Retail news. Semester 1 of 2014 table of contents

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."