
THIS ISSUE: 28 Jul - 04 Aug
RETAILERS AND WHOLESALERS
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Massmart The 100-Year War
The Competition Commission is deliberating with glacial pace upon the question of exclusivity clauses in mall leases. At issue is whether SPAR, Shoprite and Pick n Pay are ganging up on Massmart and preventing the Men in Black from competing equally in certain markets – which is to say, markets enclosed by the labyrinthine walls of malls where the others have exclusivity clauses with the landlords – but the Commission is not even deciding on that issue yet. Instead, they’re deciding whether the other three are justified in their submission that the Commission should not even decide the question in the first place. The stakes are high for Massmart – with its food offering at Game, it is seeking for the first time to get into traditional, mall-bound grocery retail.
Comment: Bit of a no brainer, to be honest. Exclusivity, we would have thought, was by definition anti-competitive.
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Dis-Chem Not the beginning of the end, but perhaps the end of the beginning
Here’s the one we’ve all been waiting for: Dis-Chem, are reportedly been prepped for a listing on the JSE, which has encouraged major investor RECM and Calibre (RAC), to disclose the value of its holding in Dis-Chem at the AGM. R127million, apparently, for a 2.5% stake, which, RAC avers, is about half the value of similar businesses listed on the JSE. Not a bad little earner for RAC, which bought its share of Dis-Chem in 2013 for a paltry R30.5million through its arms-length investment vehicle Fledge. Perhaps they thought they were buying some other kinds of drugs, who knows. Among its other investments are mining, diamonds and poultry, in which embattled sector it owns a chunk of Country Bird acquisition target Sovereign.
Comment: Still, a listing eh? Stay tuned.
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Trinkets Toy Story
How are those giveaway campaigns going? Too early to tell, apparently – to get a view on any bump Checkers might receive from its Little Shop campaign we’ll have to wait for the release of its interims in February next year. What we are able to tell you knew already – is that Little Shop groceries are becoming as scarce as actual groceries in Zimbabwe, with any number running out by midweek last week. Over at Pick n Pay, same story. Their Super Animals cards, which were happily although probably not timed to coincide with the release of Pokémon Go, are riding the wave of augmented reality all the way to the bank, reaching the number of app downloads it had targeted for two months, in just two weeks.
Comment: Can we be honest here? We’d rather, at this point, be telling you about the opening of a new DC, the launch of a new format, or the appointment of a new Financial Director.
MANUFACTURERS AND SERVICE PROVIDERS
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SABMiller Gassy
SABMiller is going great guns in Nigeria, where a combination of low, low prices and a thirsty populace saw sales jump 36% and volumes rise 25% for the quarter ended in June. Nigeria is one of the Big One’s newest markets, and now has the distinction of being the fastest-growing one too, anywhere in the world. A recession in that huge but crazy country has put the pressure on rivals Guinness and Heineken, so SABMiller has focused forts on the lower end of the market, and there they appear to have been rewarded, as posher punters trade down in order still to afford their daily pint. Nigerians consume 1.5billion liters of beer every year, compared with just 101million of spirits. In other SABMiller news, the board has apparently given in to AB InBevs’ revised $104billion offer, clearing the way for absolute market dominance.
Comment: And a shot in the arm, one hopes, for craft brewers everywhere.
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British American Tobacco Puff the Multinational
Despite the best efforts of governments globally to prevent their citizens from dying horribly of lung cancer and emphysema, British American Tobacco (BAT) posted a 4.2% rise in group revenue, selling 332billion cigarettes globally for the first six months of its FY. This, for example, despite a 40% tariff hike in Malaysia, where wiry riksha pullers clutch cigarettes in tobacco stained fingers, and plain packaging laws in Aus, where weather-beaten men lean on fence posts and enjoy a quiet one while gazing into the heat. BAT is now investing heavily in vapour technology through its Vype brand, which sounds like one of the teachers from Slytherin or something, but otherwise shows no particular interest in exiting the tobacco market.
Comment: Well, why would they?
TRADE ENVIRONMENT
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Energy Power Players
Three of the Big Five have agreed with Greenpeace to lobby the government for a framework that will allow for the efficient and cost-effective rollout of renewable energy infrastructure in the Beloved Country. Massmart, Pick n Pay and Woolies have committed to increasing their presence in the regulatory realm and to request access to the legislation that is currently, and bizarrely, aimed at blocking the ease of clean energy uptake. These include the Integrated Resource Plan update, and the finalisation of the regulations governing small-scale embedded generation. The idea with an industry lobby is to take a sector approach to issues like financial mechanisms and regulatory frameworks.
Comment: Something CGCSA might perhaps take the lead in coordinating. And in which all retailers should participate.
IN BRIEF
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Dangote The Son also rises
In a final slap in the face, Dangote Flour Mills has changed its name from Tiger Branded Consumer Goods Plc (TBCG) back to Dangote Flour Mills. Dangote is a word in the local Hausa language, perhaps meaning “Son of Porridge”. We think that was it, we may have misheard. Son of a something, anyway.
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The Economy Oh, Yay.
The good news is that we avoid a technical recession this year, keeping our GDP growth at 1%. The bad news, well, same difference, really, with 500,000 jobs lost in the first six months of the year and low GDP now actually beginning to have an effect on food security. On the upside, the Reserve Bank may not hike rates this year, because, see GDP above. Time to sack the CEO, surely.

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