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

Pick n Pay, BP to roll-out small-format stores

By: Zeenat Moorad

23 Apr 2012 14:21Submit a commentBizLike

Retailer Pick n Pay and BP Southern Africa have formally combined forces which will see the roll out of small-format Pick n Pay stores located at BP service stations in the major metropolitan areas across SA, the companies said on Monday, 23 April 2012. PnP Express stores stock between 1,500 and 2,500 product lines and stay open 24/7, catering to the convenience retail market.

The two companies initially signed a memorandum of understanding in July 2008 and have been testing the model since opening the first two PnP Express stores in Hout Bay and Tokai in the Western Cape at the end of the same year.

There are currently nine Pick n Pay Express stores on BP forecourts in SA.

"The initial plan is for 120 BP Express stores to be converted to PnP Express stores over the next five years, although additional stores may also be converted after the initial five-year period," Pick n Pay said. The roll out will concentrate on BP sites which are most suitably located for Pick n Pay's customers.

Both companies said they were confident that the dual format brought multiple benefits to the two companies, their franchisees, suppliers, and more particularly to South African customers who were in search of efficient and affordable convenience retailing.

"We've tested the format over the past three years and the feedback from customers is very positive," Pick n Pay's Deputy CEO Richard van Rensburg said.

International experience suggests that small format stores often spur growth and most leading global retailers have a multi-channel presence, including forecourt outlets.

The agreement brings into play key strengths of both businesses, and enables Pick n Pay to expand its small store format while continuing to create new entrepreneurs, in line with its franchise strategy.

Gerard Derbesy, BP Southern Africa CEO said the offering was in line with BPSA's growth and investment plans over the next two years.

According to the companies, the agreement paved the way for significant enterprise development through the development of new and existing franchisees and will add value to B-BBEE (broad-based black economic empowerment).

Chris Reed, franchise director at Pick n Pay, said express stores were small format franchise stores, which, while on BP forecourts, were instantly recognisable as Pick n Pay stores.

"Trading floor sizes are small and typically vary between 150 square metres and 250 square metres," he said.

Pick ‘n Pay to inject US$21m into TM: HERALD.

Monday, 17 October 2011 00:00

Golden Sibanda Senior Business Reporter PICK ‘n Pay can now inject US$21 million to recapitalise TM Supermarkets after Government approved the South African retailer's proposal to raise its stake in TM Supermarkets from 25 percent to about 49 percent. Former chief executive Mr Brendan Beaumont early this year said the retail chain required US$10 million for capital projects and US$11 million for working capital. After injecting fresh capital in TM, the SA retailer will announce its increased presence by rebranding selected TM outlets as Pick ‘n Pay. Since dollarisation, the local retail giant has struggled to stock adequately while its refrigeration equipment required replacement or rehabilitation. Despite managing to maintain a significant portion of the retail market, TM Supermarkets has faced stiff competition from other players. But all this could be ended after the Ministry of Youth Development, Indigenisation and Empowered approved its proposal to up its stake. Indigenisation Minister Saviour Kasukuwere confirmed the Meikles-Pick ‘n Pay transaction last Friday, adding that fresh capital injection into TM Supermarkets would bring healthy competition. "They wanted to increase their investment in TM to 49 percent," said the minister. "They had about 25 percent and further investment will get them to 49 percent or thereabouts. They will inject capital for rehabilitation of equipment and working capital, which will lead to enhanced supply." He said the ultimate winner would be the consumer, as they "will be able to get better service and prices from the retailer". TM had been desperate to recapitalise after suffering a 2,4 percent shrinkage in 2009 due to serious capital and working capital constraints. Mr Beaumont had said TM had "point-of-sale technology in only six of its 53 branches and this is a key issue in shrinkage and management of selling prices". This had resulted in the retail giant losing its pace among the country's leading retailers with the former CEO putting it at number three after OK and Spar. For well-recapitalised and managed retail businesses Zimbabwe offers good returns, as shown by increased interest in the sector by SA retailers. At one point South Africa's biggest retail chain showed interest in acquiring a stake in OK Zimbabwe, but for unexplained reasons pulled out. Zimbabwe makes for a good retail investment, considering incomes are still low as the economy is yet to recover from a decade of instability. Disposable incomes have largely remained low since February 2009.

