Tag: retail

November retail sales data surprised market expectations with an 8.2% year-on-year increase, the strongest performance in five years.

According to FNB senior economic analyst Jason Muscat, Black Friday, during the last week of November, helped lift sales in the sector.

Sales were higher than the 3.5% year-on-year sales recorded for October, according to data released by Stats SA on Wednesday.

“This was the strongest year-on-year performance in five years,” said Muscat. Month-on-Month sales for November were 4% higher, compared to a -0.1% decline for October and -0.4% recorded for September.

“The figures should be viewed as transient in light of significant buying during the ‘Black Friday’ month, and in the context of relatively lacklustre trading updates from many domestic retailers.”

Muscat said that the figure shows that consumers and retailers are still constrained. Retailers are forced to introduce deep discounts to drive revenue, while sacrificing profit, and consumers are making use of the opportunity to save.

“Nevertheless, the sector is on track to make a significant, positive contribution to both fourth quarter GDP and full year 2017 GDP.”

Muscat said that a moderation in the retail sales data for December is expected. There will also likely be a contraction in the sales data for the first quarter of 2018, coming off the exceptionally high data reported for the fourth quarter.

Investec economist Kamilla Kaplan is also of the view that there may be weaker sales growth reported for December, especially as the Bureau of Economic Research Retail Survey for the fourth quarter showed that the retail sector’s performance during the festive period was not as expected.

The highest growth was reported for other retailers at 20.8%. This includes book stores, jewellers, sporting goods and second-hand goods. Retailers of household furniture, appliances and equipment reported growth of 14.1% and retailers of textiles, clothing, footwear and leather goods reported growth of 12.4%.

The main contributors to the 8.2% increase were general dealers, having contributed 2.6 percentage points, textiles, clothing, footwear and leather goods with 2.3 percentage points, and other retailers which contributed 2.2 percentage points.

Stefan Sulzer, partner and managing director at Boston Consulting Group, said at the end of 2017, the overall economy was in a fragile state as a result of factors such as appalling business confidence, political uncertainty ahead of the election of the new ANC president, as well as high unemployment.

Consequently, it was expected that all of these factors would culminate in constrained consumer consumption.

“However, the overall development of the retail sector was strong, following suit with the previous months. Amongst other factors, this was fuelled by significant promotional activity by retailers in SA,” said Sulzer.

“Based on the most recent retail figures, we can conclude that Black Friday 2018 was bigger than the previous year. It will now be interesting to see what momentum the retail sector carried into the arguably more important December 2017 trading period.”

Source: Supermarket & Retailer

The tech reckoning – and other trends for 2018

Technology is driving exponential growth and mind-blowing innovation in all areas of life, all around the world.

The tech reckoning 

Certainly, in recent years there have been concerns about rapid changes to our culture and questions about people’s ability to keep pace with those changes. But we have now lived with this generation of consumer technology long enough to all begin seeing very real downsides.

– Facial recognition and other biometrics amp up already serious privacy concerns

– Facebook and Twitter have failed to earn public trust. They’ve failed to police their platforms, letting cyber thugs in to divide the nation and affect an election. Not to mention an avalanche of extremist and offensive postings still finding their way online, despite claims of corrective action by the tech giants.

– Tech ethicist, Tristan Harris, schooled us on the addictive properties of social media, and how we are being controlled by a steady drip of “likes” and retweets — just enough to keep us hooked.

– Some research has shown that depression in teenagers is skyrocketing due to mobile phone use and social media influence.

– Alexa and Google Home are always listening—during a party, at dinner, or even in an argument with your loved ones! The possibility that voice data can be used in court as evidence is going to be the next big hurdle for these products. Where does your privacy begin and end?

– The big five – Facebook, Amazon, Microsoft, Google, Apple – (FAMGA) have grown beyond all expectations and are coming under increasing scrutiny for all manner of business, political, and social practices. Coming face to face with a world they didn’t intend to create, Silicon Valley has created its own retreat — disconnected from the billions of “users” they court — in order to reflect on what they wrought.

What this means for business

According to Edelman’s 2017 Trust Barometer, trust has imploded, reaching an all-time low. Their latest report shows that “85% lack full belief in the system, this belief increases vulnerability to fear and further distrust.”

