Retail news. August 2013 Zimbabwe internet mobile phone traffic tops sunday mail. Saturday, 21 July 2012 Business Editor

OK dominates as Zimbabwe's preferred retailer

By: Staff reporter

Zimbabwe's retail super-brand winner 2010, supermarket franchise Spar, and TM Supermarkets, the biggest supermarket by outlets, trailed rival OK Supermarkets as the most preferred outlet, with emerging Chinese-owned Afro-Foods Supermarkets taking the fourth spot.

This was revealed in the latest Zimbabwe All Media Products Survey (ZAMPS) for the fourth quarter of 2010 commissioned by the Zimbabwe Advertising Research Foundation (ZARF) to provide both media and product information to allow marketers to more effectively target and reach consumers.

Significant interest to various parties

The survey has however been of significant interest to political organisations, diplomats, the corporate sector and other stakeholders because of the diversity of information available from the survey.

OK Supermarkets, a unit of listed OK Zimbabwe currently splurging on massive refurbishment and stock hoarding after a US$20 million equity loans and rights issue that brought in South Africa-based Investec Africa Frontier Private Equity Fund as a new shareholder early last year, emerged top as the "most preferred outlet" among urbanites, followed by Spar (24%), TM Supermarkets (15%) and Afro-Foods (8%).

OK also dominated as the "most often outlet" with a 34% score, followed by TM Supermarkets and Spar Supermarkets with 18% each, the survey showed.

OK also led as the outlet where food and groceries are bought with a score of 71% followed by TM at 59% and Spar at 56%.

"(The) most preferred outlets in this quarter were OK, SPAR and TM," noted the survey authors, Research Bureau International.

TM has 51 supermarket outlets, against 49 outlets owned by OK Zimbabwe. However, only 35 outlets are under the OK brand, with five under the Bon Marche brand, three operating as OK Express stores and six as Pax Cash & Carry stores.

Spar, aggressively expanding

Spar, a South African franchise controlled by the Innscor Africa group in Zimbabwe, has been aggressively expanding since 2004 and now has over 50 outlets in Zimbabwe's northern region alone. The ability of Spar to take advantage of the buying power of its counterpart in South Africa has meant that it has been able to offer its members a wide range of imported products at reasonably affordable prices. Spar clinched the Marketers Association of Zimbabwe-run Superbrand 2010 retail sector award in December.

Afro-Foods, which emerged out of a decade-old economic crisis that ended in 2009, has also been growing significantly and late last year took over 12 town and country outlets owned by Zimbabwe Stock Exchange-listed CFI Holdings.

But the survey showed that the majority of Zimbabwe's urbanites preferred buying meat from butcheries (77%), with 8% preferring Spar, 5% preferring OK and 2% preferring TM Supermarkets.

Open markets were the preferred outlets for the purchase of fruits and vegetables (63%), with informal traders or hawkers commanding an 11% share of this market and fruit and vegetable shops in high density suburbs getting a 6% slice of the market. Spar led its rivals in this market with a 6% share with OK and TM getting 2% of the market apiece.

[21 Feb 2011 09:48]

Companiesandmarkets.com [8 March 2011]

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  Zimbabwe Food and Drink Report 2011
  

Company Profiles A to Z

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Zimbabwe Food and Drink Report 2011 - Following years of dismal news from Zimbabwe's food and drink sector, things appeared to be looking up in 2010. Over the past decade the Zimbabwean economy shed more than half its value, as ten successive years of heavy contraction between 1999 and 2008 decimated its fast-moving consumer goods (FMCG) industry and shattered its investment appeal. Coming off a strong 2009, Zimbabwe's food and drink industry had finally started to turn the corner. In 2010 the degree of stability provided by the functional unity government and the ongoing consumer spending kick provided by the overdue dropping of the Zimbabwean dollar in 2009 continued to play out. Demand for both basic and nonessential food and drink products continued to increase, which allowed producers to continue raising production capacity. With GDP growth expected to average an explosive 7.2% between 2010 and 2015 (what we see as being the first phase of the recovery), the food and drink industry is expected to leverage off the sharp economic gains with significant growth in consumption anticipated.

Key Company Trends

Signs of Recovery In Drinks Sector – Throughout 2010 there were many signs that the Zimbabwean drinks sector could be recovering. In a real show of confidence in the re-emerging Zimbabwean consumer market, in May 2010 SABMiller's beer and soft drinks partner Delta Corporation announced its plans to invest US$112mn in the country over the next two years, with capital expenditure going mostly towards capacity strengthening. With so much slack left in the economy – Delta is believed to be operating at just 65% of full capacity – there is plenty of scope for growth.

South African Retailers Make Cautious Moves – South Africa's leading retailers have been looking at investment possibilities in the Zimbabwean market as they look to cut down reliance on their domestic market and establish themselves in the region in order to capitalize on strong expected growth. However, at the end of 2010 South Africa's leading retailers were sending out mixed signals about Zimbabwe.

