
THIS ISSUE: 03 Mar - 09 Mar
RETAILERS AND WHOLESALERS
-
Walmart Dreams of a blue planet
Mergers and acquisitions, eh? Think you’re getting one thing, turns out you’re getting something else. Wakro (as we waggishly called it back then) is now five years old, and it seems that Massmart has not thrown open the doors to the kingdom of Africa as Walmart had hoped. Part of the problem has been slow growth here at home, which has seen all of our retailers take a knock after the retail boom of 2007/8. Africa is also proving a challenge for all retailers, with initial growth off a low base tailing off as everyone gets ensnared in red tape and local resistance to foreign businesses. And the strong dollar hasn’t helped much either. These headwinds are not new to Walmart, which has just closed 60 stores in Brazil, has only 21 in India and is finding in China that the government is more supportive of local retailers than foreign devils.
Comment: Still, Massmart has embarked on a strategy of slow but steady growth on the continent, and if Walmart shareholders are prepared to go the distance they may yet be rewarded.
-
-
Woolworths We’re not sure what it cost them. But it wasn’t peanuts.
It being a slow news week, here’s something about peanuts, which evolution has seen fit to render deadly or at least uncomfortable to an inexplicable 1-2% of the human race. And which Woolies inadvertently included with insufficient labelling in 12 of its ice cream and sorbet products, which are now safely back on the shelves, labelled up and ready to offer some relief from the unseasonal late-summer heatwave. Woolies have not divulged how many nuts were actually lost through the recall. Two of the affected lines have been discontinued, while another two are temporarily out of stock.
Comment: One forgets sometimes that with its massive private-label offering Woolies is almost as much a supplier as it is a retailer, and must shoulder the burdens of consumer accountability that come with both.
MANUFACTURERS AND SERVICE PROVIDERS
-
Clover Make Africa safe for cissies
“It’s terrible there,” according to Clover CEO Johann Vorster, voicing something about Nigeria that every South African business knows but few have had the gumption to actually say. This as Clover shelves its plans to expand in Africa’s most promising basket case due to over-zealous import regulations and foreign exchange controls. Also because it proved difficult to buy milk there, to access currency and to procure packaging, all of which come in handy for a dairy business on foreign shores. Initially, Clover wondered if it hadn’t dragged its heels in failing to open a manufacturing facility at a time when the Nigerian government was offering currency incentives to businesses willing to dip a toe. Now, it wonders instead if it hasn’t dodged a bullet.
Comment: That whole “Africa is not for cissies” schtick is tired and counterproductive. Make Africa safe for business, and development will follow.
-
-
RCL FOODS Big dogs
RCL FOODS is diversifying the heck away from its traditional stomping ground, and no mistake. It’s already active in the pet food market, bringing such brands as Epol and Bobtail to the more pungently aroma’ed shelves in SA’s supermarkets. It’s also captured a fair slice of the posh pet food category, with Optimizor, Ultra Dog and Canine Cuisine all growing handsomely. But this, it appears, is not enough. Despite the downturn in economic growth, many South Africans continue to anthropomorphise their pets, regarding them as hairier, shorter members of the family, much like great aunt Vera, creating an ongoing opportunity for growth in the upmarket segment. Hence RCL’s decision to pump R100million into the construction of a premium pet food factory in Randfontein in the next 18 months, the better to mount an assault on the dominance of imported brands.
Comment: Who would have thought eh? Still, RCL seem to think it’s a good idea, and they’re not a business to invest like this lightly.
-
-
Nampak Glass act
Flying the flag for manufacturing, a sector which can benefit from a weaker rand, is Nampak, which sees its fortunes rise as the European market develops a thirst for attractively priced South African wines. These are also helped on their way northward by the Economic Partnership Agreement, which allows for more agricultural imports from SADC countries including 110 million duty-free litres of wine. As a result, the business expects to produce twice the number of bottles for clients like Nederburg and KWV this year, coming in at a massive 40,000 tons from its Germiston glass factory. Good news for a business which recorded an operational loss of R76m last year and incurred additional finance costs of R71m, as it battled to get its third furnace up and running – a situation it has since remedied.Comment: Nicely recovered there Nampak
TRADE ENVIRONMENT
-
Ratings Who will rate the raters?
Pouring oil on the troubled waters of everyone’s rating anxiety this week was our freshly-reminted Minister of Finance Pravin Gordhan. Not to worry, he said. Even if we do lose our investment-grade credit rating, well, what the hey? It took us a few years to earn it back after the arrival of democracy, we can do it again. Gordhan, as you know, has undertaken the Herculean (and hopefully not Sisyphean) task of harnessing business, labour and government to pull together for the sake of the dear old South African economy. Ratings agency, explains Gordhan, no longer just take fiscal stability and indebtedness into account, they also look at prospects for economic growth. With ours now projected at between just 0.3% and 2.64% (that’s quite a range there, guys) for this financial year, and no new initiatives in the budget to point at a solution, the prospects for a downgrade by Moody’s are all too real.Comment: South Africa has proved itself equal to the task of heeding a wakeup call – when that call is perilously close and deafeningly loud.
IN BRIEF
-
Kimberly-Clark Absorbing news
In North America, Kimberley-Clark report the unwelcome news that sales of adult diapers (or nappies, as we quaintly know them here), will soon outstrip sales of baby diapers. This as birth-rates decline, and all those cool baby boomers with their bellbottom jeans and protest songs turn their minds to the more prosaic concerns of age. This has led marketers to “make the product more normal, and even fun” reports a hopeful K-C. -
-
Product of the Year The numbers game
A veritable cornucopia of brands in this year’s Product of the Year awards, which are chosen following an intensive judging process based on months of rigorous research conducted by independent research house, Nielsen, in consultation with 5,000 South African households. Too many to enumerate here, so we will send you over there where our wordier friends at BizCommunity have listed them all.

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