This is the climate we are in now. Brands, business, boards should take note that this sort of disillusion bleeds over into multiple categories putting loyalty, revenue and brand image at risk.

Retail singularity

The gravitational pull of Amazon continues to challenge all of retail as they struggle to innovate and morph to keep their businesses and customers from being swallowed into the void.

– Just when e-commerce looks to be the only channel, “Spending growth at mom-and-pop businesses has outpaced that of the big chains in the past 2 years”

– “Companies using print catalogs, cut through email clutter social-media saturation to help differentiate brands, sustain existing customers”

– Stores are finding new life as community spaces with live events attracting “Millennials focused on connection and community”

– Bricks and mortar are re-emerging from the black hole of e-commerce. Bonobos and Warby Parker opened physical stores over the last year and now Everlane has just announced 2 new stores. CEO Michael Preysman said “Our customers tell us all the time that they want to touch a product before they buy it. We realized we need to have stores if we’re going to grow on a national and global scale.”

– Technology continues to create amazing in-store experiences for shoppers with VR and AR.

– AI is helping us find the right clothing for every size. Among the many new developments is Start Today USA with their ZOZOSUIT that captures 15,000 measurements so you can confidently order the right size and fit from ZOZO.

– Those dash buttons will probably change into auto-replenishment, subscription services will become even more valuable as they get to know each customer better, and hotels are going to be IoT showrooms answering our every need at a mere mention.

– Micro-leases are the new legal offering that will fill empty spaces with new startups, seasonal, or experiential offerings.

What this means for business

As if Amazon weren’t threat enough, the industry-blurring mega-mergers of Amazon/Whole Foods and CVS/Aetna has more than retailers paying attention. Every big brand should be thinking about how they can be the business that responds to the entire consumer journey — or risk being eaten up by a business that will.

One thing to remember about change is that even though technology is the new shiny thing, people are still your audience and their need for personal attention, products just for them, fun sensorial experiences, confidence in their purchases and authentic community will never, ever go away. Those retailers that can keep innovating around those evergreen consumer desires will eventually win out.

By Mary Meehan for Forbes 

A new era of retail is coming

On October 25 of this year — on an otherwise quiet day in retail news — Nike chief executive Mark Parker fired a reverberating shot across the bow of the entire retail industry.

He announced that out of Nike’s global universe of more than 30,000 retail partners the brand would, going forward, focus its time, attention and capital on forty — FORTY — retailers that Nike calls “strategic wholesale partners.” Partners, he explained, which are willing and able to build out unique and dedicated Nike spaces within their store environments.

With this one brief announcement, Parker had not only given tens of thousands of merchants around the world a Tony Soprano-style kiss on the cheek, but he’d also made the same sweaty-palmed decision that thousands of other brand CEOs secretly wrestle with on a daily basis: whether to abandon the intoxicating volume of the mass market in a sober effort to save their brands from almost certain ruin.

Barely a quarter goes by that I don’t speak with at least one brand executive awakening to the reality that the reach, ubiquity and market penetration that hyper-retailers, department stores and discounters once offered is now the very thing that is siphoning equity from their precious trademarks. The power-merchants that made these brands household names were now the very things rendering them commoditised hostages in a high-speed chase to the bottom. Once the salvation of many a fledgling brand, mass merchants have increasingly become like kryptonite. In a world constantly seeking what’s next, new or special, mass retail has become toxic in its overexposure. For consumers, to whom shopping experiences matter as much, or more, than products, mass merchants are bringing nothing to the table.

Nike is merely one in a growing list of labels rethinking their distribution strategies. Earlier this year Coach announced it would leave the floors of over 250 department stores. Michael Kors also made a similar decision. And high-end outerwear brand Canada Goose, a brand that has traditionally been sold through wholesalers, now has a long-term goal of generating at least half its profits from its direct-to-consumer business. One by one, brands are fleeing the mass market and their absence will weigh heavily on all mass merchants.

However, more important in Nike’s announcement was the bold declaration that only one tenth of one percent of their retailer network — those retailers who could deliver on the brand promise and experience — were even worthy of the brand’s time and attention. The remainder of Nike’s resources, according to Parker, would be dedicated to growing the brand’s direct-to-consumer business through its owned stores and websites, which currently represent about 30 percent of Nike’s total sales.
In a world constantly seeking what’s next, new or special, mass retail has become toxic in its overexposure.