Shoprite was taking stock while Pick 'n' Pay, eager to strengthen its exposure to wider Africa, is due to bump up its stake in the domestic retailer TM to 49% from 25%. Meanwhile, Massmart has thrown its hat out of the ring, at least for now, after selling its Zimbabwean business to OK Zimbabwe.

Fast Food Taking Off? – In a further sign that things may be improving for both the food sector and the greater business environment, in September 2010 multinational fast-food chain McDonald's announced that it is planning to venture into the Zimbabwean market. The company's earlier attempt to enter the market in 1999 failed as a result of growing political and economic instability. Meanwhile, in September 2010 Innscor, a food services and retail firm, announced that it expects its annual sales to grow by about 25% to roughly US$500mn in the year to June 2011. Particularly strong in food services, Innscor operates a wide array of fast-food stores in Zimbabwe and the wider Southern and East Africa regions, and is the Zimbabwean franchisee for South Africa-based Nandos and Steers.

Key Risks to Outlook

Risks To Economy Manifold – Should the election process or the political climate deteriorate significantly, economic activity would be negatively impacted despite companies' current plans to charge ahead with investments. Additionally, if the clarifications over the indigenisation drive result in more punitive (to foreigners) legislation than we currently anticipate, this would have ramifications across the economy and in the mining sector in particular.

Exchange Rate Fluctuations – The country's dependence on imports also makes price growth vulnerable to exchange rate movements. Although officially operating under a multi-currency regime, the majority of transactions are conducted in US dollars, while most imports come from South Africa. This being the case, any significant rand appreciation versus the US dollar would

Pick n Pay online shoppers can use PayU. 25 Jul 2012

Enhancing the convenience for Pick n Pay's new online store is online payment service provider, PayU. The payment method is available in all South African regions and is a convenient, fast and safe way to pay for purchases made on the online store. It allows customers to store multiple credit card details for future purchases and speed through checkout. It is free to use with no sign up, monthly or transaction fees.

"As a payment method, it enables secure transactions online. With the increase in registered users, it is evident that the South African public is recognising that we are making their online shopping experience much faster and convenient," says Mark Chirnside, CEO of PayU. "To use, a consumer merely needs to link his or her various cards and look out for the logo when paying online."

Mike Cotterell, head of online shopping at Pick n Pay said, "The partnership contributes to giving our customers a wider range of payment options for their online shopping. We are constantly seeking ways to make our online shopping experience the best it can be and customers can now use their smart shopper points against their online spend."

Chirnside concludes, "Our aim with the various products, such as the branded wallet, is to enhance and guarantee payment security while providing a more convenient, hassle-free online shopping experience for our users. This consumer confidence will play an integral role in the current rise of the Internet economy, which has proven to be a key component of the South African economy."

Owned by Naspers, the company's products include a digital wallet for consumers and a PCI DSS level 1 certified payment gateway for businesses.

Top retailers, unions to inspect Bangladesh factories

8 Jul 2013

DHAKA, Bangladesh: Seventy top retailers have pledged to improve worker safety and allow inspection of all of their garment factories in Bangladesh within nine months under a pact signed with unions after a deadly factory collapse, a statement said today.

Repairs and renovations resulting from the inspections will also be carried out, the retailers pledged as part of the legally binding agreement signed in the wake of the April collapse of the Rana Plaza complex, which killed 1,129 people.

"Initial inspections at every factory will be completed at the latest within nine months, and plans for renovations and repairs put in place where necessary," a statement from the pact's steering committee said.

Western retailers, including Carrefour, Primark and Tesco, started signing up to the Accord on Fire and Building Safety in May to improve shocking factory conditions in Bangladesh, the world's second biggest apparel maker, with clothing accounting for 80% of its exports.

A headquarters to oversee implementation of the pact will be set up in the Netherlands and inspectors will aim to "identify grave hazards and the need for urgent repairs," according to the statement, giving details of the pact.

The deal requires top retailers to underwrite renovations and make a two-year commitment to the factories where renovations will be undertaken.

Labour umbrella groups, including Swiss-based IndustriALL, stepped up pressure on retailers to sign the agreement after the nine-storey building crumbled on April 24, causing one of the world's worst industrial disasters.

"Our mission is clear: to ensure the safety of all workers in the Bangladesh garment industry," said Jyrki Raina, general secretary of IndustriALL.

The task of inspecting and improving factories could prove hugely daunting.

A survey by a prestigious Dhaka-based engineering university last week found nine out of ten Bangladeshi garment plants are risky structures, and many were built without qualified engineers.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which represents 4,500 garment factories, initially welcomed the accord, saying it reflected the retailers' long term commitment to the country.

