RETAIL NEWS. AUGUST 2013 Zimbabwe internet mobile phone traffic tops SUNDAY MAIL. Saturday, 21 July 2012
The country’s internet traffic conducted through mobile phone devices is the highest in the world at 58,1 percent, raising expectations that the local market could be prime for both m-commerce and e-commerce, an international tele-communications expert has said.
M-commerce is simply described as the buying and selling of goods using hand-held devices, while e-commerce is the buying and selling of goods on the internet or the worldwide web. Mobile telephones have provided a convenient platform for the trading of goods and services.Speaking at a recent workshop on brand strategy in the digital space, which was organised by Ryan Octave Lane, Mr Jonathan Hoehler, the chief technical officer of Starfish, a South African-based firm that specialises in wireless applications, noted that a study by Royal Kingdom had shown that mobile data now constitute about 10 percent of all data traffic globally across the internet.
He added that the growth in mobile phone internet traffic in Africa, particularly in Zimbabwe, is “phenomenal”. “Globally, now, mobile data constitute about 10 percent of all data traffic globally across the internet. And where does Africa sit? At 14,85 percent. So, of all our Internet traffic throughout the entire continent, 14,85 percent of it is mobile data, and the second highest in the world outside Asia, which has two huge markets in China and India.
“In 2010 that figure was about 5,81 percent. That’s impressive growth . . . “And what is so interesting for me is that Zimbabwe, according to the research done by Royal Kingdom, 58,06 percent of all Internet traffic is done by the mobile phone — it’s the highest in the world, which is really, really cool,” said Mr Hoehler.
Most interestingly, according to Mr Hoehler, there was also a study that was done by web browsing giant Opera Mini indicating the most visited sites in Zimbabwe and the commonly used handsets in accessing these sites. The top 10 visited sites included Facebook, Google, Wikipedia, Youtube, Yahoo, BBC, Opera Mini site, The Herald, Twitter, CNN. In addition, the commonly used mobile phones are the Nokia Xpress Music, Samsung E250, all Nokias and LG phones.
It is believed that this pattern provides interesting data for businesses who intend to leverage on the technological boom to market and sell their goods. The advent of the mobile phone has had far-reaching impact on communication on the continent as fixed telephone lines have remained insignificant. Currently, Africa is considered the second biggest mobile market in the world, but the fastest growing mobile market. Estimates indicate that 90 percent of all mobile phones in Africa are mobile phones, while there are 1,1 billion active mobile SIM cards.But most crucially, more than 96 percent of all subscribers on the continent are pre-paid.
Again, Zimbabwe is considered as the fastest-growing market for mobile data usage. Added Mr Hoehler: “In terms of mobile data usage, Zimbabwe is also, out of the countries that were analysed — about 10 countries — the fastest-growing market. That included South Africa, Kenya and Egypt. There is a lot for mobile data and mobile data traffic in Zimbabwe.”
Separately, Ryan Octave Lane executive chairman Dr Brian Sedze said the revolution brought by technology has created two distinct groups: the digital natives, which is made up of those under 20 and are much more conversant with technology and its platforms; and the digital immigrants made up of people usually above 25 who find it difficult to use the new platforms.
“Technology creates and destroys value. So, technology has got an impact on the firms, individuals and society. Today, organisations are just about creating value by collaborating with consumers and co-creating the product. Products are now being marketed by being inclusive with the customer. About 65 percent of Africans access internet over the phone, and a phone is no longer a platform for voice, it is now a platform for commerce.
“Everyone is accessing his internet via a mobile device. You also have to understand to market using social platforms. “However, most organisations do not know where their audiences are. If you are marketing; if your brand has to get good presence, it has got to be on the platform where people spend most of their time,” explained Dr Sedze.
Market watchers note that the local tele-communications boom, especially for mobile telephony, has been occasioned by massive investments by mobile telecommunications companies Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne. Econet has injected more than $600 million into expansion and plans are already advanced to pour additional resources.
Last week, information gathered suggested that Net*One was going to receive equipment worth $200 million from its Chinese technical partner Huawei Technologies. The laying of fibre-optic cables has also raised expectations that broadband capacity will be enhanced in the short to medium term.
Wal-Mart’s Family Firm
“The virtues and vices of the founder can shape the culture of the organisation”. Sam Walton knew the value of dollar and Wal-Mart knows the value of a dollar; they can squeeze a supplier but families flock to their stores for value, better value for their money than anywhere else.
The Walton family [the richest in America] still live in Bentonville, Arkansas a town of only 25 000. The first WM store is now a company museum formalising the stories that bind the organisation together. Eldest son Rob is now chairman – making the company a generation 2. They still own 39% of the firm named after their father. Grandchildren traditionally squander the inheritance-purposefully; or through ineptitude or neglect.
WM symbolises corporate power; its buying power is the strongest in the world. “If WM move into your country, or county, or town, do not compete on price. Find something else to compete on, or find a buyer for your business.”
However activists are alarmed by the effect this giant has on local stores even though consumers might like the convenience and great prices. There is however the effect on the broader social fabric. Stores within a 20 mile radius are adversely affected. And if WM decides that business is not so good they may move out leaving communities worse off. There is a perception that WM does not make for a good corporate citizen. Human rights activists say WM’s clothes are often produced in 3rd world countries under “sweatshop” conditions; environmentalists worry about edge-of-town shopping sprawl.
Employees. In 2004 WM employed 1.2 m in the US and 1.5 worldwide. They have a strong record on employing people with disabilities and a very diverse workforce ethnically. But there are fewer women in managerial positions compared to other American retailers. They are accused of suppressing real wages.
With 3 400 locations they are rated as one of the most philanthropic companies in US.
Suppliers. Talk of partnership with suppliers can be a one-sided relationship. Many feel there is no real option to taking a WM contract. They have pushed for a “Made in America” programme.
Non-market strategy. Stakeholder relations are taken seriously with implications for consumers, employees, local communities, investors and suppliers being considered.