This is by no means a minor shift. In fact, what it portends is a complete reformation of the retail market and a breakdown of the wholesale-retail model for revenue.

Where today the retail market is largely divided by luxury, mid-tier, and discount, the coming decade will see the market more clearly bifurcate into two distinct retail approaches. The first will encompass an ever-swelling number of vertically-integrated brands that focus on serving individual consumers at scale and in a manner that best befits the brand. The second will be a new class of “experiential merchants” that use their physical stores and online assets to perfect the consumer experience across a category or categories of products. They will define the ideal experiential journey, employing expert “product ambassadors” and technology to deliver customer experiences that are truly unique, remarkable and memorable. So memorable that they leave a lasting, positive experiential imprint on the shopper’s psyche.

The solitary aim of these new-era retailers will be to drive significant sales for their brand partners. But unlike stores of today that are single-mindedly focused on four-wall sales, experiential stores of the future will position themselves as true any-channel hubs. They will serve customers through multiple means of fulfilment that will include their own channels as well as direct-to-consumer sales from their brand partners. Attribution for these sales will matter less than delivering the powerful shopping experience responsible for generating them. And for this, brands like Nike will reward experiential merchants handsomely — not simply with conventional product margin but also with upfront media and agency fees. These experiential merchants will, in essence, be media channels and will be earn revenue as such. Brands like Nike will not be their vendors but rather their clients.

Taken in this context, Nike’s announcement on October 25, 2017 was a profound harbinger of a tectonic shift in the industry. One of the world’s largest brands was not merely communicating a new brand strategy but more clearly than ever before, foreshadowing an entirely new and revolutionary era of retail.

Doug Stephens for Business of Fashion

While some retailers managed to draw crowds and lines on Thanksgiving Day with Black Friday sales, other stores remained almost eerily empty as the holiday-shopping season kicked off.

However, that may not necessarily be bad news for companies banking on a profitable holiday season. On Thanksgiving Day, people spent $2.9 billion online, according to Adobe Analytics.

Here’s a look inside the shockingly empty stores this Black Friday.

Quite a few Targets seemed surprisingly empty, The Street’s Brian Sozzi noted.

“Hmmm not what I expected,” the reality-TV star Tamra Judge posted on Instagram after visiting a Target in California. “First time ever Black Friday shopping. I was so excited to fight the crowds.”

Part of the reason for empty stores could be chalked up to Black Friday sales kicking off on Thanksgiving Day.

As one commenter on Judge’s Instagram post put it: “That ’cause that crowd was there yesterday at 6pm!!! They are all sleeping now.”

However, many shoppers may simply be shopping online instead of visiting physical stores.

Target said on Friday that it had received more than three times the number of orders through its Order Pickup service than it did on Thanksgiving last year — which could explain the empty stores.

Some Best Buys seem to be facing a similar situation.

Though crowds lined up outside the retailer on Thanksgiving, Black Friday seems more tranquil — at least at some stores.

There were also empty Walmart locations, as well as some empty Big Lots.

Shoppers spent $2.9 billion online on Thanksgiving — a 18% increase over last year, according to Adobe Analytics.

Shoppers are expected to spend $107.4 billion online this holiday season, which would represent an increase of nearly 14% over last year, according to Adobe.

By Kate Taylor for The Independent

New venture may shake up shopping malls

Steinhoff Retail Africa, along with partner Shoprite, is set to disrupt the retail market, if they implement plans to own shopping centres.

Shoprite CEO Pieter Engelbrecht said this week: “If you look at all the brands that are currently in the company [Steinhoff] and you add ours, they could be opportunities in real estate where we could open shopping centres just with these brands on their own.

“Once we’ve combined we’ll make such a decision. But it could be a possibility because the combined value of real estate is huge between Shoprite and all these brands within Steinhoff Africa,” said Engelbrecht.

The creation of Steinhoff Africa Retail, known as STAR, will include Steinhoff’s African assets such as Ackermans, Poco South Africa, JD Group, Timbercity and men’s apparel retailers Dunns and John Craig, Pepkor South Africa and rest of Africa, and Tekkie Town, to name a few, and will result in Steinhoff acquiring a 22.7% stake in Shoprite.

