THIS ISSUE: 30 Mar - 05 Apr
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Checkers The Gold Coast
Ahhh, Ballito. The waving palms, the shimmering cane fields, the dolphins at play in the deep blue waves of the Indian Ocean, the matriculants getting hammered on daddy’s coin at Rage. The new Checkers. And what a Checkers! Promising to elevate the consumer experience through its world class in-store services, the stores boasts several well-appointed value-adds, like Cheese World, offering 400 cheeses from around the world, a sit-down café, a sushi bar (the first in KZN), a hot and cold foods deli, a bakery and a LiquorShop. A fully-appointed Money Market, where you can get everything from a cash transfer to a Gold Circle ticket to see Shakira, if she happened to be headed this way.
Comment: Shoprite was an early passenger on the value-added train, and seems to have upgraded to first class recently.
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SPAR Jump around!
Those icons of business based in KZN (whence comes all manner of good things except perhaps presidents) SPAR and Mr Price, are joining forces to take on youth unemployment which of all the problems lined up against the Beloved Country these days is perhaps the most pressing. Through the MRP Foundation’s Jump Start skills development initiative, they are partnering to provide valuable retail work experience for school leavers. The programme has trained more than 22,000 previously unemployed youth and jump started more than 10,000 jobs and careers since it kicked off in 2008. Now it has been bolstered by support from SPAR, which initially kicked in R1.5million worth of training but has since upped its stake to over R10 bar, providing foundational life skills and valuable hands-on work experience, specific to SPAR’s retail environment.
Comment: For anyone with doubts about the worth of the initiative, we would refer you to our Weekly Guru.
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Walmart Clicks, brick, tricks
Fascinating stuff over at Forbes if you’ve the inclination to have a look. If not, here’s the lowdown: Amazon and Walmart (the latter presumably seeing the writing on the wall) have launched against each other a price war of the sort which causes punters to lunge for their credit cards and order 12 of everything, so far so good. Amazon have opened its first two pickup spots for groceries under AmazonFresh, a service available to prime members. The spots are in the world capital of early adoption, Seattle, but many, many more will doubtless follow shortly. Don’t confuse the service with AmazonGo, whatever you do: AmazonGo is the experimental convenience store with no checkout lanes, open only to Amazon employees at the mo. And don’t count Walmart out yet either: they offer pick up from their e-grocery service, Walmart Grocery, in more than 30 metropolitan areas in the US and are adding more all the time.
Comment: Someone quickly come up with a model that is not going to totally kill bricks and mortar, which in some industries, like clothing retail, is fast become an expensive relic of a more genteel age.
MANUFACTURERS AND SERVICE PROVIDERS
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Tiger Brands Flour bombs
UAC of Nigeria assures us that despite Tiger Brands’ disastrous adventure with Dangote Flours, the Striped One remains committed to its Nigerian business. You will recall that Tiger bought 49% of UAC’s foods business in 2010. UAC Foods is trundling along in fits and starts, with a pre-tax profit of 1.14 billion naira last year, down from 1.43 billion naira, and the share price 23% down this year so far. Nigeria, Africa’s biggest economy (ow it rankles to type those words!) is in recession for the first time in 25 years, as low oil prices and declining foreign reserves put the brakes on. Tiger has not specifically commented on the UAC results, but has let it be known elsewhere that the Dangote flapdoodle would not affect its commitment to UAC Foods and Deli Foods.
Comment: As businesses like Shoprite have shown, it is possible to make a buck in Nigeria. But perhaps – as is so often the case – it’s more tricky for a supplier.
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Unilever We do have a very nice bridge over the Thames you may be interested in….
The sky seems to have turned a little darker for Unilever CEO Paul Polman in recent weeks, as shareholders respond with anger to Le Grand Bleu’s refusal of a $143 billion takeover bid by Kraft Heinz, which saw the share price of both businesses jumping when the offer was still on the table. Polman apparently pressurised British government officials to decry the offer, cautioning that it would open the floodgates on great British institutions being bought on fire-sale terms by brash Yankees. For their part, disgruntled shareholders point to the disastrous run in 2013-14 when the business missed its sales targets for six quarters out of eight, and the fact that Polman seems more intent on saving the planet than putting cash in their pockets. There is some talk that one of the first orders of business of incoming chair Marijn Dekkers is to put out a job posting for Polman’s replacement on LinkedIn.
Comment: There is a fine line between sustainable business and sustainable value, and it’s one which Mr Polman has trodden with courage – but clearly with mixed success.
TRADE ENVIRONMENT
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Credit Rating So that happened…
S&P, if you have had your head under your desk all week, and we don’t blame you, lost no time downgrading our investment rating to junk after Sunday night’s desperate cabinet reshuffle. But ominously, they gave a whole host of reasons for the downgrade, including slow economic growth‚ increasing rates of government debt‚ financial mismanagement at parastatals and the fact that our corporates – presumably driven by fear of dodgy credit ratings (!) are not investing their cash in the Beloved Country. Oh yes, and the fact that you – yes you – have not been paying your e-tolls, putting further pressure on the fiscus. This latter seems like a stretch. What does not, is the fact that Moody’s may be next. And that in the face of a weaker rand, lower infrastructure spending from a government that cannot borrow as easily, and the threat of an interest rate increase, South Africans are going to find it even harder to make ends meet – and so will the businesses which serve them.
Comment: This is not an own goal. It’s the worst player on the team ripping off his jersey, stealing the ball, dousing the field in paraffin and setting it alight.
IN BRIEF
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SPAR A brand on the go
And speaking of SPAR, which we were earlier, and also new stores, which we were a bit before then, SPAR has opened a cracker, a SPAR Express forecourt convenience store, at the Shell in Gateway, KZN. And it’s a handsome little devil, jam-packed with the sort of stuff that gets weary travellers rolling in: real Italian coffee at the beantree express, crispy-crumbed Chikka Chicken and SPAR freshline baked goods and produce. Nice one.
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Stellenbrau Another one bites the suds
You can’t really blame the owners of these garage-founded small enterprises, can you when they sell their trademarks and their efforts for the next three or four years or so to the big boys for what seems like large moola at the time? Which may or may not be the case with the owners of Cape-based microbrewer Stellenbrau, who have just sold the business to Heineken, who say that it reminds them of themselves 150 years ago.
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