If WM was a country it would rank as the 30th largest economy just behind Saudi Arabia  with a 11% growth rate. It had successes in Canada, Mexico and UK but more difficulty in Brazil, continental Europe, and China and Japan due largely to cultural differences. Internationalisation involves the imposition of core WM values and practices with perhaps some localisation/customisation. They had union unrest in Brazil; faced restrictive opening hours in Germany; faced control in China.
Wal-Mart’s Family Firm: Critics Critique, but big business rules: Vol22. No.2 2006 Strategic Direction
Walmart's local supplier programme pays off for Oceanfresh
26 Mar 2013
Walmart is having an impact on local suppliers by providing access to international markets, as seen with the recent success of Lonrho's Oceanfresh Seafoods, a local purveyor of fresh and frozen seafood, being listed in Sam's Club stores in the US. Gavin van der Burgh, Oceanfresh CEO says, "The company is delighted to have started supplying Sam's Club in the US with natural, wild caught, sustainably sourced Cape Hake fish fillets - a top quality, deep water, white fish. Lonrho owns an expanding portfolio of businesses in the seafood and fresh produce sectors that operate to the highest international standards and is increasingly supplying fresh and frozen produce from Africa to the world's foremost retailers." The product will be exported out of both South Africa and Namibia.
"Our members are very focused on high quality, sustainably sourced seafood of which the Cape Hake fillets have been a positive addition to the assortment," says Kendall Sallee, Sam's Club senior seafood buyer. "We've just launched the Ocean Fresh Cape Hake in 80 of our locations in the US and I anticipate increased sales and distribution as members become accustomed to the item and learn about the quality and versatility of the fish."
"The listing is just one example of how we've been able to connect local suppliers to a global market," reiterates Ramesh Subbiah, global sourcing executive, Massmart. "The opportunities are there and with Walmart's knowhow there are even more ways for us to help and develop some of our suppliers."
One of the ways the group measures its success is by the number of Massmart facilitated African supplier listings in other Walmart markets. "We've built a good partnership with Oceanfresh which will benefit both companies and our members," concludes Sallee.
Last week the South African Competition Tribunal authorised the acquisition by Wal-Mart of the 51 percent share in the South African retailer Massmart at a price of some P16.1 billion.
This gives the global wholesale and retail giant a foothold in Africa from which it will almost certainly expand. As throughout much of Southern Africa Massmart is better known as Game and therefore by extension a decision made in Pretoria, will mean that Wal-Mart has arrived in Botswana. It has two stores in the country, in Francistown and Gaborone and operations in a dozen or so African countries.
Massmart was already planning expansions of its network prior to the merger into countries like Nigeria, DRC and Angola. With a global giant like Wal-Mart now in the driver's seat the market expansion into Africa will only be held back by the pace of growth and incomes of the continent. In many ways the merger is, from a purely product and sales range, a near perfect fit as the range of products in Game shops are similar to the range that one finds in many Wal-Mart stores around the world.
It was by no means obvious for a very long time that the Wal-Mart/Massmart deal was going to proceed because it was feared by Wal-Mart that the South African Competition Authority would impose targets on using local suppliers. This was seen as a deal breaker by Wal-mart.
Instead what has happened was that Wal-Mart has agreed to establish in South Africa a R100 million fund to help develop local suppliers as well as some commitment to recognise the unions. The conditions imposed on Wal-Mart have been described by business analysts as 'meek and mild'. In all fairness to the Competition Authority in South Africa, which has a fearsome reputation for protecting South African consumers from unfair trade practices, it could not have imposed a local supply obligation on Wal-Mart and not on other wholesalers and retailers in the industry. Will the acquisition by Wal-Mart of Massmart be good for Botswana? The fear in South Africa, justified or not, was that because of Wal-Mart's size - it is said to be China's biggest buyer , and with its value chains local producers would simply be cut out of the market and that other retailers would, similarly be driven out of business.
The fear is that over time Wal-Mart will also drive out competitors who were reliant on these often more expensive local suppliers who will in turn go out of business. In Botswana we have few local suppliers of consumer goods except a narrow range of food products and therefore the fear of the impact of Wal-Mart on the country is not what you find in South Africa. Competitors on the other hand will have a much tougher life as a result of Wal-Mart but that will be good for the Botswana consumer, at least in the short to medium term.
But what is particularly interesting is the agreement to set up a R100 million fund to help develop suppliers in South Africa. If these suppliers will be successful then they will sell to Wal-Mart which will then export it to Game in Botswana and other countries and so South African producers will continue to maintain their control in the African market. This is all good for South Africa producers but what about us? The presumption is that Botswana and the other African countries would simply not notice what Wal-Mart had agreed to and it would just be business as usual. South African owned and based firms will continue to export across the border and as for the Botswana supplier, well, what Botswana suppliers?
In South Africa Wal-Mart has now created a precedent which has been noticed in other African countries and perhaps it is time that all the South African based retail operators recognise that they are operating in a different African reality, where all the countries in which they sell want to see domestic production and exports. Maybe it is time for Botswana to give consideration to asking that all the South African retailers and wholesalers copy Wal-Mart's 'generosity' and establish funds to help develop local entrepreneurs to supply their value chains. It is extremely difficult for small Botswana producers of any product to ever penetrate the retail supermarkets here in the country. Not only does the local producer have to demonstrate that they can produce a product consistently without supply disruption at a competitive price they also have to overcome the fact most supermarkets practice what is called 'single point of supply sourcing' and they simply don't want to buy from many sources.
Supermarkets order most of the products that you find on the shelf from one point and that is what makes them so profitable and their prices relatively low. It is also what destroyed the old small shops. They do not have to buy from scores of buyers which increases their overheads enormously. They also are able to buy in bulk. Kraft, for example, makes chewing gum in Botswana from raw materials that are imported from South Africa and beyond.
The final product is then returned to Guateng where it is distributed from one point to its entire marketing network throughout southern Africa with some of the product coming back to Botswana. It is an enormous challenge to get a small local producer in Botswana to import raw materials and intermediate goods, produce the product then export back it back to South Africa for distribution and then return it, at least in part to Botswana, and still make a profit. That is why it so rarely happens and only tends to happen with high value to weight items like chewing gum. The big South African-based retailers are probably very well placed to help local business, if they choose, but a little prodding, assistance and direction from government might make some of them a little more like Wal-Mart in their generosity towards the development of local business in Botswana.
