THIS ISSUE: 05 Oct - 11 Oct
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Shoprite Appy now?
Helping businesses offload their hard-earned this week is Shoprite. To its already impressive portfolio of financial services it is now adding a function which enables businesses to make cash transfers to multiple recipients – like staff salary accounts – for free. That’s right, gratis and mahala. The delivery system for this is of course the Shoprite Money wallet, a USSD system which enables punters to deposit, withdraw or send money as well as – and this point is crucial – buy groceries at any till point in all Shoprite, Checkers, Checkers Hyper and Usave stores without cash exchanging hands. They can also buy electricity or airtime. Shoprite Money launched in May 2018, and has reportedly already signed up 100,000 account holders.
Comment: Smart move – the payroll functionality may well result in an explosion of users, as businesses sign up their employees for the system to ease their payday headache. And every one of those users is a potential Shoprite customer.
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Choppies All sorts of drama
Choppies are still playing all “dog ate my homework” with their results, and this has led the Botswana Stock Exchange, which takes a dim view of such things, to halt the trading of its share until the results see the light of day. “It’s all perfectly normal,” explained Choppies by way of clarification. “Thing is, we are reassessing historical figures related to business acquisitions, value of inventory, property and others.” This helpful explanation, which refers in part to a review of inventory currently being conducted by PwC caused shareholders to flee the share like a herd of startled Gemsbok in the Kalahari, with the loss of 1.7bn Botswana Pulas in value off the market cap. In addition to the reassessment, a dispute with Zimbabwean shareholders, including that country’s ex-VP, has added to the air of general uncertainty which seems to prevail chez Choppies right now. And social media commentators, piling on as they tend to, have warned darkly that worse news from Choppies is imminent.
Comment: Perhaps the meteoric rise of the plucky retailer was too good to be true, perhaps these are merely the storms of adolescence. Or perhaps simply auditors who are being extremely cautious given recent events (viz. Steinhoff) on that front. Stay posted.
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Woolworths Organic chemistry
The Dapper One has got itself into a spot of bother, on World Environment Health Day no less, as its organic produce has been tested for some of its claims and come up wanting. ‘Testing of Products Initiated by Consumers’, a mouthful which somehow resolves itself into the acronym Topic SA, has tested the veracity of the claims on the packaging of Woolies organic baby spinach and sweet potatoes, through lab tests and farm and factory visits, and found conventional pesticide residue on the former. It also established the organic certification had expired, at which point, after some to-ing and fro-ing, Woolies tested its own spinach and then ceased production, dissatisfied by what it had found.
Comment: As the demand for and competitiveness of organic and ‘wellness’ products escalates, it is good and right that manufacturers and retailers alike be called out for potential irregularities. Just how these are then addressed will become the telling factor.
MANUFACTURERS AND SERVICE PROVIDERS
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Beer What’s your poison?
South Africa’s coolest brewery – a fact, not an opinion – is pioneering the use of hemp in beer on these shores. Poison City Brewing, which runs out of South Africa’s incorrectly-overlooked third city, has begun production of the beer, which contains a non-psychoactive variety of the cannabis sativa genus. “Hops and cannabis are very closely related and share many similar chemical characteristics, which means that hemp is an interesting and viable ingredient for beer-making,” says Graeme Bird, co-founder of the brewery. And lest you were thinking of wheeling out the tired old Durban tropes about surfers and weed and a city-wide lack of ambition, two other Durban legends, RCL Foods CEO Miles Dally and SPAR CEO Graham O’Connor have given financial backing to the venture. Other Poison City products have long been in the fridges at Tops.
Comment: The cannabis economy is set to explode. It is both likely and fitting that Durban should become its epicentre.
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Mars Red planet, green plans
Mars Multisales Africa has made important progress on the parent company’s 'Sustainable in a Generation' masterplan, by which it is investing $1bn – yes, a billion – to combat “urgent threats to sustainability.” Globally the business has hit some impressive targets – almost 100% of their coffee, palm oil and rice are sourced sustainably, and they’ve achieved zero waste to landfill from direct operations. Equally importantly, it has met some major human rights and social development goals. Here in Africa, the division has partnered with Mpact in implementing a new modular packaging policy which has saved more than 355 tonnes of paper, and enough water to supply more than 230 households per year, and converted all regional facilities to Zero Waste to Landfill sites.
Comment: It’s excellent to see sustainability couched in terms of urgent threat rather as some jolly opportunity to do the right thing and save a bit of cash.
TRADE ENVIRONMENT
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Jobs Summit Buy, the Beloved Country!
Among the most immediately achievable and practical measures to come out of last week’s job summit is the buy local campaign announced by SA’s CEO Cyril Ramaphosa. The message to buy local, he said, waxing ever so slightly poetic, “must reverberate across the country and it must find expression in concrete action”. And he’s not just encouraging you, the individual punter, to ensure that your baskets are full of local delicacies. No, he’s going after businesses, too, specifically inviting Adcock Ingram, Anglogold Ashanti, Clientele, Coca-Cola SA, Edcon, First Rand, Lixil, Mondi, Nando’s, Nestlé, AB InBev, Sappi, Sasol, Standard Bank and Tsogo Sun to join a ‘Buy SA Circle’ which will celebrate those businesses that have demonstrated in practice their commitment to supporting South African enterprise. He’s also pushing for an export drive that prioritises manufactured and processed goods. The plan, he says, is to create 275,000 jobs per annum.
Comment: South Africa has turned some very dark corners in the past. And Cyril has helped shepherd us around more than one of them. Political leaning aside, it’s time to pull together for growth – it’s what our nation needs and deserves.
IN BRIEF
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International Retailers Skin deep
In the UK, Aldi is aiming at 1,200 stores by 2025, including in areas where it currently does not have footprint. Currently, Aldi is Britain fifth-largest supermarket, with 7.6% market share and around 775 stores. Sainsbury’s in the meantime, is stepping up competition against the likes of Boots and Superdrug by expanding its beauty offering in department store-style aisles staffed by special assistants at 11 stores around the country. Frankly, it sounds like a bit of a half-measure to us, but whatever blows your hair into a nice loose spiral curl, we suppose.
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International Retailers Skin deep
In the UK, Aldi is aiming at 1,200 stores by 2025, including in areas where it currently does not have footprint. Currently, Aldi is Britain fifth-largest supermarket, with 7.6% market share and around 775 stores. Sainsbury’s in the meantime, is stepping up competition against the likes of Boots and Superdrug by expanding its beauty offering in department store-style aisles staffed by special assistants at 11 stores around the country. Frankly, it sounds like a bit of a half-measure to us, but whatever blows your hair into a nice loose spiral curl, we suppose.
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Unilever Nexit
Last week we were casually flinging about reference to Unilever’s impending move to Rotterdam like it was a done deal and the post-brexit UK shareholders like they were powerless to stop it. Wrong, wrong, wrong. Turns out the scheme of Dutch PM Mark Rutte to scrap a withholding tax on dividends has, in part, put paid to the move, and the dual-HQ model remains. Go scrappy Poms.
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Unilever Nexit
Last week we were casually flinging about reference to Unilever’s impending move to Rotterdam like it was a done deal and the post-brexit UK shareholders like they were powerless to stop it. Wrong, wrong, wrong. Turns out the scheme of Dutch PM Mark Rutte to scrap a withholding tax on dividends has, in part, put paid to the move, and the dual-HQ model remains. Go scrappy Poms.
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