But in recent weeks manufacturers have criticised the organisers, saying the BGMEA should have been brought on board.

"They should have definitely included the BGMEA and the knitwear manufacturers in the accord and its decision-making bodies. After all, it's our factories they are going to inspect," BGMEA vice-president Reaz-Bin-Mahmood told AFP.

Scott Nova, head of the US-based Worker Rights Consortium, told AFP the BGMEA was not included because "this agreement is focused on the responsibility of the brands to ensure that factories are made safe".

While leading European retailers have joined the agreement, American brands such as Walmart and Gap have snubbed the accord and opted for self-regulation.

Walmart, the world's largest retailer and one of Dhaka's top buyers, has promised to inspect its Bangladeshi suppliers and publish the results, while Gap says it launched its own drive last October.

Source: AFP, via I-Net Bridge



South African fast-food giants make strides in UK

By: Zeenat Moorad

5 Jul 2013 SA's quick-service restaurant groups are seeing an improvement in the UK market‚ where trading over the past few years has been difficult as rising labour costs and depressed consumer spending weighed on operations.

Famous Brands this week opened its maiden Steers outlet in Clapham‚ London. The group already operates in the UK through Wimpy.

"The timing has never been better for Steers‚" Famous Brands CE Kevin Hedderwick said recently.

"We've been in the UK for a while and it's been tough‚ but we've opened two Wimpys in the past couple of months and we want to open a few more this year.

"For us‚ the UK is looking a bit more optimistic than it has for a long time."

Spur Corporation posted a 26.7% rise in its international revenue for the six months ended December 31 2012‚ to R91.1m‚ reflecting an improving trading performance in the UK as well as Africa.

"Spur bucked the trend in the depressed UK restaurant economy and posted a pleasing growth in turnover‚" the group said in March.

According to Hedderwick‚ Famous Brands‚ whose portfolio also includes Debonairs and Mugg & Bean‚ had always considered exporting Steers to the UK. This had been "fuelled by the constant requests from many expatriates living in London craving a taste of home".

In 2012 research company IBISWorld forecast that takeaway and fast-food industry growth would lift slowly‚ in line with the broader UK economy.

Newcomer would face challenges from established brands

"Early on‚ growth will be held back as austerity measures‚ high unemployment and ongoing concern over the European debt situation continue to foster a climate of uncertainty. Some industry operators should still benefit as some consumers trade down to take-away from more expensive dining options‚" the company said in a report.

Vunani Securities analyst Anthony Clark said this week that even though Steers was well known in SA for being a fairly reasonably priced but quality product‚ in the UK it would be competing against other brands which were far better established.

"It's a bit like Burger King coming into SA - it's going to take them a great deal of time to actually establish a brand presence and brand recognition amongst consumers to cover the initial investment‚" Clark said.

"I think the same will be true of Steers going into the UK. The cost of operating in the UK is also significantly higher."

The burger brand‚ which was launched in the 1960s‚ has 505 restaurants in SA and 43 additional locations across Africa.

Focus on takeaways

According to Famous Brands‚ the restaurant in the UK will focus mainly on a takeaway offering.

"Spur opened in the UK and they had a sit-down format and this type of format in the UK was a complete and utter‚ unmitigated disaster because of the cost structure of the business. I think a fast-food franchise will work better‚" Clark said.

Famous Brands' UK menu is based on the South African menu‚ with the addition of Steers flame-grilled peri-peri chicken.

"Granted‚ Famous Brands has deep pockets‚ but the market is competitive and it might be a challenge for them‚" Clark said.

"Not an insurmountable one‚ though‚ because Nando's did it - although they came into the market with a differentiated product: basted chicken‚ unlike KFC's coated chicken.

"Famous Brands have done it so well in SA but in the UK a burger is a burger is a burger‚" he said.

"I don't think it's going to be an automatic shoo-in for them. I would hate to see them burn their buns."

Shoprite holds market edge through convenience, pricing. 3 Jul 2012

Shoprite's dominance in the grocery market looks set to continue for the foreseeable future, according to new research released yesterday, 2 July 2012, by TNS.

The Commitment Economy, an independent global survey of over 39 000 people in 17 markets, reveals that competitive pricing and the convenient location of Shoprite's 1 520 stores are giving it the edge over its competitors, despite the fact that rival brands are more highly regarded in the minds of people.

The researcher's unique modelling exercise found that 12% of Shoprite's market share (equivalent to R28 billion) comes from people who actually feel ambivalent about the brand, but who shop there for practical reasons. These shoppers would go elsewhere if alternatives were closer to home or more affordable. However, competitors are not currently in a position to challenge it on either count in the near future.

Neil Higgs of TNS South Africa, said, "For most market leaders a lower brand loyalty would be a cause for concern, but its position is so firmly entrenched that it would take a significant effort for any competition to make a serious dent in this market giant's armour. However, it would be wise not to be complacent. We are detecting real demand out there for alternatives and smaller players who can meet that demand do stand to make significant gains."