*These are the views of Professor Roman Grynberg and not necessarily of the Botswana Institute for Development Policy Analysis where he is employed.
Tiger Brands boosts Zimbabwe unit
7 Sep 2012
An investment in Zimbabwe's National Foods by Tiger Brands has helped the Zimbabwean company boost capacity utilisation to 404,000 metric tons in the full year to the end of June. Tiger Brands last year raised its stake in National Foods after buying a further 11% of the company for $11.7m. It now owns 37% of the company while the majority of the remaining interest is held by Innscor Africa, which has interests in fast foods, retail and distribution sectors.
However, National Foods, a maize and flour milling, stock feeds processing and fast moving consumer goods company, is battling against imported processed foods. Its fast moving consumer goods unit's products, which include packaged rice, pastas, and tinned beans are struggling to beat foreign products.
Group chairman Todd Moyo said yesterday a turnaround strategy had been put in place to revive the ailing fast moving consumer goods unit. This includes "streamlining distribution costs, reducing the interest burden and developing category plans". It is expected that these moves will significantly raise volumes.
National Foods has pinned its hopes of further growth from continuing operations on likely demand for maize meal and flour owing to a possible shortage of food supplies both domestically and in the Southern African region.
However, with Zimbabwe's agricultural season in limbo - it is projected to record negative growth this year - the company could well be forced to rely on imports for its raw materials.
"The possible grain shortages reinforce the need for our local agriculture to be more productive so that we are not dependent on other countries for agricultural raw materials and related finished goods," said Moyo.
David Morgan, chairman of Innscor Africa - the other major shareholder in National Foods - said yesterday the company's results for the period under review were "pleasing".
Morgan attributed the results to "increased capacity utilisation" after the investment by Tiger Brands, and further investment "into core plant and equipment".
The world’s richest add more to their fortunEEes
Sunday, 06 January 2013
The richest people on the planet got even richer in 2012, adding $241 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 100 wealthiest individuals.
The aggregate net worth of the world’s top moguls stood at $1,9 trillion at the market close on December 31, according to the index.
Retail and telecommunications fortunes surged about 20 percent on average during the year. Of the 100 people who appeared on the final ranking of 2012, only 16 registered a net loss for the 12-month period.
“Last year was a great one for the world’s billionaires,” said John Catsimatidis, the billionaire owner of Red Apple Group Inc, in an e-mail written poolside on his BlackBerry in the Bahamas. “In 2013, they will continue looking for investments around the world — and not necessarily in US — that will give them an advantage.” Amancio Ortega, the Spaniard who founded retailer Inditex SA, was the year’s biggest gainer. The 76-year-old tycoon’s fortune increased $22,2 billion to $57,5 billion, according to the index, as shares of Inditex, operator of the Zara clothing chain, rose 66,7 percent.
“It’s an amazing company that has done great and the gains are quite justified given its performance,” said Christodoulos Chaviaras, an analyst at Barclays plc in London who’s had an “equalweight” rating on Inditex for about a year. “Can they repeat that? It will be harder. A lot of the positive news is already reflected in the share price.”
Global stocks soared in 2012. The MSCI World Index gained 13,2 percent during the year to close at 1338,50 on December 31. The Standard and Poor’s 500 Index rose 13,4 percent to close at 1426,19.
European stocks surged in the second half of the year. The Stoxx Europe 600 is up 19,6 percent since June 4, advancing as the European Central Bank introduced bond-buying programmes, S&P upgraded Greece’s debt and German business confidence rose more than forecast. The benchmark gauge’s 14,4 percent advance for the year was the best annual return since 2009. Carlos Slim, the telecommunications magnate who controls Mexico’s America Movil SAB, maintained his title as the richest person on earth for the entire year.
The 72-year-old’s net worth rose $13,4 billion — or 21,6 percent — through December 31, making him the second-biggest gainer by dollars. Gains by Slim’s industrial conglomerate, Grupo Carso SAB, and Grupo Financiero Inbursa, his banking and insurance operation, more than offset the decline posted by America Movil, his biggest holding. The largest mobile phone operator in the Americas by subscribers fell 5,8 percent to close at 14,9 pesos at the end of the year.
“America Movil is no longer the growth story that it has been, given the increase in Latin American wireless penetration over the last five years,” said Chris King, an analyst at Stifel Nicolaus & Co in Baltimore, Maryland. “It continues to generate a very high amount of cash flow and has the best set of telecom assets across Latin America.”
According to King, one of Slim’s biggest challenges will be dealing with regulation in Mexico and Colombia designed to punish or even out the market share between America Movil and its competitors. Of the 14 analysts who cover the stock, 71 percent have a buy rating on the company, with an average target price of 19,15 pesos per share, according to data compiled by Bloomberg.
US software mogul Bill Gates (57) ranks second on the list, trailing Slim by $12,5 billion. The Microsoft co-founder added $7 billion to his net worth as shares of the Redmond, Washington-based company, rose 2,9 percent.
Microsoft stock accounts for less than 20 percent of the billionaire’s fortune.
Warren Buffett (82) lost his title as the world’s third- richest man to Ortega on August 6. The Berkshire Hathaway chairman gained $5,1 billion during the year, even after donating 22,3 million Berkshire Class B shares in July to charity.
The billionaire, who has pledged to give away most of his fortune, spent much of the year pressing for higher taxes on the wealthy. “On incomes of over $1 million, the excess $1 million should have a minimum tax of 30 percent. And then over $10 million, 35 percent,” Buffett said in an interview with Charlie Rose in November. “Tax law should be progressive. And I think that when people make $15 million or $20 million or $200 million and pay a 10 percent rate, something should be done about it.”
IKEA founder Ingvar Kamprad (86) is the world’s fifth-richest person with a $42,9 billion fortune. The complex ownership structure behind IKEA, the world’s largest furniture retailer, became more transparent in August after IKEA’s franchisor published its financial performance publicly for the first time. His net worth rose 16,6 percent in 2012.
