
THIS ISSUE: 21 Mar - 27 Mar
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Store Openings Go big, stay home, whatever works
A whole bunch of store openings this past week, each with something to teach us about the strategies of the respective retailers. First up, Boxer Superstores, still on the march to dominance as a national discount supermarket, bringing the value, enjoyment and dignity of modern retail to all South Africans, with the opening of its latest store in Mamelodi. Makro, sticking to its knitting whilst introducing impressive big box store operations and shopper experience innovation, opened their state-of-the-art Makro Cornubia store in the densely-populated outskirts of Durban today. Look out for the photo feature which Trade Intelligence research team will be publishing, Shoprite, still expanding strategically in the motherland despite setbacks here at home, opened its second store in Kenya, in Nairobi’s Garden City Mall. And Pick n Pay continues to grow the franchise division beyond our borders, with the opening of its 22nd Namibia store operated by the Ohlthaver & List group, in Ondangwa.
Comment: Despite the difficult trading conditions, this is not an industry in disarray.
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UMS Spotted on the red carpet
Big news this week from Unitrade Management Services (UMS), two of whose members got major awards in February, at the 2019 IGA International Retailers of the Year awards, in San Diego, California. Supersave Food Town Hyper (Pietermaritzburg) and Take n Pay Food Town Hyper (Chatsworth) shared the International Retailer of the Year (South Africa) award, given for a range of criteria, including outstanding housekeeping, first-rate service levels, high standards of service departments, consistent pricing and – very importantly - community involvement. UMS, you will recall, has over 400 independent retail and wholesale members that benefit from shared buying power and such centralized services as marketing and distribution. IGA has a brand alliance with over 6,000 independent retailers in more than 30 countries.
Comment: Last words here should go to UMS Investment Holdings CEO, Jad Pereira: “The partnership always results in the development of a better business for all.” True, that.
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Woolworths Water week they’ve had…oh, shut up.
Some good news from Woolies this week that nevertheless has nothing to do with an increase in the bottom line: the viral water video, while showcasing the miraculous ability of South Africans to laugh at ourselves and – yes – even at each other, did zip for their water sales. Nada and niks. But Woolies did contract the wags involved - Qhama Sinkila, Gomolemo Nkwana, Banele Moss and Itumeleng Moboko – to dish out water at a water event at the Mall of Africa last Friday, under their LoveH2O fund, all decked out in water-saving RE: jeans. In other news of the stuff that gives us life, P&G is once again partnering with Massmart in the former’s ongoing Children’s Safe Drinking Water (CSDW) campaign. For every purchase of a P&G product from a Massmart store, P&G will provide the equivalent of a day’s clean drinking water to a family in need, through the distribution of P&G Purifier of Water sachets.
Comment: Dire times for the planet. But never has there been so much energy and creativity aimed at the challenges which affect us all.
MANUFACTURERS AND SERVICE PROVIDERS
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Agriculture Green shoots
A mixed bag of news from the fields, sheds and khaki-broek this week. For starters, the farmers are looking perkier by the minute, with the Agbiz/IDC Agribusiness Confidence Index improving by four points to 46 in the first quarter, measured on such criteria as market share, employment, capital investment, export volumes, and economic growth. Secondly, chicken producers are nervously eyeing Brexit, which may see further cheap imports flooding our markets. UK chicken producers, you see, are wont to sell their less-popular dark meat to Europe; with that market becoming more shall we say complex for them, they might try flogging it here, where we literally eat it up. Thirdly, the beef trade with the Middle East is opening up again, after some kind of an unspecified hiatus, yay. And finally, cannabis, say the worthies of Prohibition Partners, could be worth $US7.1 billion to the South African economy annually, by 2023.
Comment: So put that in your pipe and smoke it.
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Mondelez Gut busters
International snacking giant Mondelez, which brings such brands to market as Tuc, Toblerone and Trident, just to scratch the surface of the T’s, is going all-in on the growing category of functional foods. Under its SnackFutures innovation and venture hub, it’s just taken a stake in US start-up Uplift Food, which is developing a prebiotic range of snackable products aimed at improving gut health. Uplift’s powdered supplements can be added to existing products like smoothies, snack bars and cereals, so one can see how that would be a fit for Mondelez, which in turn will provide support in the areas of marketing, distribution, R&D and sourcing. Jointly, the businesses will be working in the strategic areas of well-being snacks, premium snacks, and digital platforms and capabilities – the latter, one presumes, with a view to educating punters on the benefits of a well-looked after intestine.
Comment: An interesting collab, and a model, perhaps, for some enterprising South African businesses?
TRADE ENVIRONMENT
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Retail Sales Lies, damned lies, and retail trade sales
Time to turn our attention to malls, those latter-day cathedrals to consumerism without which many of us would, Oh, dear, oh dear. Retail sales for the metaphorically gloomy month of January were up just 1.2% year on year according to the bearded sages over at StatsSA, a recovery from the decline of 1.6% seen in December. But in this great industry we call home, as measured in the sales of food, beverages and tobacco in specialized stores, they were down 2.1%, driven thither by well-documented economic headwinds, such as unemployment and the high price of fuel. Load shedding may put further pressure on sales, as many of the smaller retailers which are so vital a part of our industry and economy are forced to close their doors for hours each day. On the upside – as far as the embattled consumer goes, anyway – is that inflation remains in the lower half of the targeted band, at 4.1%, which may lead the Reserve Bank to do the right thing by the repo rate.
Comment: Tough times across the board. Let’s hope we remain in a state of growth, however muted, and that Moody’s holds off on the downgrade.
IN BRIEF
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International retailers A bad wrap
Some good news on the plastics front: Tesco in the UK are trialling the plastics-free, loose-only merchandising of 45 types of fruit and veg in two of their stores (ok so it’s only two for now, but it’s a start), while in Thailand, musically-named supermarket Rimping is experimenting with banana leaves to supplement plastics in the packaging of some of its produce. In Germany, Aldi is scrapping plastics on its cucumbers. And speaking of Aldi, it’s started to open smaller, convenience-format Aldi Locals in the UK, which is somewhat putting the wind up the big retailers, including Tesco, to bring this story to a neatly circular conclusion. (leans back, cracks knuckles).
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Nestlé All of the beautiful colours are very, very meaningful*
And now, from the mists of the mysterious islands, comes the fourth chocolate, of which poets have sung. Ruby chocolate, a naturally-occurring variety, has become a viral hit in Japan, where Nestlé launched it as a “nut-and-berry-stuffed” KitKat. Instagram influencers piled on, and you can now get it in 26 countries and counting. Nestlé have also enjoyed some success with its Green Tea KitKat that gives you a sense of self-righteous well-being despite the fact that you are essentially stuffing your face with green chocolate.
*for my 90’s crew. Ed -
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Fish Teach a man to fish
The Marine Stewardship Council (MSC), which as you know is a global organization dedicated to sustainable fisheries, has shown through DNA testing that less than 1% of the products it endorses were mislabelled, compared with the reported global average of 30% mislabelling – much of it deliberate. All of the mislabelling in the MSC’s sample came from the easy-to-confuse whitefish and flatfish categories. People want to eat sustainably, the world needs us to, and MSC is doing an incredible job helping to make that happen.
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