
THIS ISSUE: 14 Dec - 20 Dec
RETAILERS AND WHOLESALERS
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Shoprite I hear the tills echoing tonight
Big up to Shoprite, for the opening of their first store in Nairobi, taking on Carrefour in the lucrative Kenyan market, where at 33% formal retail penetration is second only to South Africa on the continent. The store takes over space once occupied by Nakumatt, the collapse of which, along with Uchumi, has opened up the market for foreign retailers. One of the big challenges is the cost of space, a factor which has caused Shoprite to turn down some otherwise promising sites.
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Pharmacy A healthy increase
Remember Single Exit Pricing? Back when we went to print on our very first Tatler, it had pharmacy retailers all of a flutter and puzzled as to how they would continue to make a crust. This year, they were pleased to hear that the Minister of Health is upping the maximum allowable increase over the SEP to +3.78% of that price, from last year’s more dismal +1.2%. This brings the increase into closer alignment with inflation and will have a healthy impact on the bottom line of businesses like Clicks and Dis-Chem, which have invested heavily in their prescription offering.
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SPAR In the bag
Big up to SPAR Eastern Cape, which was recognised at last month’s SPAR International Conference for leadership in sustainable retail as exemplified by its Stop Plastics campaign, which saw them sending 3 million fewer bags into the world from April to September this year than in the same period last year. And big up to SPAR generally for their success in Ireland and Switzerland, which jointly now account for 31% of turnover and make up over a third of all the stores in the Group, contributing 25% to operating profit. A good year for an enterprising business.
MANUFACTURERS AND SERVICE PROVIDERS
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Rooibos We’ve just twigged… (no. Ed)
This time of year puts us in a nostalgic frame of mind. Another story from the first issue of the Tatler had to do with a small local supplier of rooibos, Joekels, which had just acquired the Laager brand from Unilever. Now they’re owned in part by Tetley, and in 2015 Laager was named by Shoprite as Big Brand of the Year. Rooibos itself, of course, has followed a similar trajectory, with over half of our crop of 14,000-odd tons now going to 30 overseas markets, including Germany, the Netherlands, Japan, the UK and US, and a record high of 57,000 hectares under the twiggy stuff – double the area of just a decade ago.
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Aspen Just a spoonful of sugar
A couple big bits of news from Aspen Pharmacare this week. The one, not so hot: Aspen’s share price took a -9% hammering last week on the news that unless it does not conclude the €740m sale of its nutritionals business to Lactalis by the end of the year, the leverage ratio in its debt covenant will increase from 4 times to 4.75 times, and if you need help with that, might we respectfully recommend Investopedia, which has been a source of great comfort to us over the years. The second, more upbeat piece of news is that the business might be in a position to flog a portfolio of products mainly sold in Australia and New Zealand for R1.9bn, to the US-headquartered pharmaceutical group Mylan, with which it currently has a distribution deal.
TRADE ENVIRONMENT
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Retail Trends N-n-n-n-nineteen
Cloud-based POS software merchants Vend have come up with some trends for retail in 2019, and they make some solid sense, so here goes:Retailers that offer compelling in-store experiences will flourish: A box most of the great retailers in the Beloved Country are already ticking.Choice and flexibility – particularly in the last mile – will be more important than ever: We’re talking quick shipping, same-day delivery and in-store pick up here, which some South African businesses have already suitably adopted.Back office solutions will be at the forefront for many retailers: We think they’re saying, buy yourself a bit of Vend.Retailers will turn to new metrics to gauge performance: As omnichannel adds complexity to consumer behaviour, different ways of measuring it will be needed.Retailers will need to invest more in their workforce: While a shortage of labour is not an issue here as it is elsewhere, a shortage of skills is. Pony up, people, and do the right thing for your workforce.

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