Brazil’s Eike Batista (56) was the year’s biggest loser by dollars, falling $10,1 billion. The commodities maven, who vowed a year ago that he’d become the world’s wealthiest man by 2015, sold a 5,63 percent stake in his EBX Group Co in March to Abu Dhabi’s Mubadala Development Co.
As part of the deal, he pledged an unspecified additional stake in 2019 if he fails to meet a 5 percent annual return on the sovereign wealth fund’s $2 billion investment, according to a person with knowledge of the deal. Batista now ranks 75th in the world with a $12,4 billion net worth. On March 27, he was worth $34,5 billion and ranked 8th on the Bloomberg index. “Next year is going to be a lot of work for Eike,” said Lucas Brendler, who helps manage about 6 billion reais at Banco Geracao Futuro de Investimentos in Porto Alegre, Brazil. “It’s going to be a year for him to recover investors’ confidence, and to leave the realm of theory and start delivering results. The EBX companies have great growth potential.”
Batista’s former title as the richest Brazilian is now held by 73-year-old banker Jorge Paulo Lemann, who ranks 37th on the index with an $18,8 billion fortune. The country’s second-richest person is Dirce Camargo, the matriarch behind Camargo Correa SA, the Sao Paulo-based conglomerate that has interests in cement, electricity and Havaianas flip-flops. Her net worth is $13,4 billion, according to the Bloomberg ranking.
Camargo, who doesn’t appear on any other major international wealth ranking, is one of 54 billionaires the index uncovered during the year. Among the others: Hamdi Ulukaya, the 40-year-old Turkish immigrant owner of Chobani, the best-selling yoghurt brand in the US; South Africa’s Nathan “Natie” Kirsh (80) who amassed a $5,4 billion fortune in retail and real estate; and Elaine Marshall (70) whose 14,6 percent ownership of closely held Koch Industries makes her the fourth-richest woman in America. She is worth $14,1 billion. Koch Industries’ two other shareholders, the brothers Charles and David Koch, are each worth $40,9 billion, up 20,9 percent — $7,1 billion — for the year.
Oracle Corp founder Larry Ellison rose $6,4 billion in 2012 as shares of the world’s largest database company jumped 31,7 percent. Ellison (68), who has more than tripled the amount of Oracle stock he has pledged against lines of credit in the last year, agreed to buy 98 percent of Hawaii’s Lanai island. The 365-square-kilometer parcel with no traffic lights was purchased from billionaire David Murdock, the 89-year-old chairman of Dole Food Co, the world’s largest producer of fresh fruit and vegetables.
The bulk of Ellison’s fortune comes from his 23,5 percent stake in Oracle. He also has interests in software makers NetSuite Inc and LeapFrog Enterprises Inc, as well as property holdings, including estates in California and Newport, Rhode Island.
“Oracle continues to innovate,” said Yun Kim, an analyst at Janney Montgomery Scott in New York. “They’re well positioned in the near term with their core database offerings, their engineering systems, and cloud computing.”
Kim has a buy rating on the stock with a target price of $43 per share. Of the 43 analysts who cover Oracle, 29 have a buy rating and 14 have holds, according to data compiled by Bloomberg.
Bernard Arnault, France’s richest man, gained $8,1 billion as shares of LVMH Moet Hennessy Louis Vuitton SA and its publicly traded holding company Christian Dior SA soared. In May, the LVMH chairman’s net worth was lowered $15 billion on the index because of the way his ownership stake in the world’s largest luxury goods company is structured.
The 63-year-old controls 46,5 percent of LVMH’s share capital, according to the 2011 annual report of the Paris-based maker of Louis Vuitton handbags and Moet & Chandon champagne. That figure includes 5,6 percent of LVMH shares held by Arnault, and a 40,9 percent stake of the company owned by Christian Dior.
Arnault, who is applying for Belgian citizenship for “personal” reasons, owns 70,4 percent of Christian Dior, according to French regulatory filings. The remaining 29,6 percent of Dior is held by outside investors. While he controls all the voting power of Dior’s stake in LVMH, his economic interest is less than the figure reported in the LVMH annual report. His net worth is valued at $28,8 billion. Retail fortunes rose 19,5 percent on average, while non-retail fortunes increased 11,5 percent. Amazon.com Inc. chief executive Jeff Bezos (48) added $6,9 billion to his net worth as shares of the world’s largest online retailer rose 45 percent. The four heirs to the Wal-Mart Stores Inc fortune — Jim Walton, Christy Walton, Alice Walton and Rob Walton — gained a combined $13,5 billion.
Stefan Persson, the chairman of Swedish clothing retailer Hennes & Mauritz AB, added $2,7 billion.
Sheldon Adelson, gambling’s richest man, gained $2,8 billion. The 79-year-old chairman of Las Vegas Sands Corp, which operates casinos in Macau, Singapore and the US, received $1,2 billion in December when the company paid a special dividend of $2,75 per share.
Chatsworth store completes 1000th opening for PnP
29 Apr 2013
The opening of the new Pick n Pay store on the corner of Tranquil and Joyhurst Streets in Chatsworth marks the 1000th store opening for the group and finalisation of a 30-year old dream of founder Raymond Ackerman.
"Opening our 1000th store is an incredible milestone for the group and one we are delighted to share and celebrate with the people of Chatsworth," said Gareth Ackerman, chairman of Pick n Pay. "This is a personal dream come true for the group's founder, who fought so long for this particular store to become a reality. We are delighted the day has come and we can open our doors to a one-of-a-kind store, created especially for this unique community.
"We've spent months researching exactly what the Chatsworth people wanted from the group and what was missing from the existing retail offering in the area. After careful planning to make sure we get our offering exactly right, we're excited to at last be serving the area and to be giving the community the quality and service the brand stands for," said Ackerman.
According to the GM in KwaZulu-Natal, Anil Gopichund, every bit of the 6000sqm store was especially merchandised with the Chatsworth shopper in mind. "From the fresh Asian vegetables and best spices, to the range of cookware, superior seafood, dedicated vegetarian deli and fresh cut flowers, we have worked tirelessly to ensure a great offering and can't wait to get to know everyone.
