
THIS ISSUE: 30 Sep - 05 Oct
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Shoprite Or he could simply move to George
Oom Christo Wiese has let drop the bombshell – if by bombshell you mean a large heavy object wrapped up in a mattress and several duvets, from a not particularly dizzy height – that Steinhoff, owned substantially by Oom C., might be open to the idea of acquiring Shoprite, owned, not insubstantially, by a Mr. C. Wiese. So we’re not talking a “Tesco buys Pick n Pay” scale bombshell, more a rejigging of the administrative structure of certain large assets. What we are talking about, however, is, potentially, a R400billion consolidated retail business with furniture, food and groceries under one roof, one that is now represented on five of the six possible continents. Wiese describes the putative move as a “natural development”, as, aged 75, he contemplates retirement.
Comment: But don’t get too excited. Oom C. has a lot of irons still in the fire, including the opening of 500 New Look stores in China – New Look being a UK fashion retailer owned by Brait, owned – again, substantially – by the man himself.
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Clicks Click click, vroom vroom
In a shrewd move which neatly answers some of the pressing challenges to online shopping in SA – theft, for example, a flailing postal service, and a shortage of delivery vehicles – Clicks is soon to launch a Click-and-Collect service in partnership with Pargo, which already operates parcel pick-up points at Freshstops, Waltonses and 7-Elevens nationwide. The way it works is like so: buy anything you like (within reason) off a site of your choice – Spree, bidorbuy and OneDayOnly, to name but three – then nip down to a Clicks of your choice, out of a possible 500 odd, sign the chit, and Bob’s your auntie. You’re now the proud owner of one of them gadgets which shrink unwanted cellulite using soundwaves, or something. What’s in it for Clicks? Footfall obviously, and one assumes a little cut of the take.
Comment: Win, win, win, innit?
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Pick n Pay Self-centred
Self-checkout (which in our experience is a joyless and glitchy endeavour) may well be the way of the future. But not here, not now, say SACCAWU, whose Pick n Pay membership opposes the move. Self-checkout is being trialled at one store in Obs, and will be for the next six months before any decision is taken. The idea for Pick n Pay is to improve the customer experience and get punters moving more rapidly towards the exit. Staff will be required to assist at self-checkout tills, and to provide the additional security which may, ahem, be needed, say PnP, and the business remains committed to adding 5,000 jobs to the dear old SA economy every year.
Comment: Honestly – and we know whereof we speak – self-checkout adds little to the shopper experience. And while it certainly does cut staff overheads, this is perhaps not a solution South Africa needs right now.
MANUFACTURERS AND SERVICE PROVIDERS
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RCL FOODS Hensop?
Everyone calm down, OK? RCL FOODS is Not. Getting. Out. Of. Chicken. But with the once-iconic poultry division running at a loss for five straight years in the face of cheap imports and hard economic times, they are considering restructuring the commodity chicken component of the business. For restructuring, in this case, read downscaling, although they will continue to chase growth in the added value and food service categories. 27,500 tonnes of chicken are now being imported every month, a 43% increase from 2015 – a number that has proved too overwhelming for the various corrective measures employed by RCL in recent months.
Comment: At this point, RCL’s move into foods other than chicken is looking like one of the best decisions in a long line of them under this management.
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Nestlé I gut a feeling
Dairy giant Nestlé will have a brand spanking new CEO in Ulf Mark Schneider, the first in almost a century not to have risen through the ranks, having come over from healthcare outfit Fresenius. This is significant: Nestlé, it turns out, is boldly heading for the misty frontier between food and medicine. This was evinced, if that’s a word, at a recent seminar in Mexico where everyone got excited about the subject of the intestinal microbiome, that happy hunting ground of trillions of bacteria in your gut, where they pull the levers, apparently, on everything from obesity to depression. Nestlé is apparently intent on future-proofing its business as the market for traditional packaged foods slows, by bringing to the consumer food products fortified to provide health benefits.
Comment: An interesting new leg on the Nestlé journey – although the science is still out on the relatively new field of microwhatsit.
TRADE ENVIRONMENT
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SMMEs A thought for the little guy
In this difficult ambit, spare a thought for the small, medium and micro enterprises which ply the more adventurous reaches of the economy. You see, where large businesses grew their net profits 38% in the year to June 2016, medium businesses grew them only 11%, and those of small businesses declined 35% in the same period from R64,0bn to R41,4bn. This according to StatsSA’s Quarterly Financial Statistics. According to Business Partners Limited, this points to the vulnerability of small businesses to sustained periods of low economic growth and increasing costs, compared with larger businesses which have the financial resources to sustain their operations. SMMEs are particularly at the mercy of costs over which they have little control – like rising wages and rentals, and in such an environment struggle to reduce prices to attract new customers.
Comment: SMMEs are the bedrock of the economy. Best we find a way to help them thrive.
IN BRIEF
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Woolworths Touch of class
The Dapper One has announced the appointment of a new CEO for its Country Road division down in the blasted Antipodes, the classily-monikered Scott Fyfe, who comes courtesy of 20 years before the mast at Marks and Sparks. Good luck, that man.
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Phendula We’ll be Mother, shall we?
Ten years ago, or thereabouts, a bright-eyed and idealistic young retail journalist sat down and began to type. “Joekels Tea,” he began. The words did not flow at first, but they gathered pace and multiplied over the years like the frosted strands in his hair, and here we are. Today, The Tatler is 10, and Joekels Tea is 22, and the third largest tea manufacturer in SA, and somewhere in there is a lesson for all of us.
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