20 January 2010
And so we come, at last, to the year that we dare not speak its name for fear of being jailed by FIFA. Hope it’s a goody,
with lots of promotional merchandise, lots of sales in those stores lucky enough not to be closed down by FIFA
motorcades, and of course lots of Tatlers, one almost every week in fact. Enjoy the read.
Market Share
What’s Nielsen’s market share, again?
In an historic first, Nielsen has been persuaded to vouchsafe us the actual market shares of the big boys. It turns out that
Shoprite came first with 29.4%, but they didn’t come as first as Pick n Pay (34.7%), although they came more first than
SPAR (25.5%) and Woolworths, in first place at 10.5%. As far as Pick n Pay is concerned, the issue is now resolved. As
far as Shoprite is concerned, it was resolved last October, when numbers from Nielsen, revealed, briefly, that they really
were coming first. Comment: Next week: Nielsen reveals the secret of man’s red fire.
Business Report 13/01/10
Woolworths
Fostering local talent?
Woolies new Foodmarket in Constantia Village has boldly launched with the new Woolies identity. The work of Massimo
Vignelli, the logo was in all likelihood developed under the stern eye of Woolie’s new creative director, recent Australian
Vince Frost, which for those in the know is like saying “Woolie’s new musical director, Mick Jagger”. The new store,
according to Foods director Julian Novak, puts the “food” into “foodmarket” with full on butchery and fishmongery,
cheesier cheeses, a deli counter and a crispy fresh in-store bakery. Comment: Woolies has very publicly expressed its
support for local creative talent, which is widely acknowledged to punch far above its weight globally, and which may in
fact have proved itself equal to the task of slapping a big sans serif W on a black square.
Tatler Reporter 19/01/10
Shoprite
We’ll have whatever he’s having!
Shoprite’s sales grew 11.9% to R33.1 billion for the six months to December, with like stores gaining 6.4%. These
numbers are apparently a little on the low side, brought there by weaker inflation and the effect of a stronger rand on
revenues from foreign stores, where a lack of space is also becoming an issue. Performance in SA itself was strong,
with total sales up 14.6% and like stores up 9.1%. Even furniture did OK, up 11.5% in an industry that was particularly
badly hit in the downturn, as our ropy old TV couch will tell you. In other Shoprite news, Mr James W Basson exercised
an option to buy 10 million shares late last year for just R6.51 each, and sold R3.7 million of the little chaps for a
handsome R65.96 apiece. Comment: Which is what we in the industry call “a result”.
Bloomberg.com 29/12/09, The Times 15/01/10
Tiger Brands
Hello, Kitty
Tiger Brands is poised for a further leap into Africa, tail lashing and whiskers twitching intently as it contemplates Capex
of R600bars for both acquisitive and organic expansion, into “existing, new and adjacent market categories”. Last year,
you will recall, the lithe one bought 51% of Haco Industries in Kenya, 74% of a Cameroonian chocolate business and all
of Nestlé’s Crosse & Blackwell business, although it was rudely rebuffed in its attempt to buy a controlling stake in rival
AVI. A big chunk of the wedge is likely to be spent on starting a R561 million upgrade to the Hennenman wheat mill in
the Free State. Comment: Springy.
Business Day 06/10/01
ABI
Bottling their emotions
Hot on the heels of the Pick n Pay/SACCAWU scuffle, and the booing of Julius Malema by Cosatu, ABI has been having
its own spot of bother with organised labour, this time FAWU, which has been on strike at the bottler since just before
Christmas. At issue is an 8.5% increase on salaries excluding bonuses, and while some FAWU members returned last
week and more were expected this week, the matter still seems to be simmering. FAWU has also asked that casual
workers and those employed through labour brokers, be allowed to return to work without prejudice. Comment: Casual
and brokered labour is likely to be one of the hottest issues of the next few years, especially in an industry with seasonal
peaks such as ours.
Business Day 18/01/10
Nestlé
The milk of human kindness
Nestlé has reopened its Harare plant after receiving reassurances from the government that its staff will be safe from
harassment. This after closing last month when government officials made an unofficial visit and ordered milk trucks to
be unloaded. Later, official doubts were expressed about the validity of the work permit held by Nestlé’s MD. Nestlé has
come under some pressure recently to purchase its milk from certain prescribed farms, notably those owned by one RG
Mugabe. Nestlé has announced its intention to keep on buying milk from contracted farmers only. Comment: This just
months after cancelling their regular order (under some international pressure) from a farm owned by Grace Mugabe.