"In terms of range, when it comes to fresh produce, the widest offering of the freshest fruit and vegetables used in traditional Indian cuisine is available at the store. These include favourites such as okra, Asian drumsticks (when in season), calabash, karela, gwaar, luffer, gudra, dubla beans, and many more. Also on the menu are an assortment of fresh chillies, ginger and fresh herbs such as Dhania and green and red herbs.
"However, the true test of Indian cuisine is in the spices and we've got the best in town, if not the country, thanks to our partnership with world-renowned Spice Emporium. On offer in our spice bar, customers will find a heady abundance of herbs and spices including ghatia, boondie, fine and rough sev, special garam masala, achar masala, mother-in-law masala, special Durban masala and many others.
Namibian crab, Indian prawns, vegetarian deli
The fish and seafood department is also bound to impress, where the popular Orange Crab, specially flown in from Namibia, is of high quality and well-priced; large Mozambican prawn tails (with veins and legs removed) and Vannamei prawns, specially sourced from India. The in house brand Seafood Mix offers calamari, prawns, mussels, squid and crab sticks, and the KwaZulu-Natal best-seller, whole hake also makes it onto the list along with hake fillets, roe and yellowtail.
The deli has all the usual great value but in line with its commitment to meet the needs of the community, it has an entirely separate vegetarian deli with its own kitchen. The bakery offers delicious naan and a wide range of egg-free cakes, breads and rolls, as well as other specially baked treats such as cake dough, spicy donuts and daily freshly baked breads and rolls.
The store offers fashion, a liquor store just outside the entrance and the opportunity to win a new Hyundai i10 for a customer who signs up for Smart Shopper points before 12 May.
Pay bills, buy phones
The Smart Zone in-store offers services such as prepaid electricity, money transfers, banking and social grants can also be collected here. Cellphones can be purchased and pit through 'RICA' on the spot, and shoppers can pay their bills, traffic fines, TV license and DStv, all with the assistance of friendly and qualified staff.
"To ensure the entire experience is a pleasurable one, we've provided 800 free underground parking bays, including special-needs bays with lifts that come directly to the store," said Gopichund.
"The essence of the Chatsworth community resonates with the values of the company, one built on caring for the communities that it serves. Without the support of the communities in which we operate we would not exist, which is why 80% of our 220 staff have been employed from the local community. We look forward to embarking on this new journey with our Chatsworth customers, which we hope will be a long and fruitful one," he concludes.
OK records $12,4m after-tax profit
June 14, 2013 in Business, General Business [News Day]
ZIMBABWE Stock Exchange (ZSE)-listed retail group OK Zimbabwe Limited’s after-tax profit for the full year to March was up 20,1% to $12,4 million driven by a significant growth in revenue, the company has announced.
Report by Tarisai Mandizha
Attributable earnings per share according to audited results for the year ending March 31 2013 was up 18% to 1,2 cents as directors proposed a final dividend of 0,40 cents per share.
Revenue rose to $479,6 million from $421 million during the period under review buoyed by promotions and an ongoing branch network expansion.
Sales were expected to increase after the next harmonised elections set for July 31. “The growth in revenue and earnings is acceptable, in a very difficult environment of low inflation at 2,8% per annum with gross domestic product growth of less than 5%,” group chief executive Willard Zireva said. Total assets as at March 31 grew to $116 million from $95 million.
Net operating costs increased to $33 million from $27 million partly driven by the ongoing expansion and refurbishment programmes.
The retail group, which runs OK shops, Bon Marché and OK Mart, last month opened a new branch along Wynne Street in Harare amid plans to add three more branches in Chitungwiza, Hwange and Harare. To widen its revenue inflows, the group announced that it had recently obtained a Money Transfer Agency licence and was currently developing other financial services products to expand this line of business.
OK Zimbabwe said overheads also increased by 19,2% to $65,2 million in the previous year mainly due to increases in employee benefits as the company increased its workforce.
“Costs incurred in moving products to the branches increased pursuant to greater use of the distribution centre for warehousing and supply of imported products. The cost of borrowing increased to $800 000 from $500 000 in the prior year as the convertible loan from Investec Africa Frontier (Private) Equity Fund and other bank facilities were accessed during the year,” group chairman David Lake said in a statement accompanying the results.
Bottom of Form
10 Responses to OK records $12,4m after-tax profit
Delmar Davis Mackomber June 14, 2013 at 8:26 am
Good results but i would appreciate if you’d fairly draw winners for your Challenge grand price.Why have two urns ,instead of proceeding with the single big one where your other car prizes were drawn?Whose coupons were in these small urns?
zvazviri June 14, 2013 at 8:47 am
Gud for them and their employees.I think its more to do with a happy committed workforce.Your rival supermarket is neglecting vashandi vari kuunza mari and in the end a disgruntled lot is never expected to rise up to the challenge.Kutadza kubhadhara overtime as stipulated by labour laws…It is a pity
Mwalimu June 14, 2013 at 8:52 am
sly June 14, 2013 at 9:21 am
yeah they should continue selling cheap s.a products otherwise wakada kutedzera zvana kasukuwere zvekuti hanzi tengesai zvinhu zvemuno chete zvinodhura tinozviendera ku s.a nekyu botwana tondozvitengera tega
Bruno June 14, 2013 at 10:32 am
Makamboonawo here tsvina iri mumashoko a OK. To say the truth OK Zimbabwe should do something about the state of their shops. Have you also noticed how they change Till operators. With these profits OK should be doing better than this.
Norest June 14, 2013 at 10:35 am
It is true OK shops are very dirty!!! People only rush there for the grand challenge. Queue management is poor. Customer service at till points also poor.
tafy June 14, 2013 at 10:38 am
Hongu mari yavapo tazviona kongatichiincreaser job security yevashandi by making them permanent employees. Its a shame to note that more than 50 percent of yo employees are on contract bases, and most of them for more than three years
Warl June 14, 2013 at 7:04 pm
Asi OK is by far much better than TM patsvina.
babaprince June 14, 2013 at 8:07 pm
pay your workforce
Mudukuruso June 15, 2013 at 11:33 am
Ini ndiri mushandi kwaOK, its a pity that OK is nice from afar but far from nice. Outsiders see a different OK than what we see from within. Good profits are posted at the expense of employees – we are overworked and underpaid, job security is non-existent, autocratic leadership style prevails, and top management take advantage of the job market as the “take it-or-leave-it” mindset rules.
