THIS ISSUE: 28 Sep - 04 Oct
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Woolworths Phoning it in
Online shopping, as the tech-savvy millennialists among you know, is expected to grow at a whacking +19% this year and to hit R18bn worth of sales on local websites. Sensing a good thing, Woolies have developed an application – an “app” if you will – that allows the time-pressed shopper to order groceries– or indeed clothing, bubble bath or even a nice, fluffy towel – directly from his/her mobile phone – although online groceries are still low in terms of profitability. Woolies report that over 60% of traffic to their site comes from mobile phones, and that there has been a +64% increase in mobile transactions over the last year. All of which explains why the Dapper One has just launched the “most comprehensive retail app in the country” (their words), on which punters can check their loyalty points, view and manage their financial products, check stock at their local store, manage their shopping lists, actually buy stuff, and of course “get daily inspiration for food and fashion.”
Comment: Inspiring stuff indeed.
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Food Lover’s Market Lunch sequence
Food Lover’s Eatery, eh. Where – reading between the lines – lovers of food go to eat. And which, according to no less a personage than CEO and co-founder Mike Coppin, they are doing so in such numbers, and at such a rate, that the establishment “has already proved to be the fastest gourmet lunch offering in Sandton.” The restaurant bears more than a passing resemblance to global offerings like Eataly or Dean and DeLuca, and seems to hit the spot for SA’s power lunchers – three other Eateries do a brisk trade in Cape Town’s CBD too. It’s also a great showcase for the ingredients on offer at the more conventional stores, which now number more than 124 across Africa, with 11 more to come by the end of the year. The business also runs 285 Freshstops. Where other retailers include an obligatory focus on fresh in their strategic imperatives, Food Lover’s is all about fresh, and owns FVC International, one of SA’s biggest exporters and importers of the good stuff.
Comment: A great business, and a powerful brand.
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Leroy Merlin If you only have un marteau, every problem looks like un ongle.
Among the headaches Massmart and SPAR didn’t think they would be facing this time last year, would be the arrival in South Africa of an eccentrically named French purveyor of home improvement materials. And yet, here we are. Leroy Merlin – the third largest retailer in the world – has just set up shop in Stoneridge Centre, Edenvale, Gauteng, with 17,500m2 of floor space, every department you can imagine from plumbing to lighting, a large selection of brands imported from Europe and – get this – a Mugg and Freaking Bean. And something called a Workshop Fan Group of likeminded handy people who get together every month to chat about how much they enjoy changing lightbulbs and installing cat-flaps. This group was established some 15 months ago as part of the advance brand-building operation, and sounds millennial as all get out to us. And as if all this isn’t enough, they’re pioneering a type of business they’re calling “phygital”, which…actually we can’t.
Comment: We just can’t. But: it sounds like an impressive operation that will appeal to those weekend warriors who pride themselves on a certain je ne sais quoi.
MANUFACTURERS AND SERVICE PROVIDERS
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Tiger Brands / Premier Foods Joule in the crown
Here’s another one of those periodic spats that roil the Advertising Standards Authority, where Premier and Tiger Brands have got into a right how’s-yer-father about the use of the words kilojoules and calories, respectively, on bread packaging. Here’s the skinny, as far as we can tell: Premier objected to Tiger’s use of the expression on theirAlbany Ultimapack “Only 67 Calories Per Slice”. Any breadman can tell you, they say, that the Kilojoule is the only acceptable measure of the energy content of food, and that this is laid out clearly in the pertinent legislation. Punters could get confused they say, and assume they’re getting less of the good stuff per slice than they actually are. Tiger argue that the kilojoules are right there, in the small print on the back of the bag, as laid out in Section 14 (b) iii of the Act. This notwithstanding, they’ve agreed to make certain arcane changes to bring everything back into line.
Comment: We observe the final outcome with interest.
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Agriculture High times
With the legalisation of marijuana in the rolling hills and plush suburbs of the beloved country, a big payola will be coming the way of those who grow the stuff. And if the department of agriculture has anything to do with it, these will be smaller farmers in the aforementioned hills, and not pharmaceutical or tobacco giants. The department is busily developing a commercialisation model for rural growers, and leading an inter-ministerial team that is developing the necessary regulatory framework, looking at production, research and technology, and commercial feasibility. Over in the US, legalisation has created in excess of 100,000 jobs; the Department is hoping for a similar result here, where we need them more.
Comment: Those guys in the Department have been busy. They need to chill a bit.
TRADE ENVIRONMENT
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Trade Hey hey!
How cool is this? After July’s trade deficit of R5.3bn, August brought us a surplus of R8.79bn according to the gimlet-eyed worthies over at SARS, beating the expectations of economists by an awkward R10bn: they’d expected a deficit of R1.8bn (speaking as language professionals, this is the equivalent of someone asking us to spell the word “belligerent” for money, and us replying “p-a-n-d-a”). Anyway, this news, in the context of a weak rand (which raises the costs of imports) means that we could be looking good for a surplus for the year, a shot in the arm for our current account. Some clouds do loom, however, notably a trade war between the US and China, with the volatility this could bring.
Comment: Testing times. But the news is never all bleak.
IN BRIEF
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Checkers Making a meal of it
Checkers is muscling in on the lucrative and growing meal kits market with the launch of its Checkers ‘Ready to Chef’ range, following competitors Woolworths and Pick n Pay into this lucrative and growing but slightly labour-intensive segment. For more on this, including some incisive words from our very own Maryla Masojada, have a look over here. In the meantime, let’s leave the last word to Shoprite shall we? “There will always be room for individual grocery items,” they intone.
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International Retailers Switching lanes
In the US, one in five shoppers who switched grocery stores chose Aldi. Difficult as it must be to measure such a decision (whoever really decides to switch retailers?), it’s good news for the German discounter, and cements its position as a (distant) second to Walmart. Over in Blighty, in the meantime, Tesco’s will be opening 10-15 stores in the next six months of its own discount chain, Jack’s, which will surely offer deep cuts on the back of Tesco’s buying partnership with Carrefour.
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Unilever Going Dutch
Brexit-era British shareholders are understandably miffed with Le Grand Bleu’s coming consolidation of the headquarters in Amsterdam. Investors controlling around 7% of the manufacturer’s UK-listed shares have opposed the deal, which needs 75% shareholder approval for the move. Taking head office to a single Dutch location would involve delisting from the London Stock Exchange and dropping out of the FTSE 100.
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