
THIS ISSUE: 28 Feb - 06 Mar
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Shoprite Our petrol card is in the other car…
Claiming that e-tolls will cost the business R4million in additional distribution costs per annum, Shoprite are applying for exemption from the Purple Pickpocket’s depradations. Their argument is that e-tolls will drive up food prices for everyone, and this cannot be a good thing. Shoprite currently run a fleet of 529 trucks, collectively covering 140, 000km every day, much of it on the soul-sucking tarmacadam of Gauteng. Their contention is that these vehicles should occupy a similar niche as exempted public transport – an argument with which certain fine legal minds beg to differ.
Comment: At R4million a year, they might consider just kicking the increase back up to the supplier. Although we’re sure the thought has never crossed their minds…
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Food Lover’s Market By appointment…
Wo-hoah! Food Lover’s Market soon be stocking 200 Waitrose products on its shelves under an agreement with the posh UK retailer, who, we are told, has long-harboured aspirations of entering the more rarefied regions of the South African retail space. Synergy, core values, high quality innovation etc. Food Lover’s, as you are no doubt aware, currently runs 120 branded stores across the motherland and northward, as well as 154 FreshStop forecourt stores at Caltex garages. While FVC is primarily a fresh produce retailer, the Waitrose lines will include ambient and frozen products, including frozen ready meals, tarts, cakes and ice cream, as well as rice, pastas, coffee and canned foods.
Comment: Helping them compete with Woolies, no doubt, in those locations where they share clientele, ahem. And speaking of Woolies, has anyone been on the Waitrose site lately? (http://www.waitrose.com)
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Massmart The silver linings playbook
Solid set of numbers from the Men in Black: group sales up 9.8% to R72.3billion for the 53 weeks to the end of December 2013, with operating profit up a hefty 26%. On a more cautionary note, trading profit declined by 0.1%, and 52-week comparable sales grew at just 3.8%, although the outlook for the first nine weeks of the new financial year is a little more sunny with comparable sales up 7.7% off a 9.5% increase in total sales. Makro and Massbuild continue to please while the Massdiscounters division – i.e. Game, is still causing Mr Pattison sleepless nights by his own admission. Although he’s sanguine about its prospects and believes that the continued expansion of Foodco – now in 48 Game stores – should increase footfall and lead the punters on to higher-margin merchandise which they currently aren’t coming in for. Generally, Massmart believe that with food now launched, operations under the new Walmart regime bedded down and Africa now entered, things are going to start looking up.
Comment: And the punters who flocked to the share after the release of the results seem to agree.
MANUFACTURERS AND SERVICE PROVIDERS
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Adcock Ingram Naughty or nice?
Much as he wanted one, Santa didn’t leave an Adcock under Brian Joffe’s tree last Christmas. This is a metaphor you understand; we make no assumptions about Mr Joffe’s actual holiday traditions. But while it is true that Bidvest failed to acquire Adcock last year, the new year has bought some measure of comfort: chairmanship of the Adcock board after Joffe’s Bidvest and the PIC – who jointly hold 55% of Adcock stock – demanded the resignation of previous chair Khotso Mokhele. Punters are excited by the appointment, particularly in the light of Bidvest’s results for the year to December – revenue up 19%, HEPS up 16%. Mr J has remarked that he would like to see existing management at Adcock get the opportunity to demonstrate that they were up to leading the turnaround.
Comment: Cue ominous cello.
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BAT C’mon baby light my fire
Look, it’s not Humphrey Bogart in Casablanca, we’ll grant you that, who certainly inspired us to keep on smoking back in the day. But in their bid to keep ahead of the curve, British American Tobacco are introducing a new e-cigarette into the market, this one rather sexily based on asthma pump technology. Last year they got the jump on competitors with their catchily-monikered Vype e-cigarette. It’s a market worth tapping: Euromonoitor International reckons that global sales of e-cigarettes are likely to break $5billion this year.
Comment: Nevertheless, we kind of miss the more traditionally named gaspers: Rothmans. Benson and Hedges. Dunhill. Or if your tastes tend westward, Peter Stuyvesant or Paul Revere.
TRADE ENVIRONMENT
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GDP Grinding it out
GDP was up 3.8% quarter on quarter for the final three months of 2013, ahead of the expectations of the wide-eyed ramblers who follow the path of the economist, and waaaaay ahead of the 0.7% it managed in the third quarter, beset as that was by strike action, the cessation of which was perhaps the main contributor to growth. But let’s play the game and look at those sectors anyway: the main contributors were manufacturing (1.8 percentage points), and the mining and quarrying industry (0.8 percentage points). For the year, now, growth was a muted – a practically silent – 1.9%, down from 2.5% in 2012. The good news is, the economy should benefit later this year from stronger global growth, a weaker rand and increased spending on infrastructure by the government.
Comment: Frustrating.
IN BRIEF
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Fairtrade In all fairness
Fairtrade has been advocating for the small third world producer and ensuring a better deal for twenty years now, and it’s paying off: revenues on Fairtrade products in the UK last year were up 14% to £1.78billion, with some categories cleaning up – like sugar at 25% and chocolate at 52%, and others not so - cocoa and bananas grew at only 5% and 4% respectively.
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Clover Milking it for all it’s worth
Clover opened the doors on its newly expanded production and distribution facility in Queensburgh, Durban last week. The refurb cost R171million and is one of the more recent jewels in the Cielo Blu crown, Cielo Blu being the alluring title of the major Capex project Clover launched after listing in 2010.

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