But in all this madness, I sense the wind of change. This regime will surely collapse one of these days!
OK targets regional markets [Daily News]. Saturday, 15 June 2013
HARARE - Zimbabwe Stock Exchange-listed retailer OK Zimbabwe Limited (OK) said it will soon be expanding operations into the region as a way of boosting earnings and consolidating its foothold on the African continent.
Willard Zireva, OK chief executive told analysts at the company’s full year results briefing that the retail giant has set its eyes on setting up a thriving business venture in the region. “We are looking at funding our regional expansion initiatives from a combination of internally generated funds or borrowing locally,” he said without divulging the identity of the potential markets.
OK’s revenue in the full year to March 31 grew by 16,3 percent to $479, 6 million from $412,6 million in prior year. Profit before tax stood at $16,9 million from $15 million while profit after tax grew by 20,1 percent to $12,4 million from $10,3 million.
Overheads increased by 19,2 percent to $65,2 million from $54,7 million in the previous year.
“The increase in overheads was mainly a result of increases in employees benefits as more employees were engaged to man both the new branch opened during the year and the refurbishment of branches in order to provide adequate service in the improved facilities with broadened product offering,” said Zireva.
Capital expenditure was $12, 1 million, up from $11, 5 million in the prior year mainly as a result of store refurbishments and replacement of plant and equipment.
The cost of borrowing increased from $400 000 in prior year to $800 000 in the period under review while a $5 million convertible loan from Investec Africa Frontier Private Equity Fund (IAFPEF) translated to about seven percent shareholding in OK.
Zireva said that after obtaining a money transfer licence there has been positive development as the company continues to expand financial services products to improve this line of business.
“We are still building up in this line of business. I can confirm that for the first four months up to May the money transfer services contributed over $80 000, our target is to make it to a least $1 million,” said Zireva.
The group said imports continued to dominate products sold in their stores as local manufacturing remained depressed.
Going forward, the retailer said that despite diminishing disposable incomes they would continue competing fiercely through experience and building strong brands.
A final dividend of 40 cents per share was declared in the period under review, bringing the total dividend for the year to 60 cents a share, an increase of 20 percent over prior year. - Kudzai Chawafambira
Retailers still reliant on SA for supplies: OK
Sunday, 16 June 2013 00:00 [Sunday Mail]
Business Reporter South Africa remains Zimbabwe’s biggest source of retail products, highlighting a severely constrained local manufacturing base and increased vulnerability of local prices to the exchange rate between the South African rand and the United States dollar, OK Zimbabwe Limited has said. However, the retailer emphasises that it continues to actively source products from the local market. Though the economy has recovered from a decade-old slump before 2009, the productive sectors of the economy continue to face huge challenges in sourcing funds to recapitalise.
“The Group continued to import most of its products sold in the stores as supplies from the local manufacturing base remained inadequate. South Africa subsists as the major source of imported products and prices of goods were generally stable with minimum movement to the rand/US$ exchange rate.
“While it was necessary to import goods, the Group recognises the need for and continues to support local industries’ revival and the consequent generation of employment,” said OK Zimbabwe in a statement accompanying its financials for the year ended March 31, 2013.
The Confederation of Zimbabwe Industries (CZI), which represents the country’s major businesses, says more than 60 percent of goods on local supermarket shelves are imported, the bulk of which are from neighbouring South Africa.
A negative current account is now presenting a real challenge for policymakers as the country’s imports continue to outstrip exports. First-quarter statistics from ZimStats show that the country’s trade deficit widened to US$846 million as exports at US$814 million were more than half the figure of imports at US$1,7 billion. Relying on imports did not, however, influence prices at the giant retailer. Goods and services were relatively stable in the review period.
Revenues climbed 16 percent to US$480 million from US$412 million a year ago, while profit for the year rose 20,1 percent to US$12,4 million despite shrinking disposable incomes and a largely illiquid market.
During the current financial year, OK Zimbabwe plans to continue refurbishing its existing branches and re-opening new ones. Two new branches are planned in Chitungwiza and Hwange, while Bon Marche Eastlea “will be moved to larger premises”. Also, refurbishment work is planned at OK Waterfalls, OK Houghton Park and OK Bindura.
But as the retailers continue to grow so, too, has its costs. Overheads in the period rose 19 percent to US$65 million owing to increased insurance costs and related operational expenses.
“Insurance costs also increased significantly due to growth in asset values and the insurance excess paid under the fire claim. Costs incurred in moving products to the branches increased products. The cost of borrowing increased to US$0,8 million from US$0,5 million in the prior year as the convertible loan from Investec Africa Frontier Private Equity Fund (IAFPEF) and other bank facilities were accessed during the year,” explained OK Zimbabwe.
South Africa’s Investec Africa Frontier Private Equity Fund acquired a 7 percent equity in OK Zimbabwe in 2010. The Fund, an arm of Investec Asset Management, snatched up 29,6 percent of OK’s US$15 million rights offer, which received a 70,4 percent shareholder support. IAFPEF also agreed to a US$5 million loan facility with option to convert it to ordinary shares at agreed dates.
Herald:OK revenues surge to US$89m.
Friday, 29 July 2011
By Bright Madera RETAIL giant OK Zimbabwe Limited's revenues for the first quarter of the year grew 56 percent to US$89 million, buoyed by a strong capital injection from South Africa's Investec.
Chief executive Mr Willard Zireva, giving a trading update at the group's Annual General Meeting in Harare yesterday, said the new OK Mart store contributed 8,3 percent to total revenues.
He said OK Mart was expected to make losses for the first three months but managed to recover in the third month. Mr Zireva said during the period, shrinkage as a percentage of sales had been brought down to below industry levels of about 1 percent. Gross profit margins for the period were recorded at 17,9 percent compared with 17,8 recorded during the same period last year.
