Trade Intelligence Logo

The Big Red One continues on its relentless drive to bring everyday low prices to South Africa’s deserving, wherever they may be found. And this week, they may be found in Langa, Cape Town, where a spanking new Shoprite has touched down at the Langa Junction, and in Dawn Park, Gauteng and in Ixopo, whence you may recall a lovely road runs into the hills, which are beautiful beyond any singing of it. There’s also a new Checkers in gay Parys. Shoprite (The Group) has opened 27 supers since July last year, and is on track for 25 more by the end of June. In recent years, it’s been targeting residential areas and commuter hubs, in order to save it customers on transport, which consumes a sizeable chunk of their disposable income. And importantly for those of us in the Beloved Country, it has created 8,000 new jobs, which are in increasingly short supply.

Comment: Just some store openings, really. But it's the why, not the how and the what, that makes Shoprite great.

Comment: Torrid times. Good luck, those Men in Black.

In the interests of bringing punters in store for A then taking the opportunity to sell them B, Pick n Pay have announced a partnership with budget domestic carrier FlySafair whereby you’ll be able to book your tickets online then pop down to your nearest Pick n Pay to pay. Later this year, you could both book and pay for the tickets at the Pick n Pay Money Counters which will be rolling out in select stores nationwide. You’ll also be able to put your SmartShopper points towards the price of the fare should you so wish. The idea is that South Africans do not fully trust the integrity of online payment arrangements, having been ripped off in so many other areas of their commercial lives, and that this will make them feel much safer. According to the 2015 Effective Measure state of South African eCommerce report, distrust around online payment methods is one of the largest barriers to eCommerce in SA. Also, many South Africans, while flush, lack the necessary credit cards to make online payments.

Comment: Smart move, PnP, which should bring the Big Blue a little closer to Shoprite in its instore-services offering.

Meanwhile, in the US, employees at Kraft are nervously eyeing their 401Ks and dusting off their resumes as the merger with Heinz – under the management of notorious cost-cutter Bernado Hees – looms like an eighteen wheeler on the I-95 from Beatty to Vegas. You see, while the merger – a creation of Heinz owners Berkshire Hathaway and 3G Capital – might be a Big Freakin’ Deal (“BFD”), it is a BFD taking place in the context of an embattled sector. Big Food, you see, is up against it from all directions – including the increasingly sophisticated offerings of retailers’ own brands, and the increasingly more attractive positioning of goods offered by smaller businesses, which come with less big money baggage. In the last five years, major food brands have lost $18 billion in sales to private label. When Berkshire and 3G bought Heinz, they immediately cut overheads, from jobs to meals out.

Comment: Tough times for big business, in a climate where large corporations are becoming the object of suspicion rather than of admiration.

Don’t get us wrong, but those of us who are men have something of a man crush on Unilever CEO Paul Polman, while those of us who are not men have the regular sort. In recent days, this paragon of capitalistic virtue has spoken out against the excesses of executive remuneration – including his own – and written some powerful and inspiring words about the need for businesses to address climate change. He’s joined a “B Team” of business leaders, including Richard Branson, who are calling for the bold, necessary but in some quarters unpalatable goal of Net Zero emissions by 2050. And as if that isn’t enough, he’s also the CEO of a business which has just launched the brightFuture Global Campaign, in which kids are given a voice (and in five cases, bursaries to the tune of R10 grand a pop) to express their ideas for a better future.

Comment: Unilever is leading a paradigm shift in the way the world does business. Dangerous but exciting times.

he HSBC Purchasing Manager’s Index (PMI), a reliable measure of how the private sector is doing, declined from 51.5 in April to 50.1 in May, where 50 means no growth whatsoever. Most businesses questioned argued that the Eskom debacle was the chief contributor, if that’s the word, to this sorry state of affairs, although to be fair, export demand declined at its fastest rate in 10 months despite a relatively weaker rand. On the upside, strong domestic demand did lift new orders, not that this helped much. Fitch has recently affirmed SA’s sovereign credit ratings, leaving them unchanged at BBB and maintained a negative outlook, as expected, although it has warned that weak economic growth, failure to reduce the budget deficit and stabilise government debt, and failure to narrow the current account deficit materially, were factors that could lead to a downgrade in future.

Comment: Final warning time.

With our own dear Woolworths setting up shop in Australia, we are duty bound to report that one Mr Price is hot on its heels, planning test stores for the latter part of this year in the no-doubt reasonable belief that your Australian is as fond of cut-price rags as the next bloke. And also, Australia is conveniently close to those South Asian nations where Mr P sources much of its merchandise.