
THIS ISSUE: 13 Apr - 19 Apr
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Independent Trade Forum Independents Day – A Power Executive Panel Debate
The last few spots at this year’s Independent Trade Forum (ITF) are literally flying off the shelves, and if you haven’t got yours yet… well, you better. The ITF is a supplier briefing designed to inform effective and profitable trading relationships between suppliers and their Wholesale (‘general’ trade) and ‘traditional’ trade customers. The line-up this year includes the standard morning’s Trade Briefings, with strategic input from UMS and ICC, and the day will end with a power panel of executives from Coca-Cola, Tiger Brands, Diplomat, Nestlé and others. The debate? The South African channel framework and route-to-market – by creating a standard industry framework and set of definitions, can we smooth the supply chain and improve efficiencies? After all, we do all claim our goal is to bring food and groceries to the South African shopper at the best price possible. The only realistic place that can come from in the current economic trading climate, is efficiencies – what is the foundation step we can take as an industry to achieve that? … and more. Click here to secure your spot – seats are limited to 250!
Comment: At the ITF you’ll gain valuable insights from the independents into their value propositions, understand better the shopping habits and behaviours of main-market shoppers and the opportunities to promote your brands in the powerful ‘general’ and ‘traditional’ trade channels. See you there!
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Massmart Think Pink
Singing the praises of the Men in Black this week were the imbongis over at Business Report, who in a paean to foreign investment, singled out Massmart for special attention. “The Walmart-Massmart deal brought jobs, skills development and more consumer choice to South Africa,” they exclaimed. “The deal has also brought massive benefits to local companies by opening doors to export deals to them,” they raved, citing the example of Umlilo Charcoal, which last year shipped a container of the combustible stuff to a Chilean Walmart partner. In other Massmart news, they’re thinking of relocating the Game Head Office to Joburg, giving it greater proximity to suppliers and the other Massmart divisions, but dealing a blow to its KZN heartland, where it first raised the proud Magenta banner sometime in the 70’s.
Comment: At a business performance and infrastructure consolidation level – a solid move – but the price? The loss of a significant corporate head office in Durban, and the jobs of those unable to relocate; this is the dilemma facing corporate business in the 21st century. How do we balance looking after our people and delivering the profit numbers to meet the demands of financial analysts and shareholders? This remains the challenge.
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Shoprite Yes Chef!
Nice work from the Big Red One, who is busily upskilling no fewer than 4,000 staff of the specialist departments, including bakeries, delis, and fish, offering them a clear career path, and assistant chefs training to NQF level 2, offered in partnership with the International Hotel School. The training includes everything from telephone etiquette to knife skills and the preparation of sauces, and is run over four months in monthly three-day blocks. “We want to offer our employees opportunities to grow their careers and continue climbing the culinary ladder within and outside our business,” says Moga Pillay, spokesperson for the Group’s training programmes. In other Shoprite-adjacent news, Steinhoff have sold 6% of its STAR stock for R3.5bn in an ongoing effort to raise cash and claw its way back to respectability. The Steinhoff share price promptly hit a new low.
Comment: We have long been of the view that the best thing an employer can offer staff is training – and the best thing an employee can bring to the table is a desire to learn.
MANUFACTURERS AND SERVICE PROVIDERS
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Coca-Cola The PE Ratio
Welcome to Coca-Cola Beverages Africa (CCBA)’s new offices in the breezy environs of the Nelson Mandela Bay metro, where once we enjoyed a heady and character-building six months, but more of that some other time. CCBA is the world’s seventh largest Coke bottling partner by volume, and the largest on the African continent, accounting for around 40% of Coke sold in the motherland. The business is owned 65.5% by the Coca-Cola Company, and 34.5% by Gutsche Family Investments. This after the completion of the sale by AB InBev of its 54.5% stake in the business. The plan for CCBA now, says CEO Doug Jackson is “to be the best Coca-Cola bottler in the world and Africa’s most valuable independent food and beverage company.” PE is a more cost-effective place to house a business than other faster or flashier locales around the Beloved Country.
Comment: And when the light strikes the tiny waves just so on a cool afternoon in early autumn, you probably wouldn’t want to be anywhere else.
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Unilever Forging ahead
The Pope will give you three years off purgatory if you buy Unilever products, these days, and that’s official. OK it’s obviously not, but if, in the UK, you watch a new online Knorr ad all the way to the fifteen second mark, Le Grand Bleu will make a donation in your name to one of three charities: The People’s Kitchen, The Trussell Trust or WaterAid. The new video format was the brainchild of Good-Loop, which describes itself as an “ethical online video advertising platform seeking to fix the problems experienced in ad tech,” in a collaboration with Unilever’s in-house innovation outfit The Foundry. This after a recent speech by Unilever chief marketing officer Keith Weed, who promised that Unilever would sever ties with unethical digital platforms – like those which promote gender stereotypes or sow division – and would pursue a better, common, standard for viewability, verification and value of its digital media buys.
Comment: When a business like Unilever votes with its wallet, things start to happen.
TRADE ENVIRONMENT
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Business Confidence A shot in the arm
Well aren’t the boys (and indeed girls) in the boardroom a jolly bunch these days. Business CEO confidence is up to its highest level in an admittedly rough six years, buoyed by positively manic levels of optimism among the CEOs in the financial sector. The Merchantec CEO confidence index rose a walloping 56.18% in the first quarter to 60 points, from 38.4 points in the last quarter of ‘17. What’s done it? In a word, Cyril, although some of the big kahunas admit to being a little concerned about such niceties as a VAT increase, dim growth prospects, and the possibility of expropriation without compensation. They may have a point on the growth front, because the cognoscenti at the Reserve Bank have predicted that while GDP growth will revive to 1.7% this year, they believe it will slump to 1.5% in the one nine. Other commentators, including the Bureau for Economic Research, believe it could tick up to 2%, driven by private sector investment.
Comment: But in the meantime, let’s keep that little bit of positivity going because it’s the most we’ve had in a while.
IN BRIEF
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International retailers Flippin’ Heck!
In India, Walmart seem to have edged out rival Amazon in the purchase of main Indian e-retailer Flipkart (of which 16% of the shares are owned, interestingly, by Naspers), while back home in the US they’ve reached a deal with on-demand delivery service Postmates to help expand their service to more than 40% of homes in the US. Simultaneously, they’ve embarked on a massive store remodelling programme, with 500 sites targeted to include wider aisles, a redesigned electronics department with interactive displays, an updated pharmacy area with a new private consultation room, and additional self-checkouts inter alia.
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Pick n Pay Body of Evidence
Look we didn’t want to go there, but it’s news and has had a material if slight impact on the Pick n Pay share price this week. Sure you’ve all read the stories, but suffice it to say, it’s just never a good idea to store foodstuffs in any kind of proximity to dead people. Even if you’re a franchisee just trying to get by. And especially if it’s going to damage the brand of a great South African business that deserves better.

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