
THIS ISSUE: 03 Jul - 10 Jul
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Woolworths Big Brother is watching you
So right after Woolies made their “best and final offer” of $213million and $17 per share to buy out Country Road, the Australian Securities and Investments Commission (ASIC) has stated that the Dapper One should provide an independent valuation of Country Road due to concerns that Cap’n Lew, or “Red Solomon”, as we have become fond of calling him, may benefit unfairly from selling Woolies his stake. “Despite having 17 years to do so, Woolworths did not decide to make the takeover offer until Mr Lew acquired a material stake in David Jones,” the regulator said, Unfair, they say, since other David Jones shareholders are not being “offered” similar benefits and that this really just seems to be all about a stalemate that had nothing to do with David Jones in the first place.
Comment: And so the soapy saga continues…
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Pick n Pay Hi ho, hi ho, it’s northward bound we go
PnP’s JV in Zim’s TM (and that’s about as many acronyms as we can muster for now) is closing some of its stores, but converting one to a Pick n Pay outlet in October, this after the Big Blue One has already branded two stores in the nation’s capital in a bid to increase its presence up north of our borders. It aims to brand five more stores over the next two years, increasing trading space by 18%, while TM continues to revamp stores so as to compete with OK Zimbabwe, who is doing lots of shaping up of their own. The new PnP store will be located slap-bang in Harare’s CBD.
Comment: Interesting dynamics in a country where margins are low and local stock difficult to source… but don’t let that stop you now.
MANUFACTURERS AND SERVICE PROVIDERS
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Aspen Share and share alike
An Aspen shareholder, one Mr Owen Nkomo, executive partner at Inkunzi Investments, is just a little miffed that smaller shareholders like himself had no idea of what was going down (ahem) when Aspen’s shares fell the most in five years just a couple weeks back, as a result of a “disappointingly lower second half”. So miffed was he, in fact, that he has sent a formal complaint to the JSE asking them to investigate the matter. See Aspen did host a pre-closed period conference call with members of the investment community, but no price sensitive information was mentioned during the call, which therefore means that no JSE rules were breeched. “As a matter of principle, this issue is important,” said Mr Nkomo. “The question is, how does the JSE avoid this happening in future?”
Comment: : Indeed, although analysts overall still expect Aspen’s earnings to grow 28%, which will no doubt make the little guys smile again.
TRADE ENVIRONMENT
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Consumer Confidence Retail therapy will never die
Get this… so despite the fact that our economy is hobbling, to put it politely, consumers have perked up following Q1’s Consumer Confidence dive to -6 points, with the index now pumping at 4 points for the second quarter of 2014. And it seems that the more you earn, the more care-free you are about spending, although some experts think this could also just be a case of big talk, (like little Sally boasting about her 1,000 Barbie dolls back in grade 1) while consumers are actually smarting privately back home. All the usual suspects that impede spending are still on the loose, say those in the know i.e. high fuel prices, rising food inflation, industrial action, low job creation, etc. etc. etc. and it seems that families might be skimping – or taking on more onerous credit deals – to keep afloat. So although consumers at the moment may be rather chipper, all the indicators still point to a weak economy and the index still remains below the long-term average of five points.
Comment: Easy does it then tigers…
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Credit Rating Not again…
As you will recall, a few weeks back SA’s credit rating was downgraded. Well, now Moody’s Investors Service has been kind enough to inform us that it might happen again. Why? Well it’s that same old, same old we spoke of in the previous story… ongoing strikes, government’s inability to reign in debt, and so on and so forth. That moody old Moody has been negative about our prospects since 2011, but they’re not alone, with S&P downgrading us to their lowest investment grade level last month. What could another downgrade mean? Well, it could hurt the state’s finances and lead to a massive correction on the JSE since many large investors are not mandated to hold junk bonds and would be forced to sell.
Comment: And although we’re not exactly experts in matters of the bourse, it doesn’t exactly sound like a good thing, now does it?
IN BRIEF
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Trade Intelligence Read all about it!
It’s not really like us to honk our own horn, but sometimes we just must. Leading provider of insight into the local retail sector, Trade Intelligence (that’s us *wink, wink*) has refreshed its oh-so informative MyCustomer workshops with new content and rebranded the series under a snappy new name, Tradescape. ““The name change is an evolution not a replacement! The content is richer with the knowledge you need for the FMCG workplace!”,” says Trade Intelligence MD, Maryla Masojada, and the three main programmes within the Tradescape offering will continue to offer those who work in our beloved industry the most up-to-date trends and context to build strategies to make even Shaka Zulu’s bull horn formation envious. Click here for more
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Shoprite Cut your losses and move on
So right after Shoprite announced their exit out of Tanzania, they are dead set on expanding into Nigeria. Why wouldn’t they want to invest in the largest economy in Africa? The aim is to open over 200 stores there over the next five years, with another five stores due to open by the end of the year. And we have every reason to believe that Shoprite is investigating opportunities to add stores in the cities of Apapa, Festac and Ota and some parts of the South-South (that’s very South to the rest of us) Zone of Nigeria.

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