Lucrative opportunity

Given the close relationship between Shoprite and Steinhoff, a move to combine the two groups’ own shopping centres could also mean Shoprite’s grocery brands, such as Checkers, Usave, Liquorshop and fast food brand Hungry Lion, could take up space in these shopping centres.
Engelbrecht added that because there was quite a big mix across the two groups, including furniture, food, liquor, pharmacies and electronics, this could be “quite a lucrative opportunity to explore”.

Earlier this month Steinhoff announced the details of the listing of its African and European assets into two companies, which would be listed separately.

This deal comes after a previous attempt to merge the two groups had failed. Under the new transaction, Engelbrecht said, it had panned out that Shoprite would stay “autonomous” and separately listed.

“For us that’s also more exciting as we as management believe that we should operate independently.”

But combining their brands in shopping centres could be one way to extract synergies and savings for Shoprite.

Keillen Ndlovu, head of listed properties at Stanlib, said “rental as a percentage of turnover and sales has been going up particularly in the bigger shopping centres. The bigger centres have been able to attract higher rents over time but unfortunately, the higher rental growth has not been catching up with sales and turnover growth.”

Slowing sales

This meant the cost of occupation for retailers had been rising with the average cost of occupation at 10% of sales as at the end of December 2016 from 8.5% as a percentage of sales between 2004 and 2016, Ndlovu said.

“Given the slowing sales and economic environments in general, this is likely to make it harder for landlords to bargain for rental increases from retail tenants. Therefore, rental growth is likely to slow down,” he said.

For Shoprite’s full year to end-July 2017, the cost of new operating leases rose 9.6% to R3.8-billion from the R3.5-billion in the previous quarter, “mainly due to a net 109 new corporate outlets opened during the year”, the company said.

And for the group that is focused on letting every rand fight for its life, a reduction in costs in the current trading environment will be welcome.

“We must drive our own strategic focus to create value for shareholders, but wherever there are synergies or saving or opportunities that we can share with the STAR group we will not be adverse to it at all,” Engelbrecht said.

Source: Business Live

Back-to-school season has long been a critical sales event for retailers, but 2017 may go down as a year that defies the trends as shoppers play a waiting game for sales.

Kids started back to school this month, but as of early August just 45% of shoppers have checked everything of their list, according to the National Retail Federation’s annual survey conducted by Prosper Insights & Analytics. It’s the lowest number since 2012.

However, 2012 was a record year for back-to-school spending as shoppers indulged in pent-up demand following the spending lull of the Great Recession. In all consumers shelled out a whopping $83.8 billion, according to NRF that year and are projected to spend $83.6 billion in 2017, up more than 10% from 2016.

And 2017 is off to a slow and worrying start. Many began early, according to NRF, researching needed items, perusing online class lists and comparing prices. But traffic has slowed in August and it’s anybody’s guess if it will pick back up.

What are shoppers waiting for? Discounts, suggests Prosper Insights & Analytics (and fellow Forbes contributor) Pam Goodfellow. This trend follows that of the winter holiday season, where consumer play a game of chicken with retailers, waiting and watching prices drop as the deadline gets closer.

In this regard, back-to-school 2017 could be a preview for the holiday season to come. Already, early reports indicate retailers could have a banner winter holiday season, particularly when it comes to e-commerce, where sales are projected to rise some 16.6%, according to eMarketer.

“People are confidently spending more and really spreading out their shopping throughout the season,” Katherine Cullen, director of retail and consumer research at NRF, told Retail Dive in an interview. The association still expects spending to be higher in aggregate this year than last, but with so many waiting, back-to-school is beginning to look a lot like Christmas.

By Laura Heller for Forbes.com 

Retailers across America have been closing stores in droves this year amid years of declines in sales and customer traffic and an increasing threat from Amazon.

So far in 2017, retailers have shut down more than 6,300 stores. UBS says the sneaker retailers Foot Locker and Finish Line could be the next to start closing stores.

UBS’ findings come following Friday’s dismal second-quarter results from Foot Locker that caused shares to plummet by nearly 30%. The company announced earnings of $0.39 a share on revenue of $1.7 billion, both of which were shy of Wall Street expectations. Additionally, same-store sales sank 6% versus a year ago. Foot Locker shares have plunged 57% over the past three months.

