
THIS ISSUE: 09 Nov - 13 Nov
YOUR NUMBERS THIS WEEK
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Walmart Dear Sir or Madam
Last week we reported on Woolworths’ speedy withdrawal from the chaotic juggernaut of Sub-Saharan Africa that is Nigeria. Now Massmart are issuing sternly-worded exhortations to the effect that it needs to get its act together. Ex-CGCSA CEO and current Africa Food Retail and Supplier Development Executive for Massmart Mncane Mthunzi, speaking at last week’s somewhat grandiosely-tilted World Retail Congress pulled no punches, speaking out against the lack of political will, which sees a lack of delivery in the basics like electricity and an abundance of the stuff you don’t want, like corruption. This notwithstanding (ahem) Massmart has been persuaded not to reconsider its investment in Nigeria, in part by the efforts of a delegation of politicians who made their way to Walmart’s underground operations centre in Bentonville, Arkansas, to persuade The Big Guy to stay the course in their promising, but frankly loony, country.
Comment: That’s Nigeria, of course, not Arkansas…
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Oxford The upper crust
Oxford Freshmarket, which like its predecessor Cambridge will one day be sold for a truckload of cash to Massmart, opened its second store in October, in Hillcrest outside Durban, and so far things are going pret-ty nicely thanks. While the existing Bluff store is currently turning over R400million per annum, that’s on a trading floor of 2400m2. Hillcrest is on course for R320million, on just 1400m2, for a very high trading density of R190,000/m2, compared, say, with R106,000/m2 for Woolies, just to pull a name out of a hat. And as it happens, Woolies, according to Brett Latimer the Durban boytjie who started it all, is very much in Oxford’s sights. “We will take them on wherever we can,” he says, with an ebullience we believe to be characteristic. Oxford is targeting four new stores in KZN in the near future, and will surely go national sometime thereafter. And already, says Latimer “a major player wants to take a stake.”
Comment: All very exciting. But more exciting would be the emergence of an independent chain able to take on the Big Six without being bought out.
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SPAR Weighing anchor
SPAR has informed us with sadness and regret that Wayne Hook has resigned as CEO in order to focus on his family over a difficult time for them all. Mr Hook will continue with the SPAR Group in a development role and as a director and, as such, his skill and experience will continue to benefit the SPAR Group.
While the resignation as CEO will not come as welcome news to investors, Hook having steered the business with a steady hand since taking over from Peter Hughes in 2006, they will be encouraged by the speedy appointment of a successor. Graham O’ Connor, formerly MD for KZN and a partner in five SPAR stores, will be stepping up to the plate in January, bringing a balance of distribution and retail experience to the position.
Comment: SPAR is by its very nature a business of families – from those who own and run the stores to the extended family at head office and in the DCs. For this reason, suppliers and shareholders, as well as the SPAR team itself, will no doubt be supportive of Mr Hook’s very difficult decision. We wish Mr Hook well in the months and years ahead. You will always be the Captain to us, sir.
MANUFACTURERS AND SERVICE PROVIDERS
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Oceana There’s something fish…oh, shut up!
In one of those oddly spiteful moves (perhaps inspired, if that’s the word, by the recent travails of Mr Ramburuth) the Competition Commission has decided that Oceana can buy the fishing business of Foodcorp, if that’s what it wants to do, but not, get this, its most famous brand, Glenryck Pilchards, which goes head to tiny, silver head with Oceana’s equally iconic Lucky Star brand. It’s still a sweet deal though - Foodcorp's fishing business involves the harvesting‚ processing and selling deep-sea trawl hake‚ south coast rock lobster and small pelagic fish such as pilchards‚ anchovies and red eye, and the acquisition essentially removes Oceana’s main competitor from the market.
Comment: Perhaps Glenryck might be bought by a consortium of South Africa’s wry and witty graphic designers, who have been ripping it off one way or another for decades…
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Unilever Cool moves
Le Grand Bleu is once again voting with its footprint, expressing further confidence in the appetite of the South African consumer for frosty treats with a spanking new R500million ice cream factory in the airy environs of Midrand. Unilever’s Ola brand, as you know, is the market leader in ice cream, churning out such favourites as Magnum, Solero, Cornetto and Paddlepop, which find a particularly eager consumer base in Gauteng. The factory which will create 180 permanent jobs and spans 40,000m2, is a collaboration with the Department of Trade and Industry, which will pump R7million into Unilever’s employee training programme under a tax incentive awarded to projects in industrial parks and zones.
Comment: An antidote to the gloom which sometimes pervades the editorial pages these days. Nice one that well-intentioned and savvy multinational.
TRADE ENVIRONMENT
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Social Media Face the music
Today’s dialed in wired wireless mobile modern consumers like to interact through social media, we are told by Dimension Data in their otherwise groundbreaking Global Contact Centre Benchmarking Report. And what they really love is seeking advice from and having a jolly old whinge to each other before getting on the blower to the call centre, thank you very much. And businesses are not jumping on the opportunity nor quashing the challenge this trend represents, using their own social media sites as marketing tools and little else. Technology is now available which at a very reasonable price, will allow call centres to integrate and control a range of multimedia; including video chat and social media channels like Twitter and Facebook, providing a more multichannel experience when it comes to complaints and queries.
Comment: At which point we are just about holding onto sweet, sweet comprehension with our fingernails. Our nephew has one of those Facebooks, you know.
IN BRIEF
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Diageo Baby steps
Here’s one for you: Americans each consume about 7.4l of the good stuff every year, while the Russian march, reel and stagger through 20.9l each, on the daily realization that they are a) Russian and b) In Russia. Nigerians? It only takes them 0.3l per annum to cope with the kind of pressures Mr Mthunzi was decrying a few stories ago. And this has led Diageo to the realization that smaller bottles might be the way to reach Africa’s more modest topers, so they’re bringing out a little handily-sized 200ml bottle of Johnny Walker Red for sale in West Africa.
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Canned Fruit You’ll never take me alive, said he.
You will no doubt be gratified to know that Australia has graciously agreed to let us continue to supply that arid wasteland and its benighted denizens with our good South African canned fruit, which makes up 40% of all processed fruit consumed down there. This after their anti-dumping authorities found no grounds for implementing provisional safeguard duties on South African canned-fruit producers, following a preliminary investigation. In exchange, apparently, we’ll let them continue to smuggle their sides of kangaroo into our biltong factories.
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