
THIS ISSUE: 25 Jun - 01 Jul
-
Woolworths Who’s the boss?
A bit of confusion down under, where as you know our own dear Woolworths acquired a substantial chunk of poorly-named retailer David Jones, for its own good. Woolies has appointed one Pierre de Wet, ostensibly to overhaul David Jones’ flailing food business, adding cafés, restaurants and coffee shops to existing food halls and, according to DJ, reporting harmlessly through to its CEO Ian Nairn. Now it appears that Woolies has greater food ambitions in Aus, ambitions which may include standalone food stores, with de Wet reporting to Woolies’ CEO and part-time Audi-driving bodyguard Ian “The Transporter” Moir. These stores, like their counterparts in SA, would compete in the premium sector of the Aussie market, where Woolworths (a coincidentally-names Aussie retailer) has a trading brand called Thomas Dux, and where a premium grocer known as Jones the Grocer operates.
Comment: Bit of a shake-up there, then. Couldn't happen to a nicer continent.
-
-
SPAR Pot o’ Gold
The good news is that BWG’s €23million purchase of the Londis franchise has been given the cheery Irish nod by the Competition Authorities over on the Emerald Isle, giving BWG ownership of ±50% of the convenience market there. The bad news, because there’s always a bit of that, is that our very own Verdant One has had to provide a €220million (about R3biljoen) guarantee for the purchase of BWG to the Bank of Ireland, instead of the €130 million they thought they were in for at the time of the purchase. And reasonably so: the latter sum was the term debt owed by BWG at the time. It appears however that since an earlier management buyout, BWG’s performance has been fairly flat, at a time when discounters like Aldi and Dunnes were upping the competitive heat in Ireland. SPAR remains sanguine about its prospects with BWG, however, and shareholders seem to agree, with the share holding its value on the news.
Comment: SPAR’s venture into a reviving Irish market is not without its risks, to be sure. But somehow, we share their confidence on this one.
-
-
Massmart Would you like to supersize that?
Couple things on the Massmart front: First up, you’ll recall that the Men in Black have come up with a harebrained scheme for Makro’s online punters to pick up the deliveries from specially-appointed lockers in (on? at?) Sasol forecourts. And now – yayyy! – you can also get your goodies from lockers at select McDonald’s, too, McDonald’s being a fast-food chain with convenient locations nationwide. And we’re able to shed a bit more light on last week’s Massmart news – of perhaps greater significance – where they are partnering with the Gauteng government to breathe new life into township businesses. Beginning with pilots in Katlehong, Atteridgeville and Sharpeville, small township retailers will be buying 60% of their stock from Massmart and the rest from suppliers of their choice, allowing them access to the Group’s massive buying power.Comment: We look forward to seeing how this one spins out – and what the response will be from the competition.
MANUFACTURERS AND SERVICE PROVIDERS
-
Windhoek Vorsprung durch bier
As enthusiasts will be able to tell you, Windhoek beer is brewed according to the Reinheitsgebot, a centuries-old set of laws governing the purity of the amber liquid, and dictating that only three ingredients be used: barley, hops and water. This, instead of being a hindrance as you might suppose, and narrowly Teutonic in its conception, has become what we in the industry know as a Unique Selling Proposition, or USP. And this is why Windhoek has launched a campaign promoting the purity of its own product and incidentally highlighting some of the actual ingredients (extract of fish swim bladder, Propylene glycol, that sort of thing) used by the competition.
Comment: As you may have gathered from this story, it’s a slow news week in the manufacturing sector.
-
-
Private Label Privates on parade
The global march of private label in its perfectly uniform unbranded ranks continues unimpeded although not unresisted by branded merchandise. This according to no less an authority than Deloitte, who tell us that 73% of CPG businesses in the US have reported an overall decline in their brands’ “must-have” status. However, in all fairness, and somewhat confusingly, the one-time accounting practice have also found that with the economic recovery, private label has lost its lustre somewhat, as shoppers rediscover the willingness to pay a premium for such qualities as health and convenience. All of this and more in Deloitte’s delightfully-named Annual Pantry survey.
Comment: More of which you can have a squizz at over here: http://www2.deloitte.com/us/en/pages/consumer-business/articles/2015-american-pantry-study.html?id=us:2el:3du:aps2015:eng:cp:062315
TRADE ENVIRONMENT
-
Retail Sales Volumes Turn up the volumes
According to the twitchy comb-overs at BER, retail sales volumes, and this is important, are either flat or have edged slightly downward YOY from the first to the second quarter of this increasing horribilis annus we call 2015. This despite the expectations of most retailers that volumes would improve in the second quarter. In part, this must be attributed to a decline in consumer confidence, and a corresponding decline in the willingness of households to seek and utilise credit – both of which are measured by the above-mentioned twitchers. Given the likelihood that the Reserve Bank will resume its rate-hiking ways in the next six months, that Eskom will continue to deprive us of the power for which we pay and that nobody has yet come up with a solution to the systemic unemployment of our youth, volumes are unlikely to grow much over 2% for the rest of the year either.Comment: Don’t shoot the messenger. We’re as unhappy as you are.
IN BRIEF
-
Pick n Pay Congrats!
Chairman Ackerman the Younger has ascended to the pinnacle of the profession with his election as co-chair of the Consumer Goods Forum (CGF), the global representative body for this great industry we call home, bringing together 400 businesses in 70 countries. -
-
Uchumi Let them eat credit notes
Big shakeup at Kenyan outfit Uchumi, whose suppliers are in revolt, and whose non-delivery for non-payment has resulted in the ouster, if that's a word, of its CEO, CFO and HR Manager. Uchumi is borrowing furiously and selling off non-core assets to settle its outstanding debts to suppliers, which amount to something north of US$10million.

Subscribe to the Trade Tatler to get an up-to-date overview of what is happening in the SA and international FMCG industry
Tatler Archive
- 2023
- 2022
- 2021
- 2020
- 2019
- 2018
- 2017
- 2016
- 2015
- 2014
- 2013
- 2012
- 2011
- 2010
- 2009