 

Parliament urged to pass consumer law

Tuesday, 02 April 2013

Rosemary Siyachitema The Consumer Council of Zimbabwe last week petitioned Parliament to pass a consumer protection law which it said was long overdue. The CCZ has since 2010 been lobbying Government to enact the Consumer Protection Act. Consumer protection laws were designed under United Nations guidelines to shield consumers against injustice and abuse. Handing over the petition to Parliament, CCZ executive director Rosemary Siyachitema said existing consumer laws were weak and unclear. “We are demanding that the Government approves the Consumer Protection Law into a Parliamentary Act because consumers are suffering under the weak consumer laws such as Small Claims Act and Consumer Contract Act,” she said. Mrs Siyachitema said there was no reason for government to continue delaying enactment of the law. “CCZ is now calling for the government to fast track the placement of this law into process since we signed for human rights under UN guidelines and the majority has accepted the new constitution which also addresses the issue of consumer rights comprehensively,” she said. Receiving the petition, deputy clerk of Parliament, Mr Kennedy Chokuda said he hoped the issue will receive urgent attention. - New Ziana.

Top of Form

New owners for Toys R Us and Reggie's. 4 Dec 2012

Toy and baby retailer Redgwoods (Pty) Limited, owners of Toys R Us and Reggie's stores, has been sold to Durban-based businessmen Christian Larsen and Mohsin Mia. The company was sold as a going concern by Maurice Sacher and Issy Zimmerman who each owned 50% of the business. The sale, for an undisclosed amount, was concluded after five months of negotiations. The new owners take over a business consisting of 65 stores countrywide as well as Reggie's and Toys R Us online stores.

"We have built a very successful business which is profitable but we feel it is time for us to enter a new phase in our lives and pursue other interests. There are no immediate changes forecast for staff or systems," says Zimmerman.

He said Mia and Larsen are a perfect match for the business with strengths in logistics, sourcing and licensing, having been in the wholesaling of toys and baby products for nearly 13 years. They were the largest local supplier to Redgwoods in 2011. They have however on-sold their wholesale toy and baby business to a German toy manufacturer who is seeking a foothold into Africa.

"They will add tremendous value to the supply chain and further enhance profitability of the Toys R Us and Reggie's brands."

Zimmerman said the transaction has been approved by South Africa's competition regulators and brand owners Toys R Us International.

The new owners envisage an aggressive store roll-out into Africa and a revamp of the store formats including the introduction of smaller versions for convenience.

The effective ownership and control was officially passed onto the new owners on 1 December 2012.

New mall for Jouberton, NW province

14 Mar 2012

Jouberton, which adjoins Klerksdorp, a major North West province mining area, will see the Goldfields Mall open in the second quarter of 2013. Construction begins in May 2012 on the new 15 000 sqm shopping centre at the intersection of the N12 and Jabulani Street. The new shopping centre will be the first modern shopping centre in Jouberton and will include 500 parking bays. The Southern Taxi Council, as the umbrella body representing the local taxi associations, has purpose-designed the fully-fledged taxi facility for 30 taxis and has lent its support to this project.

Rob Terry, development manager for Landmark Real Estate, property developers of the new shopping centre, says more and more retailers with vision are offering their brands in South Africa's townships. "Combined with the adjacent suburbs of Manzil Park and Alabama, the historically black township of Jouberton has the highest density of residents in the region. The reasons for this trend toward township retail development are self-evident and revolve mainly around expediency and price.

"For its 200 000 residents, the new shopping centre will eliminate the need for a 25 km round trip to Klerksdorp by taxi in order to purchase necessities, a few luxuries or enjoy a meal out. This will be a modern and attractive mall with landscape features and amenities that will provide the area with a central hub, not only for shopping but also as a social meeting place - something which is entirely lacking outside the churches and schools in the area."

Multiple retail investments in area

Terry says that in recent months there have been a number of major retail investment announcements in such previously disadvantaged areas by companies such as Old Mutual, Vukile, Advent Asset Management, Dipula and the PIC (Public Investment Corporation), among others, indicating investor confidence in this important retail sector.

"Retailers active in this arena are reporting significantly higher growth compared with so-called traditional retailing nodes. Fortress Property Fund, which has good exposure to low income commuter-type retail centres, recently reported impressive growth of 10 percent in distributions over the previous year, clearly confirming this higher performance," he says.

House price reports by FNB in recent years add further weight to the indication of increasing stability and growth in these areas, with the average urban township home now worth over R250 000 and growing at in excess of 10% per annum. This outperforms the just 3.8% average growth in house prices in the six major metro regions as a whole.