Growth potential

The study points to valuable growth opportunities for smaller retailers such as Woolworths and Fruit & Veg City/Food Lovers Market, which are more warmly regarded by South African shoppers. It found that if consumers were able to act on preference alone, Fruit & Veg City would double its market share from 3% to 6% (equivalent to R7 billion), whilst Woolworths could triple its share. In addition, Pick n Pay Hypermarket could double its market share.

However, affordability and location emerged as the main barriers preventing shoppers switching retailer, especially for these three outlets, suggesting that whilst premium grocers may not be able to compete on price, they could punch above their weight by focusing on convenience. The extent to which these retailers can capitalise on the potential opportunity depends on their ability to remove or reduce these barriers. Higgs added that, in the 2011 Times/Sowetan Top Retailer survey, also conducted by TNS, Woolworths had indeed already made significant upward progress in the scores.

The research estimates that Fruit & Veg City/Food Lovers Market, which recently launched its Freshstop outlets in partnership with Caltex, could generate almost half of the potential R7 billion of additional business available, by simply choosing sites close to other large retailers and locating express stores in urban, high traffic areas.

The survey showed that Pick n Pay is in a similar situation to Shoprite, with lower levels of customer commitment relative to the chain's market share. The figures suggest that up to R12.7 billion of Pick n Pay's revenue may come from shoppers who are more swayed by practicality than brand loyalty.

Interestingly Pick n Pay Hypermarket is seen more favourably than its supermarket offering but the location of these outlets mean that the warmth felt towards them by people in South Africa is unlikely to translate into growth in the near future.

Jan Hofmeyr, chief researcher, behaviour change, at TNS said, "As people are confronted with more choice, retailers should be asking themselves whether footfall is backed up by real commitment to the brand. People may continue to part with their money for reasons beyond their control, but the minute more attractive options are available they are likely to switch. This makes them an easy target for competitors looking to steal market share."
Biggest opportunities

TNS has calculated which retail chains have the greatest growth opportunity in total market share terms.

Ranking (Top 5)	Monetary value attached to opportunity (in billions of Rand)
Woolworths	13.6
Pick n Pay Hypermarket	12.3
Fruit and Veg City/Food Lovers Market	7.0
Makro	6.1
Game/Foodco	5.4

There was an old lady who swallowed a horse...

By: Chris Charter. 8 Mar 2013

Consumers have been encouraged by the acting Consumer Commissioner to "seek redress" under the Consumer Protection Act (CPA) concerning the content of their meat products. Certainly the CPA is concerned with what suppliers put in their products, as well as how they describe them - but consumers looking for a payday will be most likely be disappointed.

As a general proposition, the CPA outlaws false, misleading or deceptive representations. In terms of section 41 of the CPA, a supplier (which in this context would include a retailer as well as manufacturers and producers) must not express or imply a false, misleading or deceptive representation concerning a material fact to a consumer.

To mislead most likely requires some deliberate act of falsehood, so a retailer that markets a product in good faith, without knowledge or reasonable suspicion that it may be something other than what it purports to be is probably not misleading the consumer. However, the meat supplier is being misleading if he fails to disclose the marsupial content of his meat products. Furthermore, now that retailers are on warning that their products are not always what they seem, there is arguably a positive obligation to correct an apparent misapprehension on the part of the consumer.

Although section 52 of the CPA does allow a court to make certain orders regarding transactions concluded as a result of false or misleading representations, this is limited in scope to requiring a supplier to cease such practice and at best for the consumer, a refund of the price paid for the offending product.

Section 76 contains a more general power of the courts to enforce consumer rights. This may include ordering a supplier to alter conduct inconsistent with the CPA so that manufacturers and retailers may be directed to take positive steps to ensure that meat is properly labelled as to the ingredients. Although the courts have the power to award damages (to individuals or classes of consumers), there is little prospect of consumers being awarded damages for any alleged emotional trauma as a result of inadvertent equine dining - however hard that is to swallow.

The situation changes if damage is caused

The situation is of course different if damage is caused as a result - in which case consumers can seek redress under section 61 (liability for damage caused by goods). However, reports are that the products sold are safe for consumption.

The CPA caters more specifically for product labelling at section 24, which provides that a person must not "knowingly apply to any goods a trade description that is likely to mislead the consumer as to any matter implied or expressed in that trade description."

A trade description includes any indication of the ingredients of which any goods consist. This requirement applies to manufacturers as well as retailers. Retailers have the added duty to not offer goods where the retailer knows, or has reason to suspect, that a trade description is likely to be misleading. Prior to the widespread media reports, a retailer may have been able to allege that he did not know that the goods were mislabelled - but now a retailer is probably required to take reasonable steps to ensure that labels are accurate.