THIS ISSUE: 03 Nov - 09 Nov
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Pick n Pay Tight shop
So the Pick n Pay Group has done OK these last three and a half years, sorting out its supply chain, trimming things back at head office, launching a range of beloved plastic trinkets, launching a second range of beloved plastic trinkets – OK scratch that last one – and generally getting back on a former footing. One area where it believes it can do better though is in customer experience, and to this end it will shortly be forking out R1.55billions, with a b, on new stores and revamps across both PnP and Boxer stores. New generation stores – with such innovations as faster checkouts and a broader product offering in PnPs, including store-in-store clothing, wine and personal-care departments – have been the focus of this spend. It’s an investment which seems to have paid off, yielding double-digit growth from these stores in the interim period through August. Centralised distribution has also been a big winner – where once 40% of a store was given over to storage that number is now down to 5 – 10%.
Comment: The second act turns out to be more thrilling than the first.
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Shoprite Fish Bicycle Pty Ltd
Last week, we indicated that we felt the timetable for Whitey Basson’s departure from Shoprite seems a little truncated. Now, there is some conjecture that the man is not simply “tired” and “gatvol” (his words, not ours), but eager to make his departure should the speculated Shoprite/Steinhoff negotiations kick in. According to certain analysts, Whitey could not see the commercial value in what would essentially be a consolidation of assets in Christo Wiese’s empire, and in fact had become something of an impediment to the move, asking publically, and only a little cryptically, what benefit there would be in putting the likes of a Toyota and an Anglo American together. The markets seem to bear this view out, with the share price jumping 5.5% on the announcement of Whitey’s retirement rather than the other way around. And that R50million bonus now seems with the benefit of hindsight, a harbinger of dramatic changes in the offing.
Comment: Proof, if any were needed, that as far as the punters are concerned, you’re only as good as the next buck you’re going to make for them.
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Woolworths MyGoodness
Woolies has been in business for 85 years, a fact that it is celebrating with characteristic responsibility by partnering with the MySchool MyVillage MyPlanet fundraising programme in making fifty R20,000 bursaries available to Woolies customers. Anyone can enter – all one needs to do is swipe the old MySchool card at the register, with a double swipe awarded for purchases of school uniforms and kids’ apparel. Woolies first opened shop in 1931 in the Old Royal Hotel on Plein Street, in Cape Town. It now has 440 stores in the Beloved Country and 86 elsewhere in Africa, and employs over 31,000 people. It has been MySchool MyVillage MyPlanet’s most visible supporter and has raised over R400million for the programme since getting onboard in 1999.
Comment: Excellent work, that unusually-well-attired retailer. A credit to the industry of which you are a veritable doyenne and an undisputed elder statesman.
MANUFACTURERS AND SERVICE PROVIDERS
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IMPERIAL Holdings Pit stop
Here’s something we never expected to report: IMPERIAL Holdings, now headed up by our favourite ex-retailer Mark Lamberti, has issued a profit warning against the likelihood of flat revenue and declining operating profit for the six months through June. Lamberti blames a range of external circumstances, including political interference in public institutions and state-owned enterprises, for this disappointing performance. Over to you Don Marco: “Such activity is being conducted with appalling self-interest, impunity and duplicity at the expense of national priorities such as economic growth, fiscal rectitude, policy certainty, unemployment and poverty alleviation, crime prevention and the funding of universities.” The circumstances most depressing to the IMPERIAL bottom line include subdued consumer goods and commodity volumes, currency movements and a 14.3% decline in reported new vehicle sales in the nine months to September. Among the issues keeping Lamberti up at night are the own goals of declining GDP growth and an investment status downgrade.
Comment: Telling it like it is. It’s a shame the man wasn’t able to take the IMPERIAL reins in a more propitious economic ambit.
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Coca-Cola Shock Report: Giant corporation has secret global strategy
So WikiLeaks (OK, in this case a hacker crew called DC Leaks) has come for Coca-Cola, and what they’ve turned up, while not particularly pretty, is not that surprising either: Coke has a strategy to tackle anti-sugar legislation at a local, state, national and international level. This includes the typical activities for which you’d contract lobbyists, like influencing reporters, keeping tabs on social media influencers and twisting the pliable arms of government officials. DC Leaks has laid bare a bunch of mails between Coke VP Michael Goltzman and Capricia Marshall, a communications consultant for the Big Red One and for a Hillary Clinton. Interestingly, no mention in the mails was made of South Africa (where Israel, France, the UK, Poland and Bosnia all cracked the nod). As you know, our government is attempting to slap a 20% tariff on sugar-sweetened beverages.
Comment: We’re shocked – shocked! – to discover that business is attempting to use some of its cash to influence government in the service of profitability.
TRADE ENVIRONMENT
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State of the Nation Rainbow Consternation
So a week or so ago we attended a sobering but ultimately uplifting workshop on the state of play in this great but troubled nation we call home. Convened by Deloitte, with Justice Mala and Clem Sunter on the bill, it was, aptly, entitled State of the Nation, and featured a bracing tour of what ails us and what still might: unemployment, power struggles, corruption, threatened nationalisation, the crisis in education. But Malala, at least, also looked at the positives: the rise of civil society, and the moment which has brought all major sectors together in defense of democracy. The reliably pragmatic Sunter, in the meanwhile, painted three scenarios, from the relatively rosy relegation to the truly horrifying possibility of social collapse, but also ended by suggesting that it was within our means to take the strategic steps necessary to pull back from the brink. For a more comprehensive report on this timely and enlightening event, click here.
Comment: You’re welcome.
IN BRIEF
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Shoprite And the Pulitzer goes to…
… Nigeria Today, which reveals the following: “50% of Nigerians don’t know who is the owner of Shoprite Nigeria Supermarkets. What you need to know is Shoprite isn’t a Nigerian company. Shoprite Nigeria is just the subsidiary of Shoprite Holdings Ltd, a popular South African retail firm founded in 1979 by South African Billionaire Mr Christo Wiese.”
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GlaxoSmithKline NiceOneSir
GlaxoSmithKline have successfully defended their acronym (the equally-catchy GSK) from use by a Hyderabad-based wannabe-rival, GSK Life Sciences Pvt Ltd. Unfortunately, they still haven’t managed to get their punctuation back from upstart Bangladeshi outfit Spacebar Spacebar LLC.
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