
THIS ISSUE: 13 Oct - 19 Oct
RETAILERS AND WHOLESALERS
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Pick n Pay Well, I never!
It’s been three years since Richard Brasher took over the wheel at Pick n Pay from a storm-lashed Nick Badminton. How’s he doing? Well, to belabour the metaphor, Capn’ B is steering the ship into calmer waters. Market share – about 10% of which was lost between 2005 and 2013 – has stabilised at least, central distribution is entrenched in a business which once resisted the notion fiercely, and the share price – once the cause of ire for punters and analysts alike – has rebounded rather nicely. How did he do it? An outsider’s perspective, for one. A couple of decades in the rough and tumble of the UK grocery market, which makes our more consolidated space look like the Methodist Ladies’ Companionship Circle (MLCC). Then his forensic approach to the business’ issues, and the methodical manner in which he set about correcting these. Concerns do however remain that the heavy-handed approach Pick n Pay has adopted in dealing with suppliers - at a time where a more collaborative approach is regarded as the means to truly win in the medium to long term - will alienate suppliers in favour of the group’s competitors. Much of this courtesy from a very informative interview with a gentleman who had Mr B’s back right from the get go.
Comment: But don’t take it from us. See for yourselves.
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Massmart Hats off to the Men in Black!
In a classy event that we had the pleasure of attending, Massmart recently awarded Distell top honours at their third annual Supplier Environmental Awards. “Our aim is for our customers to walk into our stores and trust that we have carefully considered the products on our shelves, ensuring these goods are produced sustainably from responsibly-sourced inputs,” explains Group Sustainability Manager Alex Haw. “But we cannot do this alone, we need to work closely with our suppliers to ensure that the products we sell are designed and manufactured in an environmentally-thoughtful manner.” Distell has installed a new wastewater treatment plant in Stellenbosch which will also generate biogas, improved their glass bottle return and reuse programme, and commenced construction of a 2MW solar PV plant, which will be among the largest private installations in South Africa.
Comment: Excellent work there Distell, and of course Massmart, a business big both on sustainability and supplier development.
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Shoprite Hot property!
Shoprite’s new mall in Delft in the Western Cape is not universally popular with the locals, it turns out. In an open letter to Whitey Basson, Cape Town Mayor Patricia de Lille and city manager Achmat Ebrahim have called for the suspension of the development until Shoprite engage more meaningfully with the community. Of particular concern are the 300-odd spaza shops in the area which would doubtless suffer. The letter was prompted by complaints from the Delft Development Forum (DDF) and the Black Business Chamber (BBC) that The Big Red One refused to engage with them directly and ignored their proposals on how Shoprite and the community could work more closely to benefit all parties. Other public officials aver that various engagements took place, including a Q&A in June attended by 200 community members. Two community liaison officers have also been appointed by an ad hoc community representative committee.
Comment: Tricky terrain. But, we are operating at a time where the sustainability of communities is paramount, and the organisation that takes the lead, promoting a symbiotic relationship between corporate and independent business, will be the one which is truly regarded as investing in the long term sustainability of the South African economy and its people. When small businesses hurt, so do communities – and so do the businesses which serve them.
MANUFACTURERS AND SERVICE PROVIDERS
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Coca-Cola Good golly, Miss Molly!
Within hours of the announcement of the SABMiller / AB InBev merger (hereinafter “The BFD”), The Coca-Cola Company (TCCC) announced that it would be exercising a change of control option in respect of its Africa bottling operation, which enable it to take back the 57% part of its business owned by SABMiller. This leaves SABMiller without a toe in non-alcoholic beverages for the first time in 40 years. It also leaves TCCC free to deal with whomever it wants – and word on the street is that, in a twist you surely weren’t expecting, one such suitor – an unwelcome one – might be AB InBev, which has strong ties with rival PepsiCo. For AB InBev, the prize would be a non-alcoholic foothold in Africa, on a more substantial scale than Pepsi. But it’s not just TCCC who might find the thought unpalatable – the Competition Commission will surely not relish the thought of bottlers of sweet brown liquids getting together on their turf.
TRADE ENVIRONMENT
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Retail Trends Lordy be!
A timely reminder of some of the leading retail trends, and the consumer behaviours driving them, as brought to you by none other than our own Managing Director, Maryla Masojada. Value is a big one: in this economic climate consumers want it and are willing to trade down to get it. However, they still want to live better, and are looking to retailers to help them do so. One way is by saving them time: time is a luxury for consumers so they want convenience in a retailer. Another way is to keep them healthy: getting sick is expensive so wellness and health are becoming more important across the income spectrum. On a related subject, shoppers are demanding more and more transparency about products and ingredients – and retailers can put pressure on suppliers to deliver this transparency. Finally, digital, the impact of which upon retail is increasing. All of this and more she covered at the Beyond Retail 2016 event held in Camps Bay last week. And much, much more of which can be experienced in the Trade Intelligence Retail Trends presentation. For more info click here.
Comment: You can thank us later.
IN BRIEF
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Pioneer Foods Jiminy Cricket!
In a move probably not guaranteed to send shareholders running sobbing for the window ledge, Pioneer Foods is forking over the R4,000 it owes the Companies and Intellectual Property Commission (CIPC) for misrepresenting its annual turnover, under-disclosing certain turnover values in its annual return submissions to the CIPC. Wrist. Wrist! Slap! Slap! Now don’t do it again.
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Dis-Chem Holy smoke!
And finally – much more on this next week – no less a personage than Dis-Chem’s Mr. Ivan Saltzman has announced that the pharmacy will indeed be listing on the JSE. The business will in all likelihood be listed in the six-member food and drug retailers sector, which includes Clicks.

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