Retail news. Semester 1 of 2014 table of contents

Bread sales decline, bakeries need to adapt. By: Judy Laidlaw | 23 Jan 2014

According to research by Mintel, bread consumption in France has declined by 10% over the past 10 years; Italy has seen a decrease from 200g to 80g per capita over the same time and the UK has seen a decline of 2% year-on-year.

There are numerous reasons for this decline. Consumers' fast-paced lifestyles leave them with little time to shop; they have less income due to the effects of the global recession; many are on bread-free diets; there is a decline in breakfast eating; and smaller households that do not need such large quantities of bread are becoming the norm.

This means bakeries need to adapt to market conditions and adapt to their consumers' new consumption patterns if they are to survive.

Today's consumers are enjoying on-the-go snacking products, ethnic and exotic breads and homemade quality goods. There has also been a large move towards gluten and wheat free options which bakeries need to add to their shelves.

Consumers are looking for around the clock options that they can pick up at a time that suits their daily routine, which is why there is a boom in in-store bakeries in the US and even in South Africa.

US bakery in-store sales reached an all-time high in 2012, with sales growing 5.6% to $12.8 billion. The number of in-store bakeries grew by 14%, from 24,400 (2007) to 27,900 (2012). This is phenomenal growth when compared to the package bread segment, which saw less than 1% growth in 2012.

Some retailers are taking in-store bakeries to the next level by creating a traditional bakery feel within the store, whilst others are ensuring the convenience that consumers need by coming up with all kinds of new ideas - even a cupcake vending machine.

South African bakeries need to adapt or die.

Burger King to open Gauteng stores in February. By: Zeenat Moorad | 17 Jan 2014

Burger King will open the doors of its first stores in Gauteng in February.

Local gaming and leisure group Grand Parade‚ through its subsidiary Utish Investments‚ holds the master franchise agreement to expand Burger King in SA.

The move is part of Burger King's plans to expand into high-growth emerging markets.

Three stores will be opened on one day in Gauteng‚ at 60 Rivonia Road‚ at North Station Food Court, Park Station‚ and at the Sasol Circle Centre at the corner of the R55 and Theron Street in Centurion.

Burger King SA's chief execuitive Jaye Sinclair said this was in line with the company's expansion strategy within southern Africa.

"We have seen overwhelming success since entering the local market and are confident that our offering will be well received‚" he said.

Fast-food operators in SA have benefited from the cash-rich and time-poor phenomenon‚ where rising affluence among the country's middle-class has led to greater use of quick-service dining over formal sit-down restaurants and preparing food at home.

Burger King's presence will heat up competition in an already fierce environment where established companies such as Steers and Wimpy‚ owned by Famous Brands and US giant McDonald's have been pushing aggressive promotions to attract customers.

Burger King will use SA as a platform to expand into fast-growing African countries. Its local licence agreement includes countries such as Namibia‚ Botswana‚ Zambia‚ Zimbabwe‚ Mozambique and Mauritius.

Burger King SA in July last year signed a deal with Sasol that will see an undisclosed number of its sit-down‚ takeaway and drive-through restaurants open on petrol-station forecourts.

According to BMi Research‚ forecourt retailing is an ultra-competitive channel‚ with the economic environment and changing retail landscape significantly influencing where people shop and what they buy.

José Cil‚ president of Europe‚ Middle East and Africa for Burger King Worldwide‚ said the agreement with Sasol allowed the company to position its brand across new channels and expand its number of guests and restaurants in SA.

Guarding consumers' rights this Christmas. 13 Nov 2013

The Office of the Consumer Goods and Services Ombud (CGSO) is the consumer goods and services industry's Ombud scheme, set up in line with the Consumer Protection Act (CPA), to enforce the consumer goods and services industry Code of Conduct. This office will be essential over Christmas, as consumers discover that Christmas presents do not last a reasonable period.

The CGSO Ombudsman, Advocate Neville Melville says the CPA has ushered in a new era of consumer-centricity and imposes a built-in or automatic warranty (commonly known as a guarantee) on all goods sold.

"Under the CPA, goods must be reasonably suitable for the purposes for which they are intended, and must be of good quality, in good working order and free of any defects," he explains. "They must also be useable and durable for a reasonable period of time."

This act brings about a drastic change to the South African law, embodying a new right not recognised under the common law. "For the first time, the consumer has a right to continued good quality. "In the case of something like a television, fridge or a car, this might mean it should last for a number of years."

If the goods one has bought fail to comply with any of these requirements within six months of being delivered, one is entitled to return them, and ask for one of the three Rs - to have the item repaired, replaced or to get a full refund of the price paid. It is not clear from the CPA what your remedies are if the goods are not durable beyond six months. This is something that will need to be clarified by the National Consumer Tribunal or the courts.

"It's important to note that a supplier cannot force a consumer to choose to have the goods repaired, if the consumer prefers a refund or replacement. The consumer can insist on a cash refund instead of a store credit or vouchers or on a replacement with something similar at no additional cost."

The supplier may also not force the consumer to purchase a more expensive model or brand and must cover the costs of repairing, collecting or replacing the defective goods.

Exceptions to rule

As always, there are exceptions to the rules, and the rules around refunds do not apply if the consumer was specifically told that the particular goods were offered in a specific condition.

"If you're buying second hand goods, for example, keep this in mind."

The rules also don't apply if the goods were altered by the consumer contrary to the instructions or tampered with by the consumer.

"Remember that not every defect entitles a consumer to return goods for a refund or replacement. The defect must be material - or it could be an imperfection which renders the goods less useful."

The rules regarding refunds apply irrespective of the store's refund policy or the terms of the manufacturer's guarantee.

"In other words, the store's refund policy or the terms of the manufacturer's guarantee cannot override the CPA requirements, but they can go further than or offer more rights to the customer than the CPA does."

For example, a store may accept goods returned for a refund within a specific period and with their original packaging even if there is nothing wrong with them and the customer has merely changed their mind, although the CPA only requires a supplier to accept a return if there was something wrong with the goods.

Things retailers look out for before accepting goods for refund

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  Original packaging: In the case of a defect, the CPA does not require a consumer to return the goods in its original packaging in order to get a refund. The suppler may, however, insist upon the return of the goods in the original packaging if the goods are returned because consumers have merely changed their mind, there is nothing wrong with the goods and they are permitted to return the goods in line with the store's returns policy.
  
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  Till slips: While the CPA makes no specific reference to till slips, the high levels of crime in South Africa and the fact that the CPA implied warranty is only for six months are reasons justifying the requirement of the production of a till slip when exchanging an item. However, it's also up to suppliers to assist by keeping proper records.
  
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  Condition of the goods: The supplier is likely to consider whether the condition of an item suggests it is a recent purchase and may try to determine whether the customer could have caused the defect.
  

"If you have any queries about your legal rights as a consumer or wish to complain about a supplier, you can contact the CGSO for assistance. Each case is treated on its own merits, is independent and free of charge," he concludes.

For more information, go to www.cgso.org.za.