Letting forges ahead

"Currently the centre is approximately 85% pre-let to national tenants. Shoprite is the anchor tenant trading from a 3 500 sqm store, complemented by Hyper Butchery and Nizams. Meanwhile PEP and Jet will head up the fashion offering and Cashbuild, the DIY component. Eateries include KFC, Traditional Fish 'n Chips and several other national franchises, while furniture outlets include OK Furniture, Lewis and Fairprice. A Post Office branch enhances the service mix. Because of its size and expansion potential, this centre should remain the dominant retail offering in the area for the foreseeable future," concludes Terry.

Landmark's executive director, Lionel Kisten, adds, "It is noteworthy that there is commitment in the centre from the national fashion sector beyond Jet and PEP. It seems that astute retailers have recognised that fashion should be offered at the brand conscious consumers' doorstep. PEP pioneered fashion retail in black townships, a factor that contributed to its success as South Africa's largest fashion outlet. In recent years, Jet has followed a similar strategy and is a serious player in this market. It's encouraging to now see other retailers recognising the business potential offered in these areas."

To date banking services in the new centre are to be provided by FNB Easy-Bank and Standard Bank and Landmark reports that negotiations are ongoing with the other banks.

New food-labelling law 'will deprive consumers'

15 Oct 2012 15:40Submit a commentBizLike

Experts say consumers could lose out on valuable product information because food labelling legislation has made the publication of nutritional information on packaging much more complex and costly. To print a nutrition table with a breakdown of how much fat, salt or carbohydrates are in the food, manufacturers now have to do intensive and costly testing of the food every three years.

Previously, manufacturers would estimate the nutritional data from the ingredients. They are now forbidden to do this. So, since offering nutritional information is voluntary, many will simply remove it from their labels.

Nicky Edwards, product developer for Ina Paarman Foods, explained the process: "Nutritional information in the absence of a product claim is not required.

"The reality is that many manufacturers will simply no longer include nutritional information on their product labels because of the cost and renewal every 36 months, which is ultimately to the disadvantage of the consumer."

Food consultant Norah-Ann Hayes agreed.

"The drawback of requiring testing for many products is that companies are not going to declare the nutrition information, especially smaller manufacturers.

"In addition to the lab testing, this needs to be done every three years, so the cost is not a once-off."

But Hayes said the law was necessary. "This is unfortunate but the previous method of calculating nutritional information was not accurate." Hayes said consumers who wanted to know how healthy the product was and the quantities of sugar, salt and carbohydrates could check the ingredients list.

"If fat or sugar are near the top of the ingredients list it is going to be a high-kilojoule product. If salt is high up it is going to be a high-sodium product."

Under the food labelling law, products cannot contain the word "natural". This means that products that use natural flavours instead of synthetics cannot indicate this to the consumer on the packaging.

Source: The Times



Payments 'will switch from cards to mobile phones'. 26 Jul 2012

The use of debit and credit cards would reduce over time as more consumers used cellphones to make payments using new technology that eliminated the need to swipe a card, Deloitte said on Wednesday, 25 July 2012.

"It is obviously farfetched to think that the use of debt and credit cards will be completely eliminated, but a time will come when you open a bank account, you will be asked to choose between having a card or a phone (as a means) to pay," said Jonathan Houston, digital marketing lead executive in the Deloitte consulting technology division.

Houston said the rapid convergence of mobile and banking technology which started with such simple functions as money transfer was increasingly making the cellphone a virtual bank in itself.

Bankers say SA's high mobile penetration rate made it the perfect market to launch banking technology and products using cellphone to reach an under-banked and unbanked population estimated at more than 11-million.

One such technology was Near Field Communications (NFC), which provided the ability to carry out banking transactions with a simple swipe of a cellphone, said Houston. The other was the MXit cellphone-based geo payment system called Gust, which was launched in May.

These rival technologies were beginning to compete to make cellphones the next passport to making transactions, said Houston, adding this could result in the retail payment systems becoming redundant, with bank-issued cards being made obsolete.

"Essentially the difference between the two is that with NFC, a mobile phone has to be enabled with an NFC chip and mated with an NFC reader to facilitate payments. The paying party, however, does not require a credit card to make a payment (but) only a bank account that has eWallet functionality," he said.

Michael Jordaan, the CEO of First National Bank, said cashless payments would become the norm over time.

In May, FNB launched a person-to-person payment option called Geo Payments, using its banking app which allows users within close range of each other to make payments to one another without using their bank account details.

"We see our Geo Payment solution being used more frequently as banking app penetration grows," said Jordaan.

