
THIS ISSUE: 08 Jun - 15 Jun
RETAILERS AND WHOLESALERS
-
Plastics In a Barbie world
Both Woolies and Pick n Pay have taken small but significant steps down the long, uncertain road which may lead us to a more sustainable future, with the announcement by the former that they will be phasing out single-use shopping bags by 2020, and by the latter that they will start introducing 100% recyclable bags. Woolies have a vision for a value chain of “zero packaging waste to landfill”. This as we learn that only 10% of all plastic ever made has been recycled. SPAR in the Eastern Cape, and various other SPARs around the country are either in the process of, or have already switched, plastic bags for paper, and Pick n Pay’s green range features all-recyclable packaging.
Comment: These are nice initiatives. But frankly, they represent a drop in the ocean, which as you know is currently being choked by plastic. Even better would be if the government banned all single use plastics by 2022, as the government of India has announced it will do.
-
-
Shoprite Express train
Shoprite launched its Retail Readiness programme in February 2016, with a view to making a dent in South Africa’s youth unemployment numbers, as well as training up its future staff. The programme comprises an eight week course in the basics of retail and equips graduates, who receive an NQF-level 3 qualification, for a future either within the Group or without – perhaps even in their own independent retail business. Since inception, 8,688 young people have been employed by the Group, putting the Big Red One on the way to achieve its goal of 12,000. The course includes three weeks of theory in basic business principles providing participants with an understanding of the financial, legal and business requirements of setting up and running a small to medium enterprise in conjunction with a large retailer, and then they go on to work in various departments for five weeks, including produce, butchery and the deli.
Comment: Worthy stuff, with the beginnings of a pool of franchise partners should Shoprite ever need one.
-
-
The Body Shop Pick-up artists
This story is not only tangentially about the Body Shop, in which we have a passing interest as it is a stalwart of the Clicks Group, but about Pargo, the e-courier start-up which has a network of pick-up points at stores all over the country for the delivery of online shopping orders, in a country with an unreliable postal service and no such thing as a safe and accessible front porch. Sorry, but a spade is indeed a spade. The The Body Shop (see what we did there?) deal will expand Pargo’s network to 1,500 locations which include large Clickses, SPARs, Freshstops and hundreds of independent retail stores. Clients include such online retailers as OneDayOnly, Spree and Bidorbuy. And in other Pargo news, the smart logistics outfit has just secured R15m in funding in a drive led by SAAD Investment Holdings.
Comment: Clever fellers, or what? Logistics for online retail is a challenge anywhere, but moreso here in the Beloved Country. South African ingenuity finds a way.
MANUFACTURERS AND SERVICE PROVIDERS
-
Unilever Steaming ahead
Unilever is continuing to put its money where its morals are with the installation of a biomass boiler that burns wooden pallets, waste wood and off-cuts from local furniture and door manufacturers, at its manufacturing plant on Durban’s iconically grim Maydon Wharf. In line with the practices of the retailers we heard from above, Le Grand Bleu has undertaken to ensure that all of its plastic packaging is designed to be fully reusable, recyclable, or compostable by 2025. The R50m boiler – which will save the business R17m per annum – is a modestly functional monument to this drive to sustainability. In other Unilever news, the business is reducing its reliance on advertising agencies to directly reach its punters, seeking to establish direct communications with over a billion consumers using its own databases. Chief marketing officer Keith Weed, a name we could not have invented, decries the lack of initiative by agencies in the new marketing landscape. “Consumers and technology are moving faster than the industry, as marketers we used to lead consumers, now marketers are chasing to get ahead,” he rants.
Comment: Forward-thinking stuff from a business we’ve come to expect no less of.
-
-
Nestlé Day Zero, every day
Mossel Bay, which has a large number of great white sharks and a modest quantity of natural gas, does not have much potable water. Good thing then, that the dairy factory Nestlé has elected to position there will be using precisely zero litres of the stuff. That’s (almost) right: it will reduce its water consumption by more than half in its first year of operation by reusing the water recovered from the milk evaporation process, saving 168 million litres of water a day. This saving will gradually increase until it has completely eliminated its need for municipal water, illustrating Nestlé’s commitment to a healthier future for people, communities and the planet. In unrelated Nestlé news, shares rose to a record high last week after highly-regarded activist investor Daniel Loeb mentioned that he had acquired a 1.25% stake in the business.
Comment: The presence of hotheads like Loeb in a business has been known to drive profitability, something of which the other punters are doubtless aware. Loeb’s $17bn hedge fund is also, not incidentally, admired for its consistent returns.
TRADE ENVIRONMENT
-
Consumer Spending Into the mystic
Giving a much needed kick to the dear old South African economy last year was consumer spending, and word among the worried beard-tuggers of the economystical persuasion is that all things being equal, this seems likely to continue, an iffy rand and rising petrol prices notwithstanding. In part this is because SA’s beleaguered households have rid themselves of some of their debt and are feeling flush: consumer credit pulled back to the tune of 8.3% in the first quarter, which also saw an all-time high in the level of consumer confidence: the BER/FNB index surged to 26 points from its fourth quarter slump of -8. Admittedly, last week’s shock announcement by StatsSA of a quarterly decline of 2.2% in GDP growth has knocked business confidence a little, and consumer spending is not a panacea. But the shoots are trending green, and some economists are speaking cautiously of GDP growth topping +2.5% by 2020.
Comment: It’s not a lot, but right now, we’ll take it.
IN BRIEF
-
Retailers The Butler did it
So congrats to Comrades ladies’ winner Ann Ashworth, and to her team, the (ahem) Massmart Athletics Club, as well as Tanith Maxwell from the Boxer Athletic Club who came in fourth. And of course to all of the other members of our great industry who took part, including Trade Intelligence’s very own Tarryn “Roost” Butler, who came in in a respectable 10:19:58. A grand South African tradition.
-
-
Tiger Brands Changing stripes
Tiger’s Chief Growth Officer Grattan Kirk has left the building to take up the reins at Exclusive Books. This as Tiger regroups after the listeriosis crisis, which across the industry caused the demand for processed meat to drop by 75%. Kirk will be replaced by newcomer Yokesh Maharaj who will be responsible for growth in exports and international, as well as snacks, treats and beverages.
-
-
International Retailers Oh, Behave!
“We always say at Tesco you don’t talk yourself out of a problem, you behave yourself out,” says new(ish) marketing director Alessandra Bellini. Among the problems Tesco has to behave itself out of is an accounting scandal, a horse-meat scandal, a chicken hygiene scandal and the proposed merger of rivals Asda and Sainsbury’s. And speaking of whom, Sainsbury’s are teaming up with Unilever to launch in-store ice cream parlours. Across the jolly old pond, in the meantime, Lidl are replacing CEO Brendan Proctor, who oversaw a not-entirely-successful rollout, with Johannes Fieber of Lidl Sweden. And finally, Walmart, Costco, Target and Kroger are in the throes of an all-out price war in order to grow market share, boost sales and clear out inventory. Boom! Crash!

Subscribe to the Trade Tatler to get an up-to-date overview of what is happening in the SA and international FMCG industry
Tatler Archive
- 2023
- 2022
- 2021
- 2020
- 2019
- 2018
- 2017
- 2016
- 2015
- 2014
- 2013
- 2012
- 2011
- 2010
- 2009