
THIS ISSUE: 07 Jul - 13 Jul
RETAILERS AND WHOLESALERS
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Retailers It’s the little things that matter
It’s no secret that in the race for the hearts, minds and of course rands of the South African Consumer, South Africa’s major retailers, are battling to differentiate themselves from each other on any of the usual P’s – product, price, place and so forth. Enter a 6th, 7th or 8th P, depending on whose list of P’s you consult: Playthings. Hot on the launch of Checkers Little Shop collection, which sees children and adults alike instagramming themselves in Brobdingnagian contrast with the miniature groceries, Pick n Pay have announced the launch of Super Animals, a range of cards which have an augmented reality function when paired with smart devices, and SPAR are running their Angry Birds collection of 3D cards, all available with purchases over R150. Such campaigns, according to experts, are a big investment, intensively strategized and often brought in from overseas markets where they have been thoroughly tested.
Comment: Now, with the addition of social media, they repay this investment not just in nagging kids and footfall, but in rich, delicious data.
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Corner Bakery Get them while they’re hot
The quaintly named Corner Bakery is already South Africa’s largest bakery franchise, with 420 stores dotted comfortably around the Republic, in forecourt stores. Now it’s expanding further, with the assistance of Massmart’s Game format, which has opened the brand’s first concession outlet, a “store within a store” at Gateway Theatre of Shopping in KZN. This move away from forecourts gives Corner Bakery a bigger reach, and provides Game with an enticing addition to its food offering, and a shot in the arm for the overall store experience. Parent company Retsol plans to open Corner Bakery concessions in all local Game stores, as well as a couple in Zambia and Namibia, and to take its total of corporate standalone stores up to 25 from 12 by the end of the year.
Comment: Chains like Corner Bakery give lie to the belief (see above) that corporate retail in South Africa is a crawling mass of juggernauts, like the M1 at 5.30 on a Friday. There are some pretty zippy numbers in between. Although in this case, one of them is slip streaming one of the juggernauts, to take the metaphor probably a little further than it should be.
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Pick n Pay Life’s a Fitch
Notorious rating agency Fitch, which has been known to write off entire countries with a savage few strokes of a gold-trimmed Montblanc Meisterstuck has been surprisingly – that’s the wring word – lenient with one Pick n Pay, which, it believes, will continue to grow its business to the tune of 7% per annum and better, and which it has awarded another A. In its report (thinks: “Pick n Pay, Pick n Pay, which one is he. Ah yes, sits on the middle, second row from the left, fond of cricket. Or is that Clicks?”) Fitch says things like "Pick n Pay continues to sacrifice gross margin improvement in order to restrain selling price inflation” and “to enable this, the group continues to extract operational efficiencies and cost savings through its increasingly centralised logistics and distribution platform.” Which any one of our regular readers could have told you for free.
Comment: Vapid and Vacuous stuff, but nice for Pick n Pay.
MANUFACTURERS AND SERVICE PROVIDERS
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ACDOCOSA OMGLOL
What is that? Another union? With a name like ACDOCOSA, they’re probably toyi-toying on the boardroom table as we speak. What? Oh, thank God! ACDOCOSA is in fact a specialist brand-custodian distributor which handles brands like Nair, Pearl Drops and Contempo condoms for its customers and which has just been taken on as exclusive Southern African distributor by Dr. Wolff, a German research-based consumer health company, for its Alpecin and Plantur haircare products. ACDOCOSA (the SA stands for “South Africa”) was recommended to Dr. Wolff by parent business ACDOCO in the UK, where it gets brands into chains like Tesco, Boots and ASDA.
Comment: The Germans invented that short back and side’s haircut everyone’s so fond of these days, you know.
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Coca-Cola World Glass
A cautionary tale from north of our borders, where Mozambique has just been downgraded to junk by the global ratings agencies, where Frelimo and Renamo are up to their old tricks despite being actual political parties these days, and where dicey oil and gas markets have taken a further toll on the economy. All of this has prompted Coca-Cola, a maker of carbonated beverages, to hold up the installation of a third bottling line at its otherwise world class facility. This despite the fact that lines one and two are going great guns and that Coca-Cola Sabco have previously run out of bottling capacity in that thirsty land. The downgrade, by the way, was partially as a result of the government hiding guarantees of loans to the tune of $1.4bn to state-owned enterprises.
Comment: Mounting political tension, slowing GDP and under the counter dealings between business and government? That sort of thing could never happen here.
TRADE ENVIRONMENT
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Clem Repent! Repent! For ye know not the day or the hour!
Well-remunerated prognosticator and usual glass-half-full guy Clem Sunter has gone a little old testament on us this week, reporting – and here we quote freely – that “South Africa has dropped from the 30s to the 50s in the World Competitiveness Report and has slipped to the third largest economy in Africa. There is no doubt,” he thunders “that South Africa has descended. It can rally and move to the ‘premier league’ or drop into the ‘second division’, where there is no interest in investing in the country.” Now’s the time, he suggests, to diversify the old portfolio and take advantage of relaxed exchange control regulations to move some moola offshore.
Comment: You could speak to our man in Nassau if you like.
IN BRIEF
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Tiger Brands Dear Friend…
OK, a little unfair that we (like so many of our colleagues in the press) slapped a Tiger Brands at the top of the story when all we’re really reporting is that Tiger Brand’s ex-CEO has been snapped up by Barclays to head up their business in Africa. We hear there’s a Nigerian Prince who would like to speak to him about the opportunity of a lifetime…

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