
THIS ISSUE: 11 Jun - 17 Jun
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Pick n Pay Game, set and match
Pick n Pay is upping the ante in its efforts to win an ever-greater share of the ever-shrinking consumer wallet. You may recall the launch, ten months ago, of The Big Blue’s Brand Match programme, which goes a little something like this: when a shopper buys ten or more products, and where one or more of those products are brand match items, a search is triggered at the till for prices at competing retailers on those items. If the total on the brand match items comes on at higher than it would have been elsewhere, the shopper in question receives a cash-back coupon on their next shop. Now PnP are doubling the number of their Brand Match items, for a total of 2,000, or well over 50% of branded grocery sales, saving Mrs Punter time on price comparison, saving her money where applicable, and driving repeat visits to Pick n Pay stores.
Comment: Canny stuff, and a handy supplement to the popular Smart Shopper programme.
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SPAR Clever.ex
The sharp suited analysts over at snappily-named research business Intellidex, are liking SPAR’s chances post the acquisition of jolly Irish retail group BWG. But, they caution, with growth in SA slowing, the rest of Africa is going to be critical in the verdant retailer’s future progress. You will recall that the acquisition of BWG boosted interim sales to the tune of 21%, and interim profit by 10%. Down the line, with the Celtic Tiger if not exactly roaring but looking well-rested none the less, and GDP in the Emerald Isle expected to come in at 4% this year, prospects there look fairly buoyant. Back home, competition for a declining consumer rand is fierce, although Intellidex believe that SPAR could grow its margin nicely by leveraging economies of scale. And Africa? SPAR has built a healthy springboard in what used to be called the frontline states, hopes to open in Zambia soonish and has plans for heading even further north in the near future.
Comment: (Nods sagely). Economies of scale, eh? Good things to, er, leverage, those. Lots of potential upside. Or even upside potential, as we in the industry say.
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Massmart Biggie smalls
As a condition of the Walmart takeover back in the heady days of 2010, an eager Massmart agreed to make available a fund of R100million for the development of the smaller supplier. Straight off the bat, Massmart put a fair whack of this into developing and then buying stuff from smaller farmers. Now, five years down the line, they’re shifting their focus a touch, away from agriculture and into manufacturing. This very FY, in fact, they will be bring no fewer than eight (8) suppliers on board, in keeping with the government’s requirement that no less than 30% of the value chain comprise SMEs. Currently, Massmart works with 139 farmers and 24 manufacturers in all provinces except the Northern Cape. Now they are changing their approach from capacity building over a wide base to supporting the already successful businesses which stock their shelves.
Comment: Enlightened pragmatism, as we’re almost sure our old history teacher might have called it.
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Poultry Why did the chicken cross the Atlantic?
Why, to save the African Growth Opportunities Act, of course! With the renewal of the trade deal, the US will be allowed to sell us 65,000 tonnes of chicken per annum. As you will recall, South Africa was adamant that our membership of AGOA come with no strings attached. The salvation of AGOA, argued the Ministry of Trade and Industry, will save jobs in other sectors: for example, SA exported around 30,000 pallets of oranges to the US in 2012 and 31,942,245 litres of wine in 2013. And let’s not even get into other sectors, oh alright, let’s: total vehicle exports of R17.1 billion went to the US last year, escaping tariffs of anything between 2.5 and 25% under AGOA. According to a spokesman at the US Embassy, there is ample room in the SA poultry market for competition: chicken prices went up 13% in the last two years apparently.
Comment: In line with food inflation then. Doesn’t sound like much wiggle room to us, or no doubt to our own poultry producers.
MANUFACTURERS AND SERVICE PROVIDERS
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Sea Harvest Quite a catch
Sea Harvest, already a leader in the empowerment of all stakeholders, not just the ones with long pockets, is making a further 4.3million shares available for its employees. The shares will vest in 2022, benefitting up to 5,000 direct or non-direct employees. Sea Harvest, which is one of SA’s biggest fishing businesses, benefits substantially from government-awarded licences, which guarantees the employment of over 2,400 people in the Western Cape. The company is majority-owned by Brimstone Investment Corporation and Kagiso Tiso Holdings, both of them. Brimstone also owns a 16.8% interest in Oceana Group, which is in the process of expansion with the acquisition for $382 million of Daybrook Fisheries in the US.
Comment: Big things happening for SA’s once-embattled fishing sector. Now let’s all try to ensure that they still have something to catch…
TRADE ENVIRONMENT
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GMOs Frankenmielies
It has, you may be aware, been recently if unsurprisingly demonstrated that the toxins produced by genetically-modified plants can have a negative effect on human cells. And even more recently, it has been shown by lab tests that the percentage of genetically modified organisms (GMOs) in South African mealie meal has increased to an average level of 80% across the board. Not to single anyone out, but looking at the majors: Premier’s Iwisa Maize Meal contains 91% GM maize, a 10% increase from 2013, Tiger Brand’s Ace Maize Meal contains 87%, up by 9% from 2013; Foodcorp’s Tafelberg Maize Meal contains 88% GM, up by 27% from 2014; Pioneer’s White Star Maize Meal has 55% GM, down by 17% from 2013 but up by 7% from 2014. On the upside, there have been substantial reductions on the levels of GMOs found in babyfoods and cereals.
Comment: Which just shows what can be done with a bit of consumer pressure and a lot of commitment.
IN BRIEF
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Clicks Geeks’ Corner
After identifying the need for a new IT Service Management (ITSM) tool to assist in better managing IT processes and services, the Clicks Group has turned to service provider Quintica and the BMC RemedyForce solution to help meet its goals. If IT is you game, you’ll know exactly what we’re on about here.

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