During the same period, profit before tax grew 500 percent compared with the previous year.
"We are expecting better margins going forward. We experienced diluted margins in June during the Grant Challenge (promotion), where we normally have low margins and high markdowns," said Mr Zireva.
Mr Zireva added that OK Mart was already breaking even and the group is expecting growth as they continue with their refurbishment exercise, being financed from previous fund-raising initiatives and internal resources.
The group plans to open a new branch in Westgate before the end of August.
OK now has a lease for Bon Marche Mount Pleasant where they did not have a licence. The shop would also be undergoing refurbishment. Three other shops - OK Marimba, Bon Marche and OK Fife Avenue - would also undergo refurbishment during the remainder of the year.
For the full year ended March 2011, OK generated US$257,4 million compared with US$187,5 million in 2010. Capital expenditure for the 12 months was US$9,4 million compared with US$1,5 in the previous year.
This expenditure was in respect of refurbishment of branches, replacement of computer equipment, replacement of plant equipment, generators, and on overhauling the operations and distribution vehicle fleet. OK closed the year with 51 outlets comprising 37 OK stores, six Bon Marche stores, six OK Express stores and two OK Mart Stores, which were acquired when the group took over the assets of Makro Zimbabwe in the last quarter of the financial year.
OK has continued to import the bulk of its products from other countries as the local market still does not have the capacity to meet local demand.
SA retail giants coming to Zim
Monday, 17 October 2011 00:00 HERALD
Business Reporter SEVERAL South Africa's retail giants could be headed for Zimbabwe to take up space at the multimillion-dollar emporium being constructed by Augur Investments and McCormick Property Development (SA). It had been expected that South African investors, due to their proximity, would set on the great trek up north after the country ended a decade of economic slide in 2009 to record its first growth in a decade.That did not happen as most of them took the same stance as their western counterparts who were hesitant to seize on opportunities presented by the economic stabilisation. Shoprite made a false move for OK, but pulled out at the eleventh hour.
But the decision taken by McCormick Property Development in partnership with Augur could be the signature mark that will draw big SA retail giants and see various other investors streaming to Zimbabwe.
Augur is an associate of West Group, which recently acquired Red Star. Augur and MPD have partnered in the 50-50 shareholding arrangement to set up the biggest mall in Africa (outside South Africa), which will be known as the Mall of Zimbabwe. The latter is well known for pioneering malls across Africa.Construction of the US$100 million emporium at the Millennium Park (Borrowdale) will start next year and is expected to last for about 16 months assuming all the things remain equal. MPD managing director Mr Jason McCormick said a number of South African retailers, among them Pick ‘n Pay and Spar supermarkets, had already taken up 53 percent of the space.
"About 53 percent of the floor space has already been taken up by South African retailers such as Pick ‘n Pay and Spar long before we have launched the project, we had been marketing the project back home," he said.
In the next six months the project partners will go on a spirited campaign to enlist local retailers interested in taking up space at the giant mall, as construction will start when all space is committed.
The South Africans pledged to comply with requirements of indigenisation saying they were familiar with its characteristics as it was similar to the BEE that occurred in South Africa over the last few years.
But they pointed out they initially were sceptical about coming to Zimbabwe due to distortion of facts by international media on the indigenisation process. Augur investments had to bring them here for a first hand account. Augur spokesperson Mr Ken Sharpe said the project was also a result of the vision and understanding of the City of Harare after Augur's proposal.
On inquiring for land it could develop, the firm was invited to assist in dualising the Harare International Airport road. "As we complete the airport road, more land will be unlocked for us to develop. "A parcel of land was given to us in return for the work we have done. The sum needed on the airport road is US$68 million," he said. The project is expected to create more than 1 000 jobs on completion.
Vice President Joice Mujuru launched the project last week. Local Government Minister Ignatius Chombo, City of Harare Mayor Muchadei Masunda and Information and Publicity Minister Webster Shamu attended the groundbreaking event graced by hundreds of stakeholders.
KFC eyes return to Zim
January 17, 2013 in Business, Companies
YUM! Restaurants International continues to expand the footprint of its KFC brand on the African continent, with plans to add stores in Tanzania, Uganda and Zimbabwe this year, the company said on Monday.
Report by BDlive
“Africa is undoubtedly one of the fastest-growing regions globally and KFC is fully committed to harnessing this opportunity and building a sustainable business model on the continent,” said Bruce Layzell, KFC general manager of new African markets.
Global brands are progressively looking to emerging markets to offset sluggish growth in traditional economies‚ and Africa presents a compelling investment case for retailers. The Economist Intelligence Unit predicts that by 2030‚ Africa’s top 18 cities could have a combined spending power of $1,3-trillion.
One of the main drivers of Africa’s growth spurt is the increasing pace of urbanisation and consumerisation.
The number of KFC restaurants in new African markets grew to 63 at the end of last year, in countries such as Angola, Nigeria, Malawi and Ghana. The figure excludes South Africa, Egypt, Morocco and Mauritius, which, if included, brings the total number of KFC restaurants on the continent to almost 900 outlets.
Local company Famous Brands, whose portfolio includes Wimpy, Debonairs Pizza and Steers, said heightened interest from prospective franchisees continued in the rest of Africa.
The company has outlets in more than 15 African countries including Nigeria, Ghana and Zambia.
There is a caveat: Africa is not an easy place to do business. Key risks include the lack of real estate‚ currency volatility‚ high taxes‚ corruption and red tape.
According to Spur Corporation CEO Pierre van Tonder, African expansion is made out to sound like it’s a pot of gold.
“But whatever you think is going to take 12 months there actually takes you 24 months. You need to be a facilitator in developing Africa‚ you need to be flexible‚ and you cannot take your corporate governance baggage out of South Africa and expect to develop in Africa‚” Van Tonder said last year.
Famous Brands CEO Kevin Hedderwick said: “We’ve been in Africa for 12 years, we are not like those guys who just started there yesterday. We’ve paid our school fees — it’s a tough place to trade.”