On Foot Locker’s quarterly conference call, chairman and CEO Richard Johnson said he wasn’t worried about Amazon. Here’s Johnson (emphasis ours):

“For our part, we will continue to invest in creating compelling experiences for our customers. At the premium end of the market, most of our customers don’t want to just buy a specific product they see on a screen. They want that product to have a connection to an experience they find meaningful and want to participate in. That experience could be a special event in a store, being notified of or discovering a video on our website or YouTube channel of an athlete or celebrity wearing or discussing the latest product, an interaction with their friends while touching and feeling the product, or simply a conversation about sneakers with one of our stripers or other store associates. For that reason, we do not believe our vendors selling product directly on Amazon is an imminent threat. There is no indication that any of our vendors intend to sell premium athletic product, $100-plus sneakers that we offer, directly via that sort of distribution channel.”

But in a note sent to clients on Monday, UBS analyst Michael Binetti downgraded both Foot Locker and Finish Line and said it’s “almost certain” that the sneaker retailers would lose market share to Amazon. He lays out three reasons he thinks things are about to get a lot tougher for the industry.

First, Binetti sees Nike stepping up its efforts to push sales directly to the consumer. That is especially worrying for Finish Line, which, according to Nike’s October 25 analyst day, sees 68% of its sales come from Nike. Binetti adds, “For Foot Locker in particular, while many of its stores are among the most compelling retail experiences in our US specialty coverage group, we think the company will have to significantly accelerate closure of its lower tier stores to properly absorb market share shifts to the brands own DTC businesses (and to Amazon).”

But the sneaker retailers’ problems don’t stop there. It appears consumers are now choosing to buy their Nikes on Amazon versus going into brick-and-mortar stores like Foot Locker and Finish Line. “UBS Evidence Lab survey shows that in ’17 for the 1st time, more consumers prefer to buy Nike on AMZN vs at FL,” Binetti wrote.

There was a “significant YOY increase in the percent of consumers who prefer to buy Nike product ‘on the brand’s own website,'” Binetti notes. “The combination of an accelerating shift of purchase to both Amazon and the brands’ own website — and the subsequent reduction in purchase intent through athletic specialty retailers like Foot Locker — makes it hard to see the path back to accelerating market share gains for Foot Locker.”

Finally, both Foot Locker and Finish Line have a large presence in malls that have lost the anchors Macy’s and J.C. Penney.
Specifically, Binetti says, “We think FINL is at particular risk (more so than FL anyway) of further deterioration in sales & traffic trends in its stores due to high exposure to lower-tier locations.”

As a result, UBS downgraded Foot Locker from “buy” to “neutral” and Finish Line from “neutral” to “sell.”

By Jonathan Garber for www.businessinsider.com

How Zuma killed Stuttafords

Stuttafords officially closed its doors on Monday, 31 July after 159 years of operating in the South African retail market.

The retailer filed for business rescue in October 2016, after it could not recover from the pressures of the low growing economy and the significant devaluation of the rand following the axing of former Finance Minister Nhlanhla Nene.
A final bid to buy the last two operating stores in Sandton and Eastgate was rejected by the landlord, Liberty. Chief executive Robert Amoils told Fin24 that all staff at the two remaining stores will be retrenched and have their full retrenchment packages paid.

The business is currently undergoing a winding down process which will take a few months to complete. A sale of Stuttafords intellectual property is being finalised by the business rescue practitioners.

Amoils had explained to Fin24 that the business had been on the right path, but simply ran out of time to correct things. “I believe the path we set was correct. I believe the repositioning we did was consistent with what international trends have shown to work,” he said.

“Simply, we ran out of runway, we ran out of time. The market downturn was so swift, so severe and was paralleled with significant [rand] devaluation and political uncertainty.”

Amoils explained that the rand devaluation impacted the business model negatively because commitments were made to buy international brands almost a year in advance. But director at Norton Rose Fulbright and senior insolvency lawyer Haroon Laher said that the downfall could not be pinned down to the economy only.

“I think there were a number of factors. There was a lot of tension between the shareholders which obviously is tension in the house, so to speak. That did not contribute to a successful business rescue.”

Stefan Salzer, partner and managing director at Boston Consulting Group said that generally the retail sector is under pressure. Particularly in recessionary conditions consumers tend to cut down on spend for discretionary items such as clothing, household appliances and furniture.

