Tag: stores

MTN South Africa to sell off branded stores

Source: Telecom Paper

MTN South Africa employees have expressed fears the company’s move to sell off its stores will result in them losing their jobs, a report form ITWeb has revealed.

Already, an employee representative, who opted to remain anonymous, contacted ITWeb alleging the mobile operator was looking to sell off its stores and in the process “dupe them into joblessness without proper consultations” with the workers at these facilities.

MTN denied the retrenchment accusation but confirmed there are plans to sell stores. Employees will be transferred to new employers at their current total cost to company packages, for a minimum period of twelve months.

Jacqui O’Sullivan, executive for corporate affairs at MTN said the company’s objective with this project is not to close stores, but to grow the company’s store footprint and BBBEE ownership of MTN stores.

The plan will see MTN increasing its number of stores in the coming two years, creating businesses for new owners and job opportunities for new store employees.

Edcon Holdings is making progress toward securing R3-billion in funding need to keep the South African clothing retailer afloat for another three years, according to Business Day.

The Public Investment Corporation (PIC), Africa’s biggest money manager, may provide R1.8-billion to assist the company. In addition,  landlords may contribute another R700-million in reduced rent, and Edcon’s banks about R500m, they said.

Meanwhile, according to an article by MoneyWeb, Edcon aims to take the following steps in a bid to downsize:

  • Reduce the size of its Edgars store in the Johannesburg CBD by a third
  • Close down its big Melrose Arch store
  • Reduce its footprint at shopping centres across the country
  • Reduce regional footprints in centres such as Mall of Africa, Eastgate and Gateway
  • Continue with closing smaller stores across the country (115 have been closed to date)
  • Downsizing several stores
  • Continue to reduce retail space – in 18 months, Edcon has already downsized by 7%
  • Reduce space nationally by 5% – 7% per year over the next few years

Edcon is one of the country’s biggest employers. It has 1 200 stores which employ approximately 30 000 permanent and casual workers.
Over 100 000 jobs are supported by the company when clothing suppliers and other service providers are included.

 

By Suman Bhattacharyya for Digiday 

As a growing number of people go to Amazon to buy office supplies, Office Depot is trying to find another use for its nearly 1 400 physical stores. One it’s testing: Transforming them into co-working spaces.

The company is testing the concept through a Los Gatos, California-based “Workonomy Hub” it opened in August. Inside it, a 5 000 square-foot co-working space includes open “hot desks”, closed offices, a lounge with a Starbucks kiosk, and an online-order pickup and shipping area. It’s an effort to repurpose empty store space as a co-working and business-service hub — and a place businesses can learn about and take advantage of consulting services that cover marketing, business development and staffing.

“The traditional retail model is highly focused on convenience, and making one sale today; we have that as a component of our business, but we want that longer-term relationship with the customer,” said Kevin Moffitt, chief retail officer at Office Depot.”[Small-business] customers are already coming to us for marketing services, print services and tech services, and for us, it’s a natural adjacency to the products and services we already offer.”

The repurposing of vacant retail space for service and co-working offerings is a trend across the industry. Malls are opening up unused space to shared workspace providers and startup incubation programs. Meanwhile, traditional retailers are redesigning store spaces as service hubs. For example, Staples last year partnered with co-working startup Workbar to roll out co-working spaces with happy hours and slick modern designs.

The trend is also going another way, with industry heavyweights like WeWork adding ancillary services to support small businesses, including, most recently, ad agency-style marketing services.

Office Depot, which has seen services as a portion of its Business Services Division revenue grow 28 percent year over year, sees co-working spaces as a customer acquisition channel for its services offerings. It’s using its connections with community groups, along with its capacities to advise businesses on both strategy, as well as tech, as differentiators against businesses wholly dedicated to co-working.

“Our approach is that it’s everything you need under a single roof with support from dedicated specialists and associates,” Moffitt said.

Office Depot declined to comment on whether the Los Gatos Workonomy Hub is profitable, but the company said it’s considering other markets in which co-working spaces would meet demand. The company’s CEO Gerry Smith, however, recently told investors early results from the co-working space are encouraging, driving higher sales for services and products compared to the average store.