Bricks, mortar still important in shopping choice
24 Apr 2013
Late last year, research conducted by Cisco Systems predicted that global e-commerce would increase 13.5% annually over the next three years to reach an estimated $1.4 trillion in 2015 and, with rapid adoption of smartphones and tablets, anytime, anywhere virtual store browsing is playing a significant part in consumers' changing shopping habits.
In South Africa, where broadband internet penetration is still low - with approximately 6.8 million people connecting to the Internet via desktops and laptops - almost triple that amount, 16.8 million, are reportedly accessing the web via mobile devices. However, this is not necessarily translating into more e-commerce sales locally, since a large number of consumers now make use of multiple channels to shop.
"Many shoppers in South Africa access retailers' online stores on their desktops, laptops or mobile devices merely to compare and look up prices and specs for specific products and then still go to the brick and mortar shop to make the purchase," explains Simon Campbell-Young, CEO of Phoenix Distribution, a South African-based distributor of software and technology brands.
"There are various reasons for this: many people still distrust the security of making online transactions. However, even those who are not sceptical about paying online are often put off by the time it will take to have the product delivered to them and the cost in delivery fees. The postal service in South Africa is often criticised as being too slow and unreliable. Courier services, while faster, are too pricey to be a viable delivery option."
This evolving nature of buying, in which consumers are embracing digital technologies and devices in all stages of their shopping experience, has given birth to a new trend called omni-channel retailing.
"This new buzz term describes the approach of connecting the web, mobile and brick-and-mortar to make for a seamless customer experience," continues Campbell-Young. "It is the process of building a bridge between online and offline shopping. Brands have to do this in order to remain competitive. For example, brick and mortar shops can become more digital by using QR codes to provide more information about products. Some retailers already allow customers to browse in-store merchandise and then skip the checkout queues by paying for it online on in-store tablets. From their end, online shops can encourage sales with a 'click and brick' approach, allowing users to make the purchase online and then pick up the order in store."
Store shopping still important
The continuing importance of physical shops, where you have to jostle with crowds and stand in line at the cashier, in an increasingly virtual world was highlighted in a recent survey by UK-based Shoppercentric, called 'Shopping in a Multichannel World'. It found that 87% of respondents are still using a store as part of their purchasing journey and 45% of shoppers said that they will "always love going to the shops, no matter what new technologies are available."
Campbell-Young says that this convergence of online/offline shopping is going to benefit everyone along the retail channel and that it makes the relationship between suppliers and retailers more crucial than ever before.
"Retailers need to keep in mind that this new breed of omni-channel consumer is sophisticated and informed. They are going to have to anticipate the needs of their shoppers and see to it that the product they are searching for online is also in store. These shoppers have no patience with out of stock products or late deliveries. It will definitely be challenging at times, but beneficial to everyone.
Innscor faces stiff competition
October 26, 2012 in Business
INNSCOR Africa Limited (Innscor)’s fast food division is facing potentially stiff competition from global brands such as the United States of America’s KFC, with information indicating the two have taken up space for drive-in outlets at Ken Sharpe’s proposed US$100 million Mall of Zimbabwe to be constructed in the plush Borrowdale area.
Report by Taurai Mangudhla
In an interview, the manager of West Properties — owners of the property — Mike van Blerk told businessdigest the two will join major brands like Pick‘n’ Pay at the new mall, now expected to be completed by October 2014.
This comes as market information has linked KFC to a partnership with a local company, where it will open outlets at strategic points across the country.
In the past two years, the local fast food industry has seen the emergence of new outlets in major towns, prominent ones being Tawanda Mutyebere’s Chicken Slice and Tawanda Nyambirai’s TN Grill.
In September TN expanded its fast food division with the addition of ice cream and pizza outlets across its network.
The growing competition has seen players reducing prices, with consumers now buying a two-piece chicken and-chips combo for as little as US$3,50 compared to US$4,50 previously.
Chicken Inn launched its dollar meal promotion which has seen pieces of chicken or a standard size of chips going for US$1 from the previous US$2.
At Innscor’s full year results briefing for the year ended June 30 2012, group chief executive Tom Brown admitted the group was feeling the heat coming from competitors in the fast food division.
To maintain an edge, he said, shareholders had approved a US$50million investment to facelift their products and improve the branch network.
“About US$38 million of that will be spent on our bakeries, fast foods, poultry business, Colcom and some on Capri,” Brown said. “We are going to continue with our expansion, improve efficiencies and hope to maintain revenue growth of 15%,” he added.
Innscor finance director Julian Schonken said the investment will see the company expand by adding 33 fast food outlets this year comprising Chicken Inn, Pizza Inn and Nandos.
An additional bakery production line with a capacity of 100 000 loaves per day is on schedule for installation this month, to bring capacity to 500 000 loaves per day.
Innscor has emerged as the biggest confectionery company after the collapse of its major competitor Lobels which faced operational challenges at the height of hyperinflation and economic stagnation.
In its financial statements, Innscor reported a 44% growth in operating profit to US$68,5 million after a 21% revenue growth from 2011 to US$627,1 million.
The group’s bakeries and fast foods division in Zimbabwe and across the continent recorded a 53% growth in bakery volumes in the period under review. Customer counts in its fast foods operations grew 11% after 13 counters were added to the store network across Zimbabwe in the period under review — eight in Harare, three in Marondera and two in Mutare.
Schonken said the company generated US$48 million in cash from operating activities.
From Internet: OK Zimbabwe [companydatabase.org] 8 March 2011
Ok Zimbabwe Limited
OK Zimbabwe Limited is a supermarket retail chain. The Company's business covers three major categories: groceries, basic clothing and textiles, and house ware products. The groceries category includes butchery, delicatessen, takeaway, bakery, and fruit and vegetable sections. The bakeries, and fruit and vegetable operations are outsourced to Innscor and Favco respectively. Another specialist area is school wear. OK Zimbabwe Limited trades under three brand names: OK stores, Bon Marche stores and OK Express stores. All operations are carried out through a nationwide branch network that comprised 39 OK stores, five Bon Marche stores and 10 OK Express stores as of March 31, 2007.