugmakers MSD and GlaxoSmithKline, which has still failed to find a cure for bad punctuation, Aspen will inherit a team of 450 new reps, 150 of whom will be in Russia. With its burgeoning yet cost-conscious middle class, this is exactly the sort of place where Aspen swims like a barracuda among the catfish, or something.
Comment: So expect more fireworks, and more mixed metaphors, to come.
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SABMiller Trouble is brewing… oh, shut up!
Further claims of uncompetitive behaviour are hounding The Big Feller as rival Diageo avers that SAB have effectively thrown their traditional beer, Chibuku, off the shelves of a North West wholesaler by the simple expedient of buying up all cartons on the shelves and replacing it with the SAB beer Eyethu at a price described as predatory. And to add a further note of bitterness to the brawl, while Diageo’s subsidiary UNB has the licence to market Chibuku here in SA, having bought it off SABMiller a decade or so ago, the African licence is held by SAB. SAB claims that as a plucky newcomer (this time around) in the umqombothi market it prefers to price its products competitively. SAB professes not to have heard anything from the Competition Commission at time of press.
Comment: As poorer punters trade down to traditional brews, businesses like Diageo and SAB will contest that increasingly lucrative territory more hotly.
TRADE ENVIRONMENT
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The Economy The Man From UNCTAD
UNCTAD – that’s The United Nations Conference on Trade and Development to you, you cheeky monkey – has warned that if South Africa wants to see some economic growth anytime soon, we’re going to have to shakedown the consumers for it. Exports won’t do it right now: commodity prices have softened, growth in the US and Europe while present is sluggish, and China has come off its hysterical bender too. GDP here is 60% reliant on consumer spending; unfortunately that has come under such pressure from our levels of indebtedness that an upswing is unlikely. Government spending may help out in this regard, although the thinking is that the government’s recession-busting R800billion infrastructural spending spree might have peaked, and with it the growth in employment. One little ray of realistic hope may be Africa – according to UNCTAD both domestic and regional growth may be worth a try.
Comment: One day, this economic ambit we found ourselves in will be known as the Great Slug.
IN BRIEF
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Shoprite One for you, and two for me
Broadening its already substantial non-retail offering to punters this week was Shoprite, which is now offering eBucks rewards on purchases at their many, many stores. eBucks, you will recall, is FNB’s in house loyalty programme which, it appears is branching out somewhat. Shoppers will get up to 15% in points back on their purchases, Shoprite will get a loyalty programme without having to build and brand it themselves, and FNB will no doubt make cash in the arcane and unfathomable way one does when one dishes out points and rewards.
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SABMiller Rumours of my demise have been much exaggerated
In a sort of reverse obituary, the Tatler is pleased to welcome back to the harness Mr Graham Mackay as Non-executive Chairman of SABMiller, after a spot of treatment for a brain tumour. Under Mackay, the Big Feller made many of the strategic acquisitions which propelled it to number 2 slot in the cutthroat world of beer. More will doubtless follow as the old warhorse returns to the fray.
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Coca-Cola Sweetness, I was only joking…*
Not two weeks ago, friends of ours were sending us stories down that Facebook thing about sugarless sweetener aspartame being manufactured from the excretions of some particularly noxious bacteria. This week, over in the US, Coca-Cola are running ads to the effect that aspartame as used in Diet Coke, is not bad for you. “The safety of aspartame is supported by more than 200 studies over the last 40 years,” go the ads, quite catchily, we thought.
*this one goes out to our friends in the Shepstone Ref, circa 1985