
THIS ISSUE: 27 Mar - 03 Apr
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Woolworths Look sharp
So it has come to this. The Australians, not content with the frequent humiliations they deal to us on the field of play, now presume to advise us on how to dress. Or so we must surely believe as Aussie brands Mimco and Witchery – the former a retailer of knickknacks, gew gaws and accessories, the latter a high-end fashion shop – open in standalone and store-within-a-store locations under the Woolworths umbrella. According to Mr Moir, these brands will place the stamp of authority on Woolworths’ leadership of the local fashion scene. And in other Woolies news, The Dapper One is about to conduct South Africa’s first clothing sizes survey, and not before time.
Comment: Please: shirts that you can wear untucked and don’t reach your knees, which would be a first for SA. Or is that just us?
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Massmart Up, up and away
Cambridge Foods, it seems, has been a tidy little earner for The Men in Black since they purchased it just five short summers ago from Durban boytjie Brett Latimer, who started it in the 1990s (and who is now busily building his Oxford empire, no doubt with a future transaction in mind). Massmart increased the Cambridge footprint with the acquisition and rebranding of a range of similar businesses (Savemoor Thembisa, the Rhino Group) and now run 47 of the cheerfully-liveried emporia at bustling commuter hubs and other suitable locations nationwide. But they’re not stopping there; oh, no: they’re targeting 100 by the end of 2017. On the downside, Masscash, the division in which Cambridge is housed, has seen tough trading conditions of late, growing just 3.8% comparably in the FY just ended, as its LSM 2–7 base feels the chill winds of an ailing economy.
Comment: We are watching the continued evolution of Massmart with great interest.
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Shoprite Hakuna matata…
Shoprite’s decision to exit the perpetually bad-tempered geography of Tanzania looks increasingly like a good idea. The latest – 100 workers have taken The Big Red One to the Tanzanian equivalent of the CCMA in a benefits dispute which has subsequently gone to the Labour Court. This in the final, dying hours before Shoprite hand their three stores over to Nakumatt, who purchased them in a four billion shilling deal. Nakumatt have been trading there since 2011; Shoprite since 2001. While Shoprite, as we have seen, have an appetite for difficult and chaotic markets, Tanzania, where the government took them on for a preponderance of South African product on the shelves, was a bridge too far.
Comment: There’s that famed pragmatism the punters know and love.
MANUFACTURERS AND SERVICE PROVIDERS
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Tongaat Hulett The sweeter deal
Opportune Investments (8.5 out of 10 for Honesty in Naming), a minority shareholder of Tongaat Hulett believe that the sugar behemoth should reduce its exposure to the granulated stimulant, focusing instead on the development of its massive portfolio of prime land. While a protective tariff is about to kick in which should shield Tongaat and others from the worst effects of dumping by countries like Brazil, and while a poor Brazilian harvest might provide some comfort in the next year, turning the shimmering hillsides of KZN’s canelands into golf estates and the light industrial zones which abut them has of late been a more profitable enterprise for the group, and Opportune want to see more of the same.
Comment: As the dangers of sugar consumption get more exposure, this might not be a bad idea…
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Maq Powder keg
Remember Maq? That plucky little brand marketed by Durban startup Bliss Chemicals that went up against OMO and, well, didn’t win exactly, but made a dent? They’re still at it, going up against the big boys on price (R22.99 compared with R26.99 for Sunlight, R31.99 for Omo and R31.99 for Ariel), and still trading. While Unilever’s market dominance remains intact, the entrance of Ariel by P&G has caused some waves, heating up the price war, and importantly for retailers providing some choice for punters on the shelves. But to put things in perspective, Maq own around 8.7% of the market, while Ariel claim 8.5%. Sunlight, by contrast, have declined to a still massive 41.1%.
Comment: In these difficult times, it is important to remember that the marketing of brands to consumers is not a zero-sum game, nor should it be. Viva choice.
TRADE ENVIRONMENT
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Inflation Rate this
Mrs Doubtfire over at the Reserve Bank is going to do us all a solid, if she’s to be believed, and not raise the prime lending rate to the extent that it will threaten economic growth. And we have reason to take her seriously, apart from those stern tortoiseshell frames: the Monetary Policy Committee kept things unchanged at 5.5% last Thursday. However, inflation – joining us as the unwelcome guest at our meager feast these how many months – must be curbed somehow. Inflation for the remainder of this year is expected to average 6.3%, uncomfortably above the Bank’s targeted upper limit, but next year looks a little sunnier, at a downwardly-revised 5.8%. However, with food and fuel spiking on the weaker rand, it’s likely to be a little rough for a while.
Comment: The answer, of course, is more economic growth, which is currently staggering along at under 3%. Come on, team.
IN BRIEF
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Tiger Brands The Magic just wasn’t there…
While we’re on the subject of retreat from East Africa, which we were a few paragraphs north of this, Tiger are abandoning their acquisitions of Rafiki Milling and Magic Oven Bakeries in Kenya, with no reasons given. They remain bullish – or rather large predatory cattish – about prospects for that challenging market and Africa in general.
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Astral Foods There’s a starman…
Oom Jurie Geldenhuys, one of Bosman’s most beloved characters and Chairman of the Astral Board for the last six years, is retiring to his stoep in the Marico, where he will puff contentedly upon a meerschaum pipe, scatter corn for the chickens and entertain his neighbours with stories of dubious provenance.

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