THIS ISSUE: 19 Sep - 26 Sep
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Pick n Pay Braai Jove!
After the excesses of Heritage Day, you probably aren’t interested in anything much to do with braaiing, but it’s a slow news week (see “the excesses”, above) so here goes: retailer Pick n Pay and professional boytjie Justin Bonello have launched season 2 of Ultimate Braai Master: The Roads Less Travelled which sees the top 15 braai teams (consisting of a Braai Master and Braai Buddy) travel and braai their way through 13 tough location-based challenges in a bid to win the 2013 title, R500 000 cash, a Renault Koleos and vehicle accessories valued at R15,000. Locations include the bleak Jozini Dam and the lush Tsitsikamma forest, and allow the Big Blue to showcase its offering of fresh, local, sustainable and proudly South African goodies.
Comment: When we grow up, we want to be a Braai Buddy.
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Massmart Where are they now?
Remember the Game 503? They were the retrenched workers whose reinstatement was adopted as a condition for the Massmart/Walmart merger going ahead, way back in 2010. Back then, Massmart put out the call via press ads and email for the workers to present themselves at their nearest stores to get rehired. About 300 responded. This year, the Men in Black were ordered by the Competition Commission to reinstate the remainder, and given a September deadline which has now passed. Part of the difficulty, say Massmart, has been getting hold of the people in question. Not so, say SACCAWU who with admirable efficiency have presented Massmart with a list of names, addresses and proof of prior employment. Massmart argue that to date they have complied with both the spirit and the letter of the agreement.
Comment: More for Massdiscounters to worry about at a time when that business has worries aplenty on its plate.
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Africa Cash & Carry Here’s how you do it
Rather than grinding out the spreadsheets and squirreling away the share options against a rainy day, Africa Cash & Carry financial director Cassim Aysen allegedly (we are careful to add) opted to bet it all on red as it were and execute a scheme of breath-taking stupidity – of the sort that is close to genius – in his quest for an accelerated payday. Having got a willing supplier on board (any ideas who? Ed) he bought that supplier’s stock at an inflated price, then sold it back to them at a discount, snaffling up R42million in kickbacks for his pains, and leaving the supplier in question to dispose of the goods more profitably elsewhere. But rather than fessing up and extending his wrists helpfully for the manacles, Mr Aysen – who it somewhat self-defeatingly turns out is a 25% shareholder in the business – is contesting the charge on the apparently frivolous grounds that the investigating officer had not dotted his i’s or crossed his t’s with the requisite precision.
Comment: And it would have worked, if it weren’t for those pesky kids!
MANUFACTURERS AND SERVICE PROVIDERS
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Pioneer Frontier wars
Earning those calluses this week were Pioneer, who ground it out through difficult trading conditions for a 10% increase in revenue to R18billion for the eleven months to August. This despite an average of only 3% volume growth across the group’s basket, with wheat consumption (a key box for Pioneer to tick) down 1.2% for the industry and maize up only 0.7%. And if you thought the chicken boys have it tough (which they do), the likes of Pioneer are dealing with the Thai rice pledging scheme, aimed at helping rural farmers (what other kind are there? Ed) by which a huge rice stockpile is maintained at artificially inflated prices, leading India to flood the market with cheap rice exports, and Pioneer to scrap it out for what remains of the market. A bright star in the Pioneer firmament this year has been Ceres, which has regained market share profitably, and whose beverages (our US correspondent reliably informs us) may be found on the shelves of Whole Foods.
Comment: Rice now. What’s next: biltong?
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Clover Milking it
An OK year under the circumstances, which is what you could say about pretty much anyone these days, from Shoprite on down. Clover totted up sales of R8billion (up 10.7%) for the year to June, compared with 10.4% last year. Operating profit, however, was up only 5.4% to R391.4million compared with 16.4% last year, a result, they say, of tricky trading conditions and investments in projects. Specifically, one supposes, the dashingly-title Project Cielo Blue, a massive re-engineering of the business to generate greater efficiency, which this year saw the relocation of machinery between plants and the unfortunate retrenchment of staff, at a cost of R26.2million. Greater competition in the market – particularly in the long-life category – had meant price cuts, which further eroded profits. Coming down the track, expansion into Africa is planned, with facilities under development in Nigeria, Mozambique and Angola.
Comment: Big picture boys (and girls) over at Clover, who seem in it for the long haul.
TRADE ENVIRONMENT
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Retail Sales Rollercoaster wars
Things could be more buoyant in this great sector we call home, as evidenced by retail trade sales, which the hoary sages over at StatsSA tell us edged up only 2.8% in July (although in fairness this was double the rate for June). Inflation, they also inform us, was up 6.4% in August from 6.3% in July, mainly due to rises in food and petrol prices, and chipping away as it does at the old disposable, this goes some way to explaining the disinclination of households to up their spending in the supermarket to any meaningful degree. While the rise is supported by other economic data, don’t look for huge improvements any time soon, with GDP expected to top out at 2% this year and improvements, if any, expected only next year, and that dependent on a general recovery from this sluggish ambit globally.
Comment: And for this, also, one should not hold one’s breath.
IN BRIEF
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Wholesale Big box, big heart
And lest you find the gloom of these times overwhelming, a ray of hope from the wholesale sector, which recorded a sales increase of 8.5% year-on-year for the month of July, compared with 6.4% in June. In real terms, sales rose 0.5% from June to July, which in these difficult days is not to be sniffed at.
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Uncle Sam Hope-y, change-y, farm-y
And one last little pick me up if the wholesale story didn’t lift your mood. We return quite aptly to the USA, whose representative in the agriculture department of the local embassy has expressed to Agriculture Deputy Minister Pieter Mulder that they are quite keen to import more produce from South Africa. This after President Obama expressed his support for the extension of the African Growth and Opportunity Act (Agoa), which expires in 2015 and by which Southern African countries are able to ship certain products to the US tariff-free.
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