THIS ISSUE: 25 Jun - 01 Jul
So here we are again in Level 4, and while it’s a less capricious and more considered affair than it was last time around, it’s still tough. Vasbyt everyone, and if you have the means, try to help the hospitality industry where you can and do your bit for our less fortunate neighbours. Enjoy the read.
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
-
Checkers Donut pass go
In the United States of America, patrons of Starbucks and afficionados of Krispy Kreme donuts are seldom to be found in the same state or political party, let alone the same store. Not here in the Beloved Country though, where our differences unite us. Checkers, which as you know has already enjoyed successful in-store brand collaborations with the likes of Kauai and Starbucks, will be launching the venerable Krispy Kreme brand in an initially limited number of stores nationwide, with added services like almost immediate delivery of the deep-fried delights via Sixty60, and individually wrapped donuts available through the Party Shops in selected Hypers for special occasions. One of these Krispy Kreme outlets has just opened in the new Blueberry Square flagship in Roodepoort, where punters will also find a well-stocked bakery, more than 400 varieties of cheese and a cellar full of the finest local and international wines.
Comment: Checkers continues to make a play for the upper LSMs who were traditionally the perquisite of Woolworths.
-
-
Massmart Everything but the kitchen sink
Further evidence, if more were needed, that Walmart remains committed to its investment in Massmart came this week with the news that the Big Feller is springing a not insubstantial $11.34m over the next two years for payments to Genpact, a financial service provider to Massmart. Genpact is a multinational professional services firm that does back-end office work for many Fortune 500 companies, and was hired by the Men in Black in January to do tax stuff and account payments. Walmart’s generosity will take some of the cashflow burden off Massmart for the next couple of years as its strategy of consolidation and cost-cutting kicks in and it returns once more to profitability. The retention of Genpact seems to follow an outsourcing trend followed since the arrival of Mitch Slape – Massmart’s IT software support is now handled by a Walmart-owned call centre in India.
Comment: Massmart has not been the bargain Walmart had hoped. But nobody can say they aren’t giving it a proper go.
-
-
Pick n Pay Driver’s licence
In what … seems like a good idea? we suppose? Pick n Pay will soon become the first retailer in South Africa to sell wine to South African motorists. Or rather, to sell wine to people frequenting its Pick n Pay Express stores in BP forecourts – BP being the first petroleum company in South Africa to be granted a liquor licence. “As a brand that emphasises safety and convenience, we are excited to offer wine takeaway sales through Pick n Pay Express for customers looking to pop in an out… to go pop the cork at home,” says BPSA head of convenience, Belinda Petersen, roguishly. In April last year, you may recall, BP launched a delivery service to COVID-besieged punters through a partnership with Mr D. And if you have a hankering for more info on the changing forecourt convenience retail space, take a look at our insightful report here.
Comment: As petroleum meets its inevitable and timely end, businesses like BP would indeed do well to explore further avenues for diversification – although renewable energy might have been a more logical starting point.
-
-
International Retailers Monopoly money
Last week we reported that a private equity outfit had made an insulting offer for the purchase of Morrisons in the UK. Now it seems there may be other suitors about – including the young Squire Amazon, reputedly in possession of a fortune and in need of, well, everything really. Amazon has partnered with Morrisons for some time now, and the fit seems good for both, providing a brick-and-mortar toehold for Amazon and piles of ready cash for Morrisons. Also in the UK, German discounter Lidl has opened another 20 stores and is well on track to meet its target of 1,000 by 2023. In the US, rival Aldi is reporting a slight but solid increase in foot traffic of +3.4% over the last six months, and with 2,100 stores already in, and another 100 to come before the year is out, looks set to topple Albertsons as the third biggest retailer in that vast geography.
Comment: The ongoing global shakeup of grocery retail roars on, driven by bricks and mortar discounters and online retailers alike.
MANUFACTURERS AND SERVICE PROVIDERS
-
Unilever Cancel this
Research from that global behemoth of marketing and branding, Unilever, has found that nearly one in two people from marginalised communities – people with disabilities, and Black, Hispanic, Asian, and LGBTQ+ people – feel they have been stereotyped in some way through advertising. And that 71% of all punters surveyed believe that stereotypes in media are harming the younger generation. To address this, Unilever is broadening its commitment to its 2016 Unstereotype initiative, going even deeper to make real, structural changes to the entire marketing process, not just the more high-profile advertising component. It aims to provoke and integrate more diverse and inclusive thinking across every brand – from new product development through to advertising production. Among its bolder commitments is an undertaking to eradicate any digital alterations to photography, with a 100% ban on changing models’ body shape, size, proportion, or skin colour.
Comment: We are in the midst of a profound cultural shift. Brands that recognise this and act on it sincerely and at scale will retain the loyalty of an increasingly vigilant young consumer.
-
-
Futurelife Cereal number
Shaking up the school morning this week is Futurelife, which has just launched Futurelife Kids, a cereal containing a host of essential vitamins and nutrients in innovative packaging that engages curious young minds with interactive and fun learning activities. Their words, not ours. The cereal contains 33 different nutrients for brain, bone, and immune support, includes probiotics, consists of whole grain oat clusters and multigrain pops, comes in vanilla, chocolate and strawberry, and contains 40% less sugar than the (unnamed) market leader in pre-sweetened cereal. And this being 2021, the packaging is also smart-phone friendly with augmented reality to attract a generation that has never been further than 4 feet away from the nearest smart phone.
Comment: This stuff sounds like the absolute bomb. Cue an arms race among the suppliers for functional kid-friendly breakfasts.
TRADE ENVIRONMENT
-
Lockdown The great leveller
Level 4 again, and yes, things are not great. But they’re somewhat better than they were last time we trod this dreary path. Hot food may now be collected from restaurants rather than just delivered, so there’s that. You can exercise out of doors – but not in puffing, sweaty groups. There’s no international travel ban, and you may cross provincial boundaries too, although Gauteng is closed for leisure purposes. And while stores should close by eight to avoid falling foul of the curfew, there’s no restriction on what may be bought there – except, of course, for alcohol, the ban which returns in full force.
Comment: We aren’t going to sugar coat this. It’s tough on everyone, especially businesses which depend substantially on booze to make ends meet. But it’s not a return to the bad old days of the beginning of the pandemic.
Sign up to receive the latest SA and international FMCG news weekly.
Tatler Archive
Next Event
19 September: Corporate Retail Comparative Performance H2
“We have climbed many hills before, and we will climb this one too. We will do so by working together, as we have always done.”