Slow news week so let’s talk the design of Woolies’ new Australasian head office in a town called Melbourne, Australia, where as you know, the Dapper One has been doing good things with ineptly-named local retailer Peter Johnson. Um, Barry Meldrum? Michael Higgins? David Jones, maybe. Something like that. Where were we? Ah yes: With the redevelopment of David Jones’ apparently ‘iconic’ building in Sydney into a David Jones flagship, Woolies is consolidating all of its head office space – Jones, Country Road – into one location in downtown Melbourne, conveniently close to the distribution facility in Truganina. Better yet, the new “centre of retail excellence” as Mr Moir puts it, will achieve both synergies and productivity benefits worth $10million per annum from 2019 onwards and, best of all, will be the nerve centre for Woolies’ ambitious expansion plans into Australasia. 

Comment: The expansion of Woolies on the Lost Continent and beyond is one of the most thrilling stories in retail globally right now.

How are those Pick n Pay Next Generation stores being received, you ask idly? For an answer, let’s head on over to the once-bucolic suburb of Hillcrest in eThekwini, where the venerable store in Christian’s Village has been given the full treatment. There, today’s modern shopper will encounter a brighter store with bolder colours, clearer signage, more space, dedicated destination areas, ‘hero’ departments where product is king, and a bigger focus on fresh. Says Pick n Pay Group marketing executive Adrian Naude, “Shoppers love the convenience of the new layout, the easy navigation, the innovation in products and the look and feel of the stores as a whole.” But back to the new fresh hall, which is the signature feature of the Next Generation stores. This area offers a greater selection than ever before, with in-store technology that enables faster replenishment, ensuring that punters will always get the freshest possible stuff, whatever time of day they choose to shop.

Comment: Nice one, The Big Blue, as it continues its inexorable return to relevance and innovation.

Boldly going where few South African specialists in grains and cereal have gone, would, this week, be Pioneer Foods, with the acquisition of UK outfit Steamfoods, for £7.5million, or a depressing number of rands. Steamfoods makes something called fruit shapes; also fruit flakes, yogurt fruit flakes, yogurt raisins, and school bars, which in our day were illegal. What? Ah yes. Not that sort of bar. It sells all of this through the usual supermarkets in the UK, but also through an online retailer by the name of Ocado. This is not as big a deal as might be imagined: “It’s just another dried-fruit business, basically, which is branded to grow operations in the UK,” says Standard Bank analyst Sumil Seeraj, on tones which may be described as blasé.

Comment: Still, with Pioneer’s expertise in the category, and their newly-upgraded manufacturing capacity, the acquisition increases the business’ exposure in an attractive market, at a time when things are not that rosy back home for anyone.

The AB InBev / SABMiller transaction is going to be a very big deal… for rival Distell that is! Eh? Bet you didn’t see that coming! This according to the Competition Tribunal, whose chair (or ‘Caesar’) Norman Manoim points out, that since SABMiller will be forced to sell its 27% stake in Distell, and to add insult to injury will be forced to stock Distell ciders in its fridges, and to heap indignity on top of that will be required to provide guarantees which will secure certain “critical inputs” – mainly apple concentrate – for Distell and other competitors, Distell is going to come up smelling of roses. Particularly, perhaps, in the cider market, where the two already compete and where Distell’s hand will now be lent some strength. Also, Distell might become an attractive partner for another beer business looking to enter the SA market on the back of an established distribution network.

Comment: Our position on mindlessly large mergers is fairly clear, we should imagine. But this one just might have some nice competitive spinoffs.

Zambeef Products (a Zambian business which produces, inter alia, beef) is to restore to full Zambian ownership its chicken hatchery and broiler divisions with the buyback of shares from South African JV partner RCL FOODS. This in order to mitigate the business’ exposure to exchange rate fluctuations, which we hope is not a poor reflection on the weakness of the rand, but cannot at this stage be sure. It will also, somehow, enable Zambeef to focus on its core business of cold chain food processing and retailing. The deal was made possible by a $65million investment from the Commonwealth Development Corporation, a transaction which has also enabled Zambeef to reduce debt and make some necessary capital investments.

Comment: Prudent move then, and we hope also satisfactory for our friends over at RCL.

Look, these are not the sorts of people you find manning the burning tyres on the N2 at rush hour. But 61% of SA’s business leaders have expressed in no uncertain terms their dissatisfaction with poor service delivery, which, in a recent Grant Thornton survey, they said was stifling the expansion of the companies they run. Among the issues they highlighted as having a deleterious effect on this business were higher electricity and water tariffs, e-tolls, rising rates and taxes, electricity supply disruptions, strikes by government workers, and the cost of needless bureaucracy. All of this has caused most of the CEOs interviewed to shelve the expansion plans they might have had, and half of them to postpone their investment decisions.   

Comment: Which seems to draw a direct line between the day-to-day management of the country and the level of economic growth we are able to achieve.

Huge congrats to SpecSavers, which came in a magnificent 28^th in the annual Iconic Brands survey, narrowly pipped into that position by no fewer than 27 brands from this great industry we call home, from the Sunlight bar all the way down to Elastoplast. Yay FMCG, the Michael Phelps of stuff people buy with their money.

In more deeply mysterious Sovereign-related news, activist shareholders have questioned the directors about the identity of their partner in a lucrative new factory-shop joint venture, but no reply was forthcoming at the AGM and none has since. The JV, which cost Sovereign precisely nothing but which has delivered margins of 8%, is apparently something they’re doing with one of their retail customers; they won’t say who.