Retail news. Semester 1 of 2014 table of contents
Pick n Pay takes its brand to Zimbabwe. 12 Jun 2012
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- Bu səhifədəki naviqasiya:
- Pick n Pay opens first supermarket in Zimbabwe. 22 Jun 2012
- Private labels investing in quality, growth. 4 Jul 2012
Pick n Pay takes its brand to Zimbabwe. 12 Jun 2012Despite growing concerns over Zimbabwe's continuing 51% indigenisation programme that has ruffled the feathers of foreign investors, South African retail giant Pick n Pay is expanding in Zimbabwe, with plans to open a new supermarket in Harare at the end of the month. T Ozias Makamba, finance director at Meikles Africa, the Zimbabwe stock exchange-listed company that previously owned the majority 75% stake in TM supermarkets, said TM Pick n Pay would open at the end of the month and that it started refurbishments at TM Borrowdale that will be followed by TM Mutare, Masvingo and Gweru. The South African retailer's expansion in Zimbabwe began at the end of last year when the Competition and Tariff Commission gave the green light to Pick n Pay to increase its shareholding in TM supermarkets from 24% to 49%, in a deal that saw $15m injected into the supermarket chain. With 51 stores countrywide, TM supermarket controls almost a quarter of the groceries market. Its biggest competitor, OK Zimbabwe, has said it was ready to take on the new challenge posed by its South African-backed rival. But economic observers warned that Pick n Pay's expansion into Zimbabwe, brought on by the stabilisation of the country's economy in February 2009, would pose a further challenge to efforts to revive the local manufacturing industry. Tony Hawkins, an economics professor at the University of Zimbabwe, said Southern Africa had been turned into a huge supermarket of South African products. All the leading chains, Shoprite, Pick n Pay and Spar, are expanding northwards. "This is not great news for the local manufacturing industry at all." Earlier this year, Finance Minister Tendai Biti echoed the sentiments, saying that South African products accounted for more than 70% of grocery imports.
T "We are proud to be opening our first Pick n Pay at Kamfinsa‚" said Dallas Langman Director Group Enterprises Pick n Pay. As the anchor tenant of the centre - which has been rebuilt and refurbished by Pearl Properties - we've seen the transformation that has already taken place in the suburb of Greendale." The store comprises a Pick n Pay Supermarket‚ as well as stand-alone Pick n Pay Liquor and Clothing stores. "These will offer world-class merchandise to customers at the best possible prices‚" said Langman. Mark Vickery TM Chief Executive Officer said: "This development will offer a similar experience to our shoppers to that of any southern African Pick n Pay supermarket‚ it's a real 'taste' of what we have planned for Zimbabwe over the next two years." The PnP outlet is the anchor tenant‚ coupled with a collection of supporting services‚ in the refurbished shopping centre. PnP has provided operational support to TM Supermarket‚ through a skills development programme designed to equip the Zimbabwean local team with international best practice in a variety of retail disciplines that will ultimately result in a unique‚ new and fresh shopping experience for the customer. "The customer has always been at the centre of all we do‚ and we believe that our partnership will result in a productive sharing of ideas that will mean service delivery to the customer‚ comparable to anywhere in the world‚" Vickery added. A number of Pick n Pay branches will be opened‚ many of them at sites where TM Supermarkets have been operating. Langman said the supermarket would emphasise the "fresh" concept with a minimum of 40% of floor space being dedicated to fruit and vegetables‚ deli‚ and confectionary. "This is our response to the fact that people want to eat more healthily; and we will be offering an infusion of traditional health food‚ as we have seen high turnover in traditional lines of fresh food." The TM chain currently has 50 stores in Zimbabwe and the Kamfinsa Pick n Pay store will be the first in its strategy of offering the best brands to customers. Pick n Pay currently operates 17 stores in Namibia‚ 12 in Botswana‚ seven in Swaziland and one in Lesotho‚ together with the its first Zambian store. "We pledge that the shopping experience in all our Pick n Pay stores will be second to none‚ both in terms of store ambience and most importantly giving customers real and great value for their hard earned money". As at financial year end (February 2012) Pick n Pay operated 94 stores in Africa. 
Private labels investing in quality, growth. 4 Jul 2012Consumers seeking to save some money in tough economic times are fuelling the current growth in private label brands, forcing retailers to rethink how they promote their in-house and own-name brands. The conundrum is: do they increase the number of products they offer or only the perceived quality and value of the existing product line-up? Retailers are also starting to understand the power of knowing and controlling their own private label products and are becoming more agile in responding to the ever changing needs of the modern day consumer. Customers are giving retailers the permission to grow their private label brands by exercising their right of choice. They are telling the retailers what they want and the retailers are responding and, in the process, building brand loyalty and equity. However, the real question is: Will retailers grow private label brand value or simply add more private label products to their existing range? In this age of booming private label brands, the trend for retailers to grow their own product ranges is causing national consumer product goods brand managers added anxiety. It also presents some relationship challenges for retailers who want to grow value and trust for private labels with their customers.
