THIS ISSUE: 06 Nov - 11 Nov
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Pick n Pay M People
M-commerce is still in its infancy in SA, according to Michael Cotterell, the man in charge of, erm, M-Commerce at Pick n Pay. Now, for our less “tech-savvy” readers, M-commerce is Mobile Commerce, which is a sort of shopping you can do using the telephone. Much like your dear old gran used to do when she called the butcher to order a dozen of his best chops and some brisket, really, but also different. The issue, according to Mr C. is that the infrastructure in our region is still insufficiently developed to deliver much more than basic services this way, like electricity and airtime, and for this reason phones are used more for advertising (or “leveraging marketing opportunities” as the experts say) than anything else. This notwithstanding, cellphone usage continues to explode here, with 57% of all internet traffic now screaming down the mobile superhighway.
Comment: One day, we might look back on the cellphone as we do the fax machine, as something once cool and indispensable for which we no longer have any practical use. One happy, happy day.
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Choppies Sharp.
“Go Choppies!” is the cry. And you’ll hear it these days from Gaborone to Nairobi, where the plucky young retailer is on the verge of acquiring Ukwala Supermarket, whose creditors it has urged to declare their outstanding debts in writing, for which monies Choppies has said it would not be liable in the event of a takeover. Having offered one billion Kenyan shillings for the business in its entirety, or $10million US, it presumably feels it has done its bit. And now, we are told, the Kenyan Competition Authorities are on-board too. Ukwala, you may recall, is Kenya’s fourth largest chain, behind Nakumatt, Uchumi, and Tuskys but ahead of Naivas. It has ten stores scattered between Kisumu, Nairobi and Nakuru, and these will go some way toward the fulfilment of Choppies’ ambition to have 200 stores by the end of next year.
Comment: With listings on not one, but two stock exchanges and what appears to be a handsome war chest, Choppies is, we imagine, within a decade of taking on SA’s finest.
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Shoprite To coin a phrase… oh, shut up!
One of the great benefits of Shoprite’s expansion into Africa has been the increased frequency of stories containing names like “Bimbo Akintola” and “Mrs Abesola Sunday” and the florid language of Nigerian journalists. This week, the story is about the “unholy habit” Shoprite tellers have of short-changing their customers, by small amounts, because of the shortage of coins in circulation, and the fact that no one actually wants these coins anyway. Most of the punters accept the status quo, some do not, like “star actress” Bimbo Akintola and her sister, who got themselves into an unseemly fracas just the other week with a teller over this issue. Unfortunately, efforts to extract comment for Shoprite staff were met with something called a “brickwall”.
Comment: OK, so we shouldn't perhaps have stopped the presses for this one. But it does shed light on some of the petty challenges and frustration of operating in some of the less legislated markets.
MANUFACTURERS AND SERVICE PROVIDERS
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Rhodes The Treasures of the Mysterious East
A little like the Choppies of the manufacturing sector, Rhodes Foods Group is acquiring smaller businesses hand over fist in their promising attempt to become a force with which to be reckoned. This week: Alibaba, Cape-based manufacturer of halaal goodies such as samoosas, pies and rotis, which sell very much like hot cakes to forecourt bakeries and independent traders. Once noted for its private label canned fruit, which it flogs to outfits like Waitrose and Tesco, and for its flagship Bull Brand corned beef, Rhodes has diversified its offering dramatically in recent days, notably with the move into value-added baked goods. These are relatively low volume and high margin, allowing Rhodes to sidestep the big boys like Pioneer and Tiger, who make more staple fare in higher volumes and at lower margins.
Comment: Rhodes has made six such deals since listing on the JSE last year. This business is going places, and fast.
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Deloitte Africa: Not for cissies, but accountants, now…
Our good friends Deloitte, who are so much more than just accountants these days – and we say this advisedly, because some of our best friends are accountants, and where would we be without them, eh – have just released their inaugural African Powers of Retailing report, and what a cracking read it is. There are some no-brainers – the top ten are all South African, pretty much in the order you’d expect from Shoprite on down, for example – and some eye openers. Foremost among these is that no matter how big you get in Africa, you are going to come head to head with the fact that 90% of all trade here is informal, although the further south you go the more formal it all gets. Another surprise is ecommerce, which is expected to top US$50 billion by 2018, a lot of that coming from Nigeria, which is something of an early adopter we are told.
Comment: The African Consumer, like the African Gold Seam and the African Tobacco Farm in earlier times, exercises a powerful fascination for people (and businesses) who have a bit of money and wish for a lot more, and it is this perhaps, which has tempted Deloitte to tip its well-shod toe into these balmy waters. Or something.
TRADE ENVIRONMENT
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Climate Bad moon rising
November has barely struck, and the retailers are warning of shortages in fruit and veg come December, as extreme heat in the northern production areas of the country hits. 95% of all fresh produce is locally sourced and all of the majors have said that they are working with suppliers to avert shortages on their own shelves. Last week we reported that an historic drought in KZN has shifted the balance of power in the sugar industry. This week, we are told that it has also affected maize production, which might fall as much as 30% this year and has already created a knock-on effect in breads and cereals. Meat and poultry, where grain is an input cost, will be next.
Comment: Climate change is a game changer, a fact with which South Africa’s ever-pragmatic businesses are actively working.
IN BRIEF
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IMPERIAL Logistics Faded splendour
IMPERIAL Holdings, owner of the eponymous logistics business and currently under the charge of the legendary Mark Lamberti, has mentioned that it expects single digit revenue growth and no operating profit growth for the year to June 2016, although steady progress has been made over the past four months towards operational and strategic goals. Knowing what we know of Don Marco, we still reckon it’s worth a flutter.
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Woolworths Sowing the seeds
Among Woolworths’ worthier projects is this one: the creation of school food gardens around the country via various organs of the business – MySchool MyPlanet MyVillage and Woolworths Financial Services in the case of the Chapel Street Primary School in Woodstock, and The Woolworths Trust, in partnership with Food and Trees for Africa (FTFA), in the case of the Impumelelo Primary School in Bohlokong. Whoever does it, whatever their involvement, it’s great work.
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