“It is tough not to buy food but it is very easy not to buy a TV or buy the latest fashions from Stuttafords,” he said.
Salzer explained that over the past two to three years international clothing retailers had been entering the market, posing another complication for Stuttafords. Amoils previously told Fin24 that the arrival of international players like H&M, Zara and Cotton On had cut into their customer base.

That, coupled with increasing financial pressures on consumers and changing credit regulations did not contribute positively to the environment for clothing retailers, said Salzer.

Indeed, the devaluation of the rand impacted Stuttafords profits, he explained. An item that cost $3 would end up costing more at a later stage due to the sensitivity of the currency. This cost could be borne by the consumers, in the final price charged for the item, or the retailer would have to carry the expense and let profit take a knock.
Stuttafords purveys international brands and this set it in a disadvantage to other local retailers which rely on South African produced and sourced products, explained Salzer.

International players
Salzer said that international players are also clear on what they are, and on what they are not.
These retailers also differentiate between “basics” and fashion items and price these accordingly. For example a basic white T-shirt would be just that. Contrarily South African retailers would sell a “basic” white T-shirt with some print on it. Additionally, South African retailers often do not match pricing for basic and fashion items appropriately. Something considered basic, would be priced as a fashion item.

Local retailers also need to adopt fashion faster as international retailers do, he said. International retailers also have the advantage of scale, they have access to global brands at larger volumes.

South African retailers should also learn to introduce a “theatre of shopping” to inspire people to buy. Some retailers just put items on shelves, which is not as inspiring as having a styled manikin, he explained. A consumer could walk into a store with the idea to buy a T-shirt but then leave with a dress because the product was represented in an emotive and inspirational way, said Salzer.

International players also follow a different model when it comes to planning and buying merchandise, explained Derek Engelbrecht partner and consumer products and retail sector leader at EY. Global brands have a sense of urgency and frequency with which they change offerings.

“That is probably one of the key reasons the department store has battled. In gold old fashioned department store planning, the business would put new things on the shelf when the seasons change.”
“Global brands have worked hard and long to perfect the model where they are able to put items on the shelf every four to six weeks,” he said.

Develop a niche
Globally, the department store is facing challenges, explained Salzer. The way forward is to develop niche or specialist stores. Given South Africa’s mall culture, retailers do not necessarily have to stock all kinds of items under one roof, when a consumer can get these products a few meters away in a different store.

Salzer added that if some retailers still want to diversify their offerings, they need to be clear on the overall theme they are offering, like quality, convenience or affordability. For example a retailer could offer clothing items and cars, if the overall expectation of the offering was quality.

Engelbrecht explained that retailers can no longer be all things to all people. “If you follow approach of being all things to all people at some point your customer will leave you,” he says.

“If you identify the niche or the consumer you are targeting, while it may not appeal to all people, at least you are guaranteed that you created something unique. That is probably where the slow demise of the department store as a concept comes from.”

Engelbrecht also pointed out the importance of retailers adapting to the world in which they operate in.
Before entering business rescue, Amoils said Stuttafords had managed to reposition itself as a provider of cutting edge fashion and offered affordable branded luxury. The customer base was also more reflective of the South African consumer, with over 60% of Stuttafords’ market being black. The group also started focusing on targeting younger, tech-savvy consumers. “We perpetually evolved and I think we did a good job in the last five years,” says Amoils.

By Lameez Omarjee for Fin24

Brave new world of retail bad for workers

South African grocery retailers are taking their cue from global players, and as a result the retail workforce may be under threat as technology continues to rattle the sector.

About three years ago the biggest retailer in the world, US-based Walmart, embraced smaller-format stores as its superstores began falling out of favour with customers, and signalled it would employ a more rationalised workforce.

This year, the group announced a further reduction in staff as it focused more on e-commerce business. About 18 000 people lost their jobs out of a workforce of 2.3 million employees globally.

Similarly, UK-based retailer Tesco cut 1200 staff jobs in its head office after cutting 1 100 jobs in its call centre.

Walmart competitor Amazon has only 34400 staff, although it said in January it expected to add 100 000 people to its workforce in the next 18 months.

Andre Roux, head of the future studies programme at Stellenbosch University, said technology had been a significant disruptor in recent times, but several other issues were influencing the way companies were seeing the labour force.

“Robots can work for up to 40 days in a row for 24 hours a day”.