There is mounting evidence (Deloitte Review: The Battle for Brands in a World of Private Labels), which suggests national brands are losing their hold on the consumer, as there is a degree of separation between consumers and national brands, as compared to private labels. Consumers are more willing to try new and different private label brands; the perception exists that there is more value in these brands. This perceived value can be in the form of price, trust or even the ability to interact with the owners of these brands. Although private label sales are growing as the economy weakens, the industry needs to understand there are important lessons to be learned from past recessions if the current market share gains are to become long-lasting.
Compared with other key emerging markets such as Mexico, China and Russia, Planet Retail estimates that South Africa still has the highest private label share of consumer spending on groceries within this group of countries. Nonetheless, figures from Europe show that the forecast 11.3% share in 2016 for South Africa's private labels is relatively low in absolute terms and leaves a lot of scope for growth and opportunity. Attaching value This begs an important question for consumer product companies: "How do you attach value and quality to a private brand to ensure it becomes a destination brand." Retailers are realising there are several benefits in developing and marketing private label products. Among them are:
The first relates to potential increases in profitability, which stems from the higher average price margins private label brands generate for retailers. The better price margins could be attributed to the fact that private label brands require minimal advertising expenditure; lower research and development costs; and, usually, reduced packaging costs. Private label brands can assist in developing loyalty to a retailer and in creating a distinct corporate identity for a business. Retailers however must ensure careful managerial practices are implemented for these brands in order to maintain retailer brand equity. Research indicates that consumers who purchase private label brands regularly do not only become loyal to that particular brand but also to the retailer through which it is sold. Private labels have become omnipresent and have achieved enormous success, thus providing a base for the improvement in branding activities. A Deloitte global private label report indicates consumer perceptions and attitudes toward private label brands are changing significantly. The report offers insight into the notion that spending less for private label brands does not necessarily mean consumers are settling for less. I believe private labels have changed from inferior generics to brands in their own right with value beyond functional attributes. Consumer knowledge critical Crucial to creating value and quality in private label products is understanding the wants and needs of the consumer. Consumers are becoming more discerning and want to understand the emotional as well as economic value of their purchases. This can be achieved by effectively telling the story of the private label brand in marketing, effective use of social media, in-store communications and through packaging. Using loyalty programmes is yet another way to track consumer spend and determine what it is they want and need. By creating an emotional link to the journey of the product or brand, retailers are able to appeal to customers on a personal level. Innovation is another key driver in creating a successful private label and retailers are taking product and brand building innovation to heart. Driving innovation within private label brand-driven retailers can be more nimble than national consumer product brands. Developing a private label brand can therefore be more efficient and be done in much less time. Depending on their business model, private brands do not necessarily have to make the same long-term capital investments in product development, manufacturing and other quantitative research methods to gain the assurance that their value proposition is relevant and the long-term investment warranted.
Stefano Pessina, executive chairman of Alliance Boots, a leading international, pharmacy-led health and beauty group which operates the UK high street pharmacy, Boots, was quoted last year as saying that they are looking to build Alliance Boots' private labels into a third core area for the business by distributing them through third party retailers. "The brand will be something that is really important over a long period. It will lead to a new dimension. We said that we wanted to invest in our brand and we also said that we wanted to elevate the status of the brand from being a part of one of our two core businesses, retail and wholesale, to be a third leg, something that has its own life and this is what we will do," he said. Carrefour and Alliance Boots have entered into a 10-year co-operation agreement that will see cosmetics made by Boots sold under the Carrefour brand in some European countries.
Probably still some way off for the South African private labels, but this strategy may also open many opportunities for growing revenue and market share. Private label brands will start to lead the way for South African retailers. It's probably safe to conclude the next generation of super successful brands will not come from the name brands, but from more private label brand-focused retailers. It is therefore important retailers consider private labels with a clear strategy and show the value attached to their products. Consumers seeking to save some money in tough times may be fuelling the current growth in private label brands, however progressive retailers will continue to innovate and leverage the immediate access they have to their customers to the fullest advantage.
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he store in Kamfinsa will be the first Pick n Pay store in Zimbabwe bearing the company's logo and will culminate in a rebranding exercise of all TM supermarkets countrywide - where Pick n Pay holds a 49% stake in the supermarket chain.