Sapa 06/01/10
Retail Sales
Something borrowed, something new...
While consumer spending was down on the Bureau of Economic Research’s National Retail Index by what seems to us
a whopping 27% for the month of December, most malls reported business pretty much as usual, with slight changes in
the way people were spending. The Maponya Mall, for example, said there were fewer cash sales and impulse
purchases with a rise in credit transactions for the period, while the V & A Waterfront said that local punters
outnumbered furriners for a change, and that 2.3 million people had swung by in the month of December alone. Overall,
the prediction is that sales for the month of November will have fallen 5% year on year, although the Bureau for Market
Research is suggesting that there may be an uptick of around 1.8% in 2010. Comment: So keep those “everything must
go” banners up, boys. The ride is still bumpy.
Business Day 18/01/10, The Times 06/01/10
Consumer Trends
And a three headed dragon will eat the sun
Cleverboots trend predictors Mintel have identified the seven big ones for 2010, and here they are:
Resilience: Consumers can now officially take anything you throw at them
Reviewing and Re-evaluating: So where did we end up after Billy’s? Oh my God...
Accountability: Prove it. Unless of course you’re a Trend Agency, in which case you will never have to
Escapism: Bling is getting set to replace bubble baths and home cooking as the new bling
Media Evolution: You mean you aren’t on Blatter yet?
Ethical Responsibility: We are really going to get a worm farm this year...
Stability: Except, obviously, on Fridays and public holidays
Comment: And trend predicting will still be the easiest job you can get.
Namnews 04/01/10
Cadbury
Tangy chocolate anyone?
After 186 plucky years of being British, Cadbury has thrown in the towel and accepted a £12billion takeover proposal
from yankee mayo maker Kraft. This after various major shareholders – hedge funds, those sorts of people – had
indicated their willingness to accept the deal. Cadbury will now work with Kraft management “to ensure the continued
success and growth of the business for the benefit of our customers, consumers and employees”.
The Guardian 19/01/10
Discounters
We shall fight them in the malls
Back in ‘08, the UK was overrun by a veritable blitzkrieg of Das Harddiskounters, like Aldi, Lidl and Netto. Their eventual
dominance of retail seemed inevitable, particularly as the banks collapsed and people started to look hungrily at their
domestic pets. But as punters shuffle their way back to blingsville, this crowd are not looking so smart after all, losing
both sales and market share over the holidays as more traditional grocers like Tesco and Asda stopped worrying and
learnt to love the recession.
Belfast Telegraph 15/01/10
Australia
Tie me RSP down, sport!
More reasons not to go: They pay 50% more for their Cadbury’s Dairy Milk than you or I, 16% more for their Colgate and
60% more for their Maggi Noodles down in Aus. In fact, no product available elsewhere is cheaper in Australia, where
the only resource available in abundance is insufferable smugness.
International Supermarket News 04/01/10
Training & Seminars
MyCustomer is a series of training programmes and executive presentations designed to provide your business with the
insights you need to trade effectively in the South African consumer goods environment. The programmes look at the
FMCG Environment holistically, from the macroeconomic drivers that shape consumer behaviour to the retail responses
to these, including their positioning, strategy and operational execution. MyCustomer explores the areas of opportunity
for co-creating value with your customers, and inspires your team to maximise these opportunities in your business and
with your trading partners.
An introduction to the SA Trade
Trade Intelligence plays a fundamental role in attracting, educating and inspiring industry talent with this intensive 2-day
workshop for marketing and customer marketing graduates, new entrants and non-customer facing staff, providing indepth insight into Key Customers and the environment in which they operate.
Mycustomer 2.0 provides:
 An in-depth understanding of your customers, their trading operations, market positioning and strategic focus
areas.
 A clear and concise ‘situation-analysis’ which is key to drawing up annual account plans – “where each retailer is
at today and discussion regarding where it is going tomorrow”.
FOR MORE INFORMATION ABOUT THESE COURSES, contact Michelle Caskie on (031) 303 2803 or email
michelle@tradeintelligence.co.za
THE WEEKLY GURU
“Perfect numbers like perfect men are very rare.”
René Descartes
For further information:
Editorial:
Advertising Sales:
Trade Intelligence 2009
www.tradeintelligence.co.za │ info@tradeintelligence.co.za
Nick Paul: nick@tradeintelligence.co.za
Maryla Masojada: maryla@tradeintelligence.co.za
Katia Benedetti: katia@tradeintelligence.co.za
Annomi Kriel: annomi@tradeintelligence.co.za
Michelle Caskie: michelle@tradeintelligence.co.za