He said that there was an increasing convergence of financial services and mobile technology, and the latest mobile handsets would allow banks to launch a raft of mobile payment solutions.

"It is important (however) to differentiate between NFC as an eco system and Geo Payments in its current form as a person-to-person payment solution.

"NFC has a number of shortcomings before mainstream application whereas the Geo Payment solution is here and (is already working) for FNB and non-FNB clients," said Jordaan.

Source: Business Day



McDonald's SA looking to double revenue in four years. By: Annaleigh Vallie. 19 Jun 2012

McDonald's SA is on track to double revenue in the next four years and still plans to open about 25 restaurants a year despite tough trading conditions‚ MD Greg Solomon said on Monday, 18 June 2012.

"It has been a tough environment since the soccer world cup but we should see some improvement by quarter one next year‚" he said.

Solomon said consumers had been downtrading as they began to feel the pinch of rising costs but the company has also managed to garner the support of new customers from competitors with more expensive offerings.

The company currently has about 163 restaurants‚ he said‚ but hopes to speed up growth in the next year. "We do not trade in many areas‚ there is place to grow in parts of the North West province and KwaZulu-Natal as well as the North Western Cape‚" he said.

McDonald's SA still had a beady eye on expansion into Africa‚ he said. "We have to learn how to eat off our own plate first‚" he said‚ adding that SA was a priority. "We will not be the first to go into Africa but we will be bold‚ when we eventually do."

Businessman Cyril Ramaphosa's company‚ Shanduka‚ acquired the 20-year master franchise last year to run all McDonald's restaurants in SA‚ it has a combination of franchise and corporate-owned stores.

Yum! the owners of KFC in SA said they would be bringing their Pizza Hut franchise to the country "soon" and Burger King may also grace local shores in the short term‚ the US-chain said last year.

"Threats are always there‚ but it also says someone else sees opportunity here in this market‚" Solomon said.

Yum! is considered the world's largest fast-food restaurant company with about 38‚000 restaurants in more than 110 countries. The company's turnover in SA was about R8bn last year.

Local players Famous Brands earlier this year said it was on the lookout for acquisitions and would look into new market segments including "evening casual dining" within the next few months. Famous Brands plans to open about 250 new stores in the coming year‚ 48 of these stores would be outside SA. It reported group revenue and operating profit growth of 15%‚ to R2.16bn and R413m respectively.

One of the smaller players in the market‚ Taste Holdings said it would open about 50 Fish & Chip Co restaurants in the next six months as competition in the fast food market and particularly the lower end of the market intensifies.

McDonald's CEO Skinner to step down. 22 Mar 2012

NEW YORK, USA: McDonald's Chief Executive Officer Jim Skinner will retire in June, after 41 years at the US fast food giant, to be replaced by Chief Operating Officer Don Thompson, the company said.

Skinner, 67, has served at the helm of the company since November 2004 and was one of the architects of the "Plan to Win" strategy that has guided it since 2003, McDonald's said in a statement.

"Jim's stellar leadership has driven unprecedented momentum at McDonald's," said Andy McKenna, chairman of the company's board of directors, in a statement Wednesday.

"Total shareholder return was 21% during Jim's tenure as CEO, and market capitalization surpassed $100 billion for the first time in the company's history," he added.

The "Plan to Win" saw the company retool its global restaurants and adjust its menu to offer healthier options for an increasingly fitness-conscious public.

Thompson, 48, is a 22-year veteran at McDonald's and became president and COO in January 2010. He has since directed global strategy and operations for the company's more than 33,000 restaurants in 119 countries.

The fast food behemoth serves 68 million worldwide customers a day.

McDonald's praised for crate-free pork pledge. 14 Feb 2012

WASHINGTON, USA: The American Humane Association, a 135-year-old animal welfare group, has praised the fast food giant McDonald's for pledging not to serve pork raised in tiny crates.

"Millions of pigs spend their lives in crates that are inhumanely small and do not allow them to move freely and express their natural behaviors," American Humane Association President and CEO Robin Ganzert said.

"This leadership on the part of McDonald's will not only advance the welfare of millions of animals but will most likely encourage other food service providers and retailers to follow suit."

The group added, however, that "the adoption of loose housing systems for sows requires not only new equipment but also training of workers and managers to handle animals humanely."

Last November, McDonald's severed ties with one of its American egg suppliers after a video taken by undercover animal rights activists exposed shocking cruelty to chickens at a farm.

McDonald's operates more than 33 000 restaurants in 119 countries, and serves nearly 68 million people per day.