
THIS ISSUE: 13 Sep - 19 Sep
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Massmart A nice supplies
No word yet on how the new chap’s working out, but an interesting piece of news this week is that members of Walmart’s Global Sourcing team have been in the Beloved Country this week having a word with 18 Massmart suppliers who have global ambitions. This as part of Massmart’s Supplier Development initiative, which has just past its R1bn procurement mark, and which got CEO of Walmart International Judith McKenna all excited when then- Minister of Economic Development Ebrahim Patel mentioned it to her at Davos last year. The 18 suppliers in question produce everything from dried fruit to gardening tools. Global Sourcing is represented in 27 countries around the world, with a mandate to review products and ensure they match Walmart standards.
Comment: There is much to be admired in the Massmart business. Their Supplier Development Programme is up there with the best of it.
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Pick n Pay Squawkward…
If the twitter spat between Pick n Pay and Nando’s was the worst we had to worry about, we’d be a happier country indeed. Not even a spat really, but slow news week, so here goes. Do you remember the Rainbow Nation School of Advertising, circa 1995? Hearty, mixed-race posses in Teesav shorts and Springbok jerseys toasting Charles Glass at an Earl’s Court braai, that sort of thing? Pick n Pay had a stab at it this week with a moderately cheesy ad in which they attempted to re-brand chicken as Inkhukhu, which as you know … well obvs. A couple of the characters featured in fact attempted to rebrand it as eenkookoo, but enough. Nando’s, clearly feeling that Pick n Pay were heading into their territory at the nexus of poultry and humour, tweeted an essentially unanswerable put down: Yuh, kwaze kwa'awks. (Jeez that’s awkward). Various eminences of advertising weighed in, and the internet lit up.
Comment: Stick with it though, PnP. Our national bird does deserve a local name after all.
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Shoprite I had a mall in Africa…
Another week, another Shoprite opening in Kenya, this one in the purpose-built and boldly-named Shoprite City Mall in Nyali, Mombasa – the first store outside Nairobi. Shoppers will enjoy all the usual plus a Meat Market, Hot & Cold Foods Deli, Fish Shop, Bakery and Fresh Fruit & Veg. The Group is punting benefits to locals at what is a difficult time for businesses beyond our border, pointing to the fact that 80% of what they sell is locally produced, and that the store will create 115 new jobs, 65% of them for women. There’s another store coming at the end of September, too. In tangentially Shoprite news, in case you were worrying about that record R1 beeeeeellion fine the Financial Sector Conduct Authority had slapped on Steinhoff, well don’t. They’re getting away with the gentlest tap on the wrist they could have hoped for, a R53m tiddler, on account of the fact that they’re in a pretty shabby state right now and they co-operated with the authorities (instead of skipping over to Mauritius with some suspiciously overstuffed suitcases? Ed).
Comment: But they’re not out of the woods yet… various aggrieved shareholders are pursuing them, including Oom Christo, who reckons he’s owed a bold and uncompromising R59bn.
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International Retailers Jack be nimble
Tesco’s answer to Aldi and Lidl – Jack’s – is not looking so sprightly one year in. Having promised 10-15 stores in the first six months, they’ve opened just ten in a year, and have generated sales of only £24m – which experts reckon is about half of what it should be given the footprint. Jack’s, you may recall, was opened as a kind of centenary celebration for Tesco and is named after the founder Jack Cohen. It carries around 2,600 lines compared with the average Tesco’s 25,000. Over in the US, meanwhile, Lidl is growing hand over fist, with a bumper year so far after the acquisition of 27 stores from Best Market of Long Island. Lidl itself has 71 stores stateside. Back to the UK, then, where supermarkets are alarmed at the promise by Michael Gove, the minister in charge of no-deal Brexit planning, that there would be no shortages of fresh food if Britain leaves the EU without agreement on 31 October. “As night follows day, if 50% of lorries are delayed there will be gaps on the shelves inside seven days,” intones ex-Sainsbury’s CEO Justin King, who reckons the Tory government is trying pre-emptively to dump responsibility for any shortages on retailers.
Comment: Don’t stand for it, mates.
MANUFACTURERS AND SERVICE PROVIDERS
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AB InBev Space race
Distell and AB InBev are in a dust-up at the Competition Tribunal over space on the shelves at liquor stores nationwide and marketing agreements with sports stadiums. Distell alleges that AB InBev offers incentives like flat screens, fridges and store makeovers in exchange for exclusive promotional rights in those stores. They also accuse the Big Feller of muscling its way into stadium deals which prevent competitors for grabbing any marketing or promotional space there. These moves, they say, are in contravention of the merger conditions and Distell want the Tribunal to send their complaint for investigation to the Competition Commission; AB InBev dismisses Distell’s accusations with an airy wave of the hand. Legal Counsel for the Commission, in the meantime, has said that the allegations do not constitute a breach of the merger conditions.
Comment: The fact that they were the two biggest players in the market should, we believe, have been enough to prevent the deal. But we’re obviously hopeless romantics.
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Brands Brand new day
Hold onto your hats, the results are in for the 2019 Ask Afrika Icon Brands survey, and here’s your top five: Kiwi (by a long margin) McCain Coke Lucky Star Sunlight Koo OK that’s six, but you can’t have a top anything survey without Koo in there somewhere. Our retailers fared less well, with Shoprite at 26 and Clicks at 34 and no one else anywhere. Among the findings of the survey were that consumers are increasingly self-obsessed, less brand loyal than they have been, super-sensitive to price, and interested in sustainability.
Comment: Is it possible that we are at the end of branding, as we known it? We are merely asking the question.
TRADE ENVIRONMENT
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GDP Growth Green shoots
Cooking on gas, my bru. That’s the state of GDP growth, if we’re to believe StatsSA, and they’ve given us little reason to doubt them in the past. GDP was up +3.1% for the second quarter, which just goes to show how much may be accomplished when you can switch the lights on. A big chunk of that came from mining, which came storming back at +14.4%, with finance in second at +4.1%, retail at +3.9% and manufacturing at +2.1%, well done FMCG. Agriculture, down -4.2%, was the single dark cloud in an otherwise azure firmament. Can it be maintained? Consumer spending was up +2.8%, mainly on durables, which suggests that those punters who have jobs and disposable cash may be feeling more buoyant than they have of late. Lest we get too excited, if we maintain growth at +2% for the next couple of quarters, we’re still only coming in at 1% for the year – which with a population growing at +1.9%, well, you do the math.
Comment: If globally we kept population growth at 0 or better we wouldn’t need the sort of endless economic growth that has got us on the mess we’re currently in.