
THIS ISSUE: 10 Apr - 16 Apr
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Massmart It’s too soon!
Well damn it all to bleeding heck. Boy wonder and Massmart CEO Grant Pattison, a favourite of ours these how many years (It’s seven. Ed) has upped and thrown in the towel. “Why?” you howl, as we did, “Why?” The theories are legion. The man himself says that having reached the ripe age of 43 it’s time for a change and if his remaining years as a young executive are to be productive ones, that change should be now. Others hint that the Walmart merger has not been without its frustrations and pressures, and that family time beckons. And there has even been word (hard to credit) that Mr P has a future mapped out in the food service industry. One-time rival for the top spot, COO Guy Hayward, will be taking over, effective 1 June, an announcement the markets have greeted with some relief.
Comment: Whatever the future may hold it would be hard to fault Mr Pattison’s tenure at Massmart, where taking over from the brilliant Mark Lamberti he shepherded his charge profitably into food, sustainability, Africa and a partnership with the biggest retailer in the world.
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Woolworths If we may…
Down in the blasted Antipodes, Woolies have mounted a successful takeover bid against the piratically-named David Jones, a struggling chain of department stores, which was involved in simultaneous discussions with Aussie retailer Myers, who, you will be pleased to know, lost out. The Aussies reckon this is a good thing. They like Woolies’ performance (20% growth per year over the last five years) and they like Ian Moir, who did such good things with Country Road down there and who is saying he could add A$130million to the David Jones bottom line within five years. The deal will enable Woolies to grow its fashion business in the Southern Hemisphere, taking advantage of seasonal commonalities, while bringing its tight handle on the supply chain to a business which seems to have lost its way. The deal is worth a reported A$2billion, to be raised via debt and equity in unspecified proportions.
Comment: And a great South African business does it again, this time with its largest and most ambitious acquisition ever.
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Pick n Pay … but it is, perhaps, the end of the beginning
More than a glimmer of hope there from The Big Blue, with sales up 7.7% to R63.1billion on a 52-week comparable basis and trading profit up a handsome 18.5%, after three straight and sorry years of decline. Admittedly, overall growth lags the market, although it outstrips internal inflation which is running at 5.3%, a number they were at pains to emphasise when reporting the results. But the indications are that the turnaround strategy is working, with the investment in centralised distribution starting to pay off, with efficiencies coming on stream and with a more robust store opening regime starting to take effect. Then there is the steady hand of Mr Brasher on the helm, which also seems to be doing its bit in guiding Pick n Pay on a more promising course.
Comment: Welcome back, big guy. It’s been too long.
MANUFACTURERS AND SERVICE PROVIDERS
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Lettuce Hot and heavy
Hot weather followed by heavy rains have done for the lettuce crop in the country’s main growing areas, leaving fans of the fresh and crunchy frustrated as they stand before the gleaming empty racks of the fridges in the veggie section at Woolies, Pick n Pay and elsewhere. Fruit & Veg City, in the meantime, have more than doubled prices in the last month. And it’s not just lettuce, it’s cabbage, spinach and herbs too. On the upside, though, supplies should be back to normal within the next four weeks.
Comment: Perhaps it’s wrong to blame too much on climate change. But this at least is what climate change might look like: when conditions exceed the very narrow bands in which various types of produce prefer to grow … no more food. If it happens with lettuce, it can happen with maize.
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Futurelife …I gotta wear shades
Durban outfit Futurelife, having made inroads into Angola and Uganda through a JV, are about to launch in the United Arab Emirates after a successful outing at a trade show there recently. Futurelife market nutraceuticals – highly nutritious and adaptable porridge-like products which may be mixed with water rather than milk, and while good for day-to-day nutrition have proved their mettle in famine relief and the sustenance of chronically ill patients. They have recently introduced functional foods to their stable – foods which target one or more functions of the body, and which have added health benefits. They are moving into yoghurts and a ready-to-drink brand next. The business, you will be interested to know, is run by Paul Saad, energetic brother of Stephen, who runs a little outfit called Aspen.
Comment: Ex Durban semper aliquid novi, as Pliny the Elder might have said, had he written for the business pages.
TRADE ENVIRONMENT
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Interest Rates Occupy Mzansi
To the barricades, comrades! The running dogs over at the IMF have decreed that our Republic needs an interest rate hike if it is to avoid further capital outflow and the prospect of our rand drifting off on the unbearable lightness of its own being. Or something. The Brahmins of global finance can be pretty impenetrable, have a read of this: “Fiscal and monetary policies may need to be tightened to lower the country’s vulnerabilities and contain the second-round impact of the depreciation on inflation.” See what we mean? They might have a point though: the rand has gained 8.1% against the dollar since Mrs Doubtfire over at the Reserve Bank hiked the repo rate to 5.5%, after losing 19% of its value since the beginning of 2013.Comment: Cold.
IN BRIEF
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Massmart Gonna take a lot to keep me awaaaay from yooooouuuuuu…
And in other news, The Men in Black have announced that they will be opening their first two stores in Angola in 2015, with another couple to come in 2017. And as readers of these pages will know, they’ve broken ground on their first Kenyan store after failing in their attempt to acquire a stake in (Nakumatt) there.
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SABMiller Set phasers to stun
Norman Adami is stepping down as chairman of SABMiller Beverages South Africa from July, which will be a blow for those of our readers who like their corporate leaders to be named after Star Trek villains. Of at least equal significance is the fact that SABMiller’s South African and African regions will be consolidated into one region for management purposes, with Mark Bowman, currently managing director of SABMiller Africa, stepping in as MD of the enlarged region.

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