THIS ISSUE: 27 Jul - 04 Aug
YOUR NUMBERS THIS WEEK
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Metcash Hype it up
Metcash has ratcheted the Great Hybrid War of ’11 up a notch with the conversion of 8 Trade Centres into Metro Hypers, which will offer a truly retail/cash & carry experience to the South African punter – single items for you and I, shrinks for spaza owners and pallets for independent retailers, all under one roof. Another feature of the format is the inclusion of other trading brands as stores within stores into the mix – FVC’s Food Lovers’ market, Buildmart, NeoClassic Decor and Crazy Plastic for starters, with more to come. Metcash is in the throes of a turnaround strategy aimed at a return to profitability within three years, and the potential sale or listing of the business thereafter. Shareholders Old Mutual, Nedbank and Investec have bankrolled the strategy to the tune of R100 large – some of which has gone into the move to hybrid. Converted stores have grown in revenue 40% and over in the last 12 months.
Comment: Grab some stock as soon as they list, because the talented Mr Dodson has a plan.
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Shoprite Power Rangers
A busy week for the Big Red One. Women of the Year being announced, mergers in the franchise division being given a tersely approving nod by the Competition Nazis, grand new Checkerses being announced in once-unfashionable shopping centres, the business soaring up the rankings in the Global Powers of Retailing Awards and we don’t know what all. Regarding women – the flower of our nation and a credit to each of the categories in which the five winners were nominated, with Dr Brigalia Bam receiving hon. mensh. for lifetime achievement. Regarding franchise – yes to the OK takeover of Metcash’s 7-Eleven (or is it the other way round?) etc. Regarding centres – that would be a big refurb of the Checkers in Durban’s newly spruced Overport City, and regarding Power – 95th this year, up from 130th in last year’s Deloitte-run survey.
Comment: Jislaaik mense. Crack yourselves a bottle of Klein Das Bosch if you can find one.
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Suppliers Generally Hooooaaaaarrgh!
In the good-natured cage fight that is the FMCG manufacturing sector, it would seem that the major suppliers are in agreement about one thing: they all want a piece of the big guy over there. Licking a trickle of blood from their upper lip, Pioneer Foods reckon that the local retailers are all importing anyway, so competition with international suppliers or global sourcing contracts is yesterday’s news. Premier Foods, with an ominous crack of their knuckles, mention that stiff competition on the home front has readied them for the global scene. Clover, slapping a new band aid on last week’s stitches, say that the only real threat is from stuff imported illegally. And pig farmer Guy Williams, lowering under his Maori forehead tattoo, says that one outbreak of foot and mouth will do more damage to his business than five Walmarts, any day of the week.
Comment: So bring it on would seem to be the consensus, boys.
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Oceanfresh I’d like to be…
Sneakily, we avoided putting any Walmart news in the retailers section this week. That story will be around for a long while yet, and, frankly, we all deserve a little break. Until, that is, this section, where we’ve already slipped one in under your guard, and here’s the next one hot on its metaphorical heels! Lonhro’s Oceanfresh seafood division has announced that its Pure Hake Fillets will be sold in 500 Walmart stores in the US from 1 October. Deepwater hake, which we are assured is sustainably caught, is a new line for Walmart, ever on the lookout to broaden its offering to the American punter.
Comment: All of this gels nicely with our oft-stated belief that for South African businesses which produce something globally unique – rooibos, say, or rusks, or Jungle Oats or hake, Walmart might indeed be the Great White Father from Over the Sea.
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Adcock Ingram Pills, thrills and bellyaches
In their breezy, capricious way, the whimsical pencil-suckers over at the Competition Commission have given Adcock Ingram the go-ahead to acquire Nutrilida, manufacturer of vitamins, minerals and nutritional supplements for a sum said to be something between R220bar and R400 large ones. A bold acquisition in a sector into which Adcock is keen to grow, especially on the rest of the continent. But there are, ahem, caveats. The one is that the dear old Medicines Control Council, latterly of single-exit-pricing fame, is looking at imposing a similar regulatory regime on this sort of over-the-counter product. The second is the eager young Consumer Protection Act, whose aim it is to shield punters from wilder product claims – an area in which the fellow who writes the small print on boxes containing supplements and minerals have particular talents.
Comment: The ascent of Adcock is a story whose unfolding we look forward to in the days and years ahead.
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Empowerment Pale shelter
You may argue it one way, or you may argue it another, but the numbers, as always, speak for themselves: according to the Commission for Employment Equity, the appointment of Africans to top management positions in all sectors over the past four years increased by a negligible 1.4% to 12.7%, in a country where they make up 73.6% of the economically active population. At this rate, we will reach a state of equitable employment in 127 years or so. For white men, almost exactly the opposite applies, if you enjoy statistical curiosities and oddities: white men occupy 73% of top management posts, while they make up 12.1% of the economically active population. There’s better news among skilled and professional workers, where blacks now made up 70% and 52.3% of these segments respectively. Sadly, the worst-performing sectors were manufacturing, wholesale and retail.
Comment: Use it, don’t use it. We hear they’re recruiting white senior managers down at the whirlwind harvest.
IN BRIEF
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Woolworths Go on, avo nother
The dapper one has teamed up with a crew of Venda farmers whose avo plucking season starts several weeks earlier than the rest of the country due to favourable climatic conditions, to provide South African avocados in Woolies stores for longer, reducing the retailer’s dependence on pricy avocados from Spain.
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Woolworths (2) Local Retailer Discovers Source of Nile
Intrepid gentleman adventurer Sir Rodney Woolworth has discovered a mysterious underground river under the eponymous retailer’s Cape Town Head Office, which the firm is now using to flush the bogs, wash the roller, power the fountain that plays delicately at the end of the gravel drive leading up to the marble steps, and cool the air, saving the Mother City a refreshing 27,375,000 litres of water a year. As yet, no one has discerned whence this intriguing aquifer springs.
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Nielsen Running the numbers
Nielsen, which in recent years has dropped its initials for an air of greater mystery, has signed a cooperation agreement with an American retailer called Walmart to receive and analyse the sales information from the business’ US stores. This marks Walmart’s return to the information sharing model our great industry knows and loves, and will give the retailer better insight into what the people of Walmart either buy or would buy given half a chance.
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