Woolworths’ holdout franchisees, as represented by the Woolworths Franchise Association, are apparently “shattered” by a change in negotiating tactics on the part of the Dapper One. Originally, the idea was that Woolies would negotiate with the Association to agree on a fair valuation method for the stores. However, it now transpires that the Association did not receive a mandate from the franchisees to negotiate on their behalf, and Woolies is now having a word with the individual franchisees privately. Also, Ian Moir, who was originally to be conducting the negotiation on Woolies’ behalf, has been pulled off the case, which has been handed over to unknown quantity and newly-appointed head of franchise John Fraser. Interestingly, Woolies doesn’t have a buyback clause with over half of the 76 franchise stores, and will allow those stores to run the course of their contracts, should they so desire – at a substantially reduced PE.

Comment: It started ugly, it’s going to get uglier.

Nice work, Mr Kneale. Sales up 9.1% to R13.9billion, profit for the year up 19.3% to R564million for the year to June. This pleasing result, coming as it did at a time when the retailers are nervously pacing the marbled foyers of their emporia and checking their pocket watches against the arrival of the first of the festive shoppers in what is widely predicted to be a slow season, was due in part to the perennially miraculous resilience of lipstick and nylons during times of global crisis. Clicks also announced that it would be embarking one of those traditional South African share schemes whereby employees, some of whom are previously disadvantaged, receive 10% of the Group’s shares.

Comment: So there you go. It can be done, with lipstick and a stiff upper lip. But not, of course, at the same time.

SPAR has kicked off a great new repositioning campaign which places the customer at the heart of everything it does, based on the simple but striking premise that everyone has a relationship with a particular SPAR in their lives – hence “My SPAR”. The campaign has kicked off with TV ads, press inserts, in-store point of sale and of course the ubiquitous social media, and is aimed at refreshing the traditional marketing approach which focuses, as you know, on product price and range. “SPAR isn’t in the food business, serving people,” points out Group Marketing Executive Mike Prentice. “We are in the people business, serving food.”

Comment: Great stuff – a campaign which takes the essence of a much-loved brand and distils it into a concept with which all comers can identify.

Sovereign Foods is launching a R150million rights offer which will significantly reduce its gearing and improve its cash flow to the tune of R2.5million per month, and reduce its current debt repayment profiles. A rights offer, as we are reliably informed by our friends over at Investopedia, is the issuing of rights to a company’s existing shareholders to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period. Chicken is in a spot of bother these days, with a deterioration in the average selling price of poultry products generally as factors like overproduction in anticipation of the World Cup and rand strength come into play, making Brazilian chickens attractively affordable, with imports perhaps hitting 19% by the end of the year.

Comment: Tough times for an industry which juggles a daunting array of variables.

SAB contributed R66.2billion to South Africa’s GDP in 2009, or a rocking 3.1% of the total, and supported (as opposed to created) 355,000 jobs. It also paid R10.2billion – or 1.7% of the total tax haul – directly to our very dear friends at SARS, who paid some of it back in the form of lavish parties hosted by government departments, at which, presumably, beer was consumed. Indirectly, it was responsible for a whacking R28.1billion in government revenue, or a total of 4.5% of all tax paid. Within the liquor industry, SAB generated 46% of GDP contribution.

Comment: Some of these numbers might explain SAB’s shall we say robust discussions with major customer Metcash over at the Competition Commission...

In the US of A, Nestlé has made a big splash with water, saturating the market with a range of products manufactured cunningly from a proprietary combination of oxygen and hydrogen molecules. Now it needs to expand into other areas, and where better than the growth market of bottled tea, a drink made from chemicals derived in part from leaves of a bush grown on hillsides in warm and humid climates, and popular in the non-US parts of the world. Nestlé already owns 35% of minor tea brands Sweet Leaf and Tradewinds, and plans to buy them outright within 18 to 24 months.

Comment: Last week, Nestlé reported a pleasingly unexpected 5.7% increase in global sales, driven by growth in emerging markets, increased prices and the raging success of Nespresso.

Over the past three years, 1.5million square metres of shopping centre space – 11 Sandton Cities – was added to the South African landscape, and despite this, according to the South African Council of Shopping Centres, we are not over-stored, given the aggressive growth plans of retailers like Clicks who plan to add 120 stores to their stable over the next two to three years. However, there is a view that during the boom years, some developers built monuments to their own gigantic egos rather than usable retail destinations, and that what today’s discerning retailer really wants is a nice little neighbourhood convenience centre, located in a high-density residential suburb, with space for 10-20 stores in a cosy 5,000m²-odd of space.

Comment: Sanity returns.

Inflation in August, as you know, dropped to 3.5%. The decline, although not dramatic month on month, was unexpected. The stronger rand, ongoing indebtedness among newly credit-shy consumers and a slow global recovery from recession are all factors. Some commentators in fact believe that there has been a significant and perhaps irrecoverable shift in the way consumers spend, which will see low inflation persisting for some time to come. There are some upward pressures on inflation – for example, the rate of remuneration per worker in the economy continues to grow at 15.8% per annum, while the rate of growth in labour productivity is down from 5% to 4.6%.

Comment: In the area of inflation as elsewhere in the global economy, we seem to be making our way through uncharted waters.

Pick n Pay has just announced the appointment of two independent non-execs to the board – Lorato Phalatse and Alex Mathole. The former has been most recently prominent for her position in the strategic and operational management of the Private Office of the President of South Africa, while the latter hails currently from Siemens where she holds the post of Executive Director and General Counsel: Legal and Compliance.

“You can expect Massmart to grow bigger outside SA if we get involved” would be an irresponsible way of reporting a comment made by Walmart’s executive vice-president, Africa and Europe, Andy Bond. Mr Bond actually prefaced this remark with the expression, “It’s still too early to say, but...”