Robots would gradually replace human labour, he said.

“No one owes anybody a job. There’s no entitlement. You are only going to be employed if you can make an efficient contribution,” said Roux.

The fastest-growing employment was self-employment, as opposed to working for one organisation for many years.

“The whole idea of cradle to grave or womb to tomb is becoming more and more outdated,” Roux said.

“In the future, people will probably work for 20 or more organisations during their careers – just a couple of years at a time.

“That has implications for how one builds up one’s pension fund. It becomes one’s own responsibility.”

But in a country such as South Africa, which was part of a developing region, there was a disjuncture between adopting first-world ways of doing business on the one hand, and dealing with issues such as an unskilled labour force on the other.

“Although we are a developing country, these days you’ve got to be as good as the best.

“We have to follow new trends but at the same time be aware of our own unique challenges.

“As it is we have a surplus of unskilled labour and a shortage of appropriately skilled labour.”

According to the Quarterly Labour Force Survey, South Africa’s unemployment rate was 27.7% in the first quarter of 2017, the highest unemployment rate since September 2003.

In the current retail climate, Pick n Pay’s self-service checkout points may be the biggest threat of all to labour.

Bones Skulu, general secretary of the South African Commercial, Catering and Allied Workers Union (Saccawu), said the union was challenging the installation of self-service checkouts.

It would continue calling on workers to embark on industrial action in response to technology that had the potential to replace labour.

He added that Saccawu was expecting further job cuts by Pick n Pay across various divisions.

For those on the shop floor, the changes are telling. Perceptions among staff are that more work has to be done by fewer people.

By Palesa Vuyolwethu Tshandu for Business Live

Consumers travel far and wide for bargains

People are deserting retail stores’ butchery aisles, cutting out the middleman and turning to buying meat in bulk. Seemingly, it is proving to be a great saving.

“If I were to buy the same amount of meat at retail stores, I’d need a loan the following day, meat is so expensive,” says Bongani Qansane, of Germiston, who spends R1,500 a month on meat.

“Once a month I make the trip to Heidelberg.

There’s an Eskort butchery where I get my pork cheaper than at retail shops, and I go to a Karan Beef butchery in the same area for beef and mutton. It’s great value for money.” Sipho Dube teams up with a friend to buy wholesale.

“I spend R400 a month and an additional R40 for fuel so I’m saving big time.”A mother of two says she travels close to an hour with her friends every two months to Eskort.

“We buy and freeze,” she said, estimating that she spent 40% less than she would pay in retail shops. “Not only is the meat cheap, it’s fresh. I’m glad I made this decision.”

Pieter Prinsloo, of the Red Meat Producers’ Organisation, said last year’s drought contributed significantly to the increase in meat prices. He said meat was more expensive at retail shops because “its convenience shopping”.

“If you take lamb, for example, you can buy it wholesale for around R70 a kilogram. The cheapest at a retailer would be about R99 a kilogram.

“You can buy beef wholesale from a farmer for R48 a kilogram. That will give you a 30% saving,” he said.

Zeyn Adrian Jenkins, of Durban, said he paid around R350 for 10kg of chicken quarters in Durban. “It’s R200 in Pietermaritzburg and Port Shepstone.”

For six Soweto women, bulk buying allows them to keep meat on their tables for longer.Thoko Nkosi explained that they put away R150 a month for 11 months. Come the festive season, they can afford to stock up on meat.

“Last year, we were able to buy a beast for about R6,000 and we told the butcher how we wanted it cut. We all walked away with different cuts of meat — from rump steak to T-bone steak, ” Nkosi said.

“If I hadn’t joined the group and I walked into a [retailer] with R1 600, I would only get enough meat to last me about two months.”

The Times found stewing beef at a City Deep wholesaler in Johannesburg was priced at R65.95 a kilogram. Pick n Pay sold it for R79.99. It went for the same price at Spar and Checkers sold it for R10 more.

A kilogram of brisket was sold for R65.95 at the wholesalers, for R87.99 at Pick n Pay, R92.99 at Checkers and R98.99 at Spar.

An Alberton butcher said it was important to note that it was not only the price of meat that could differ from one place to another but also the cut and grade.

Source: Supermarket & Retailer

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My Office News Ⓒ 2017 - Designed by A Collective


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