Tag: supermarkets

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“The whole idea of cradle to grave or womb to tomb is becoming more and more outdated,” Roux said.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

South Africa’s recession means households had less and less to spend, but the number one supermarket group in the country, Shoprite, is adopting an unlikely strategy: targeting upmarket shoppers.

Lower-income families who formed Shoprite’s core customer base were cutting back on spending, but the wealthy remained undented by the economic downturn.

In a bid to retain its leading industry position, the discount retailer’s new boss was driving business hard into the higher-margin niche dominated by rival Woolworths.

The stage was set for a turf war to win the hearts, minds and wallets of South Africa’s richest two million households — and ultimately, pre-eminence in the supermarket sector.

Shoprite CEO Pieter Engelbrecht told Reuters that growth lied in affluent areas and customers.

“A lot of those (wealthier) customers, two million of them, actually frequent our stores already, but not exclusively,” he said in an interview.

“Our job is to get a better share of their wallets when they are in our stores and then impress them so that they come back again.”

Shoprite was doubling its offering of the kind of high-end convenience foods that Woolworths built its reputation on – from gourmet lamb shanks and oxtail stew to teriyaki-and-ginger basted pork ribs.

Its range would reach around 500 products by the end of this year, Engelbrecht said.

These products typically cost about R200 for a meal for four — 10 times the minimum wage of R20 an hour as set by new labour laws making their way through Parliament.

As part of the drive to expand its range, Engelbrecht said Shoprite had upgraded its food technology and development facilities, and gone on a hiring spree for food developers and technologists.

The company planned to open 23 new outlets of its higher-end Checkers chain of stores, mostly in wealthy suburbs such as Waterfall City north of Johannesburg.

New Checkers stores and established ones that had been refurbished resembled Woolworths outlets with sparse lighting and wood-panelled sections boasting extensive wine and gourmet coffee selections, as well as counters selling quality selections of cheese and meat.

‘I love Woolies’

But how will Woolworths defend a market that delivered handsome profits for the company?

When asked about Shoprite’s push into upmarket convenience food, Woolworths said that it had an “incredibly valuable emotional connection” with its customers.

“Retail is a dynamic environment and the competition in the grocery and food market category means that we will always keep a watching brief on our competitors’ activities,” it added.

“We conduct weekly basket checks against the prices of competitors to ensure that our prices are comparable.”

It was a tall order for Shoprite to break Woolworths’ stranglehold.

“They (Woolworths) have been good at introducing new products and other innovations in line with consumer trends and feedback,” said Old Mutual Invest food retail analyst Kaya Nodada.

If Shoprite was to prevail, it would have to win over shoppers like JF Fourie.

“I love Woolies. The microwave meals are a bit overpriced, but they are tasty,” the 28-year-old who works in marketing said in the Woolworths branch in eastern Pretoria as she added shimeji mushrooms to the baby brinjals in her basket.

Fourie – a big fan of Gordon Ramsay – said she would need some convincing about the quality of Shoprite’s products, but would give it a go because Checkers adverts feature the British celebrity chef.

“I like the chef and he hates airplane food,” she adds.

“He’s fussy and I am too.”

 

http://www.supermarket.co.za

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My Office News Ⓒ 2017 - Designed by A Collective


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