
THIS ISSUE: 20 Mar - 26 Mar
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Massmart Small screens, big boxes
Continuing their charge into territory occupied by the more traditional food giants is Massmart, this time wielding like a mighty sword is Makro’s new online shopping portal, currently beta testing but fully operational and available for a squizz right here. The cognoscenti inform us that it’s super-easy to navigate. While food and groceries are not functional yet, they look pretty much good to go, and seem to focus on the bulk quantities so handy for the harried householder come month end, at the attractive prices one has come to expect from the Men in Black.
Comment: With SA’s relatively small online shopping market and the challenges of distributing small orders to multiple addresses, this might prove the best model yet for internet groceries. We look forward to the hard launch, if that’s what it’s called.
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Shoprite A whiter shade of retail
Just so they’ll never have to prove their gung-ho credentials to anyone, ever again, and also for the $$$, Shoprite are launching their newest Nigerian store in Kano, chief commercial hub of the troubled North, and itself something of a basket case: power supply problems, factory closures, an economy which was struggling even before the start of the Boko Harum Islamist insurgency, 67% unemployment, you name it. But on the upside – a huge and under-serviced population, and a home in the $110-million Ado Bayero Mall, Nigeria’s largest. Shoprite are once again voting with their wallets, shelling out $20 million on the store which will bring to eight the number they have in Nigeria, a market we confidently predict they will dominate in the years and decades to come.
Comment: A troubling trend, though, this new tendency of insurgencies to name themselves after seventies prog rockers.
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Pick n Pay Lest we forget
The Big Blue have donated R4.5 million to the new Nelson Mandela Children’s Hospital in Gauteng, and R500k from the regional teams to various other children’s charities. These are the proceeds from the trading of their stores on December the 15th, a day most of the other retailers elected to close their stores as the country marked the funeral observance for Madiba. This, says Mr Brasher, is in fulfilment of the opportunity afforded by the retailer for staff and customers “to contribute in a very tangible way to Mr Mandela's legacy.” The donation is all above board and legit, naturally, and was audited by KPMG who have confirmed that this indeed exceeded the profits for the day.
Comment: We report this story as a little reminder of our great loss and the man’s great legacy – both of which seem to have faded in the rush of intervening events.
MANUFACTURERS AND SERVICE PROVIDERS
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PepsiCo I hear the drums echo in the night
A couple of not unrelated items concerning that other purveyor of sugary brown liquid, PepsiCo. Firstly, an eight member team from around the world recently travelled to Limpopo to help local subsidiary Simba in its various sustainable community farming projects. The team will assist in value chain analyses and business development plans for various local agri-businesses and associations and will also be involved in supporting the role of the women and girls in the community by mentoring young girls from the local school. Secondly, PepsiCo have committed to taking steps to prevent the suppliers of its raw materials such as sugar and palm oil, from illegal land seizures. This follows a similar commitment by rival Coca-Cola last year in response to a campaign by Oxfam that promotes the improvement of ethical standards among suppliers to the grocery industry.
Comment: Heady stuff, both ways, and timely acknowledgement that the value chain extends all the way back to the communities on whose land the raw materials are produced.
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Unilever We still got the blues for you
As you know, Unilever, being unlisted on these shores, does not have to stoop to revealing its performance to grasping shareholders and grubby analysts twice a year. But a fascinating window into the dings of Le grand Bleu is to be found in a perusal of the results of Remgro, which owns 25.8% of Unilever stock. And this year – sadly – it’s all pretty much as expected: echoing the travails of rivals AVI and Tiger Brands, growth was muted at 8.9% to R8.9bn for the six months to December, with profit after tax declining by 3% to R1.03billion. These numbers, you will recall, are not dissimilar to those of the aforementioned rivals, who each posted turnover growth of 10%. Pleasing performers for Unilever have included home care, ice cream, savoury and dressings categories, where volumes are up, and personal care, which has held its own. On the downside, things aren’t as pretty in the homecare segments where their flagship washing powders have entered into some pretty choppy competitive waters.
Comment: Definitely a bit tricky for everyone out there in the current socio-economic climate.
TRADE ENVIRONMENT
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Retail Sales Sale into the mystic
Sighs wearily). Oh well, suppose we’d better have a look at January’s retail trade sales figures then. You know, the ones which tell you how the apothecaries and tobacconists and traders in wrought iron and glassware are doing. Those. We said January’s…these are January’s? That can’t be right! Up 6.8% year on year, confounding once again the dire predictions of the economists, who pegged it at closer to 2.6% yet mysteriously woke to continued employment on Monday morning. That put the numbers at a year and a half high, a fact that some analysts, casting blindly about for reasons, say might be due to the fact that a poor December left many retailers overstocked and inclined to discount everything in sight. General dealers were the main contributors this time around, with durables like furniture and appliances not looking too clever.
Comment: A riddle wrapped in an enigma wrapped in a wilted economist, especially as the dear old SA consumers continue to take as much strain as they've taken since the days of the great recession.
IN BRIEF
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Massmart (2) What’s the name of the Game?
As variously reported in the Ghanaian press, Game stores in that plucky West African economy will soon be rebranded as Massmart, Mass-Mart or Mass Mart. One wonders whether this is a test for a wider rebranding to bring things more closely in line with the Walmart mother-brand, or to reforge, so to speak, one of the weaker links in the Massmart chain. Perhaps both.
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Wine A long walk to the bottle store
Madiba’s eldest daughter Makaziwa and a granddaughter, have launched their collection of Mandela-themed wines in Holland, you’ll be curious to know. The Thembu Collection, as it’s known in reference to the family from which the great man sprang, includes two whites and two reds, one of them a “feisty merlot” which caters to the apparently very specific tastes of the Dutch palate. Who knew?

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