To help meet the demand for service offerings, Moffitt said Office Depot has access to thousands of trained service staff the company inherited from its CompuCom acquisition last year. Despite the fact that consulting staff can be expensive, he said Office Depot is making a longer-term play for customer loyalty, which can be underpinned through connections made at co-working hubs.

To industry watchers, Office Depot’s foray into co-working is illustrative of the growing demand for shared office spaces as gig economy workers seek flexible workspace in crowded, expensive metropolitan areas. Charlie Robinson, svp for the U.S. at Servcorp, a global provider for shared office space, said for shared workspace providers, the landlord model isn’t enough of a longer-term strategy for sustainability.

“You don’t want to only be in the rent arbitrage game — over 50 percent of our revenues come from other services,” he said.

Online shopping grows in SA

By Joseph Booysen for Business Report

Although traditional retail stores dominate the South African market, consumers are choosing the online option for cheaper technical goods purchases.

According to the latest research report by GfK (Growth from Knowledge), South Africa, E-commerce 360:Navigating the Technical Goods E-Commerce Market in South Africa, e-commerce retailers grew their share of the South African technical consumer goods market by 52 percent last year, accounting for 6.9 percent of total consumer spending by rand value for the year.

This meant they had nearly doubled their share of the market since since 2015.

Cherelle Laubscher, a senior retail manager at GfK South Africa said e-commerce in South Africa was still in its infancy compared to European markets, where a quarter of technical goods spending goes through digital channels.

“However, growth in South Africa is strong and shows no signs of declining as bargain-seeker flock online to buy technical consumer goods like smartphones, IT, consumer electronics, and major home appliances,” said Laubscher.

She said although traditional stores dominated the market, they were not growing the value of the sales they generated in technical goods as quickly as the digital players and e-commerce retailers were seeing strong growth in smartphones, panel televisions, small domestic appliances, gaming consoles and laptops.

According to the report, survey respondents cited better prices, attractive promotions and wide product selections as major reasons for shopping online rather than at at a traditional store, while by contrast, experiential factors such as getting to see and feel goods motivated shoppers to go to physical stores.

GfK South Africa’s point of sale data showed that the consumer perception that e-commerce prices were lower than in-store prices was accurate. More than two-thirds of the top 100 sellers among technical goods products in South Africa were cheaper through digital stores that at physical retailers.

Across the top 100 products, online prices were an average of 4.7 percent cheaper.

Odette Jardim, a client solutions manager at GfK South Africa, said 45 percent of connected consumers in the survey claimed to increasingly use the internet to buy products online compared to the previous year (2016).

“However, a consumer journey often straddles both physical and digital channels, meaning that the most successful retailers should have an omnichannel strategy,” said Jardim.
Meanwhile, Kevin Tucker, PriceCheck chief executive, said although South African consumers might be lagging in the amount of online shopping they did compared to the US, for instance, with increased innovation and tech security, South Africa would continue to see growth.

“South Africa has seen a boom in cutting-edge e-commerce innovation, and this needs to be celebrated,” he said.

Tucker said although the e-commerce industry had grown by 25 percent in South Africa, only 1.5 percent of online consumers ended up making a purchase.

“Online spending in South Africa is expected to reach R53 billion by the end of 2018, up from R37.1bn in 2017, according to research conducted by PayPal. There is clearly huge untapped potential in this industry,” said Tucker.

Stationery specialist WHSmith is trialling a range of new store concepts in key locations as it moves to bolster sales at its high street division.

The retailer kick-started the high street trial by fully refurbishing its store in Holborn, London.

The revamped branch now dedicates more space to stationery and stocks headphones and Apple accessories.

WHSmith chief executive Steve Clarke told Retail Week that the improvements form part of an experiment.

“The store in Holborn is a trial for us to see, if we improve the store environment, radically change the layout and improve the ranges, what sort of a return on that scale of investment we get,” he said.

He added that the 225-year-old retailer would carry out other additional trials “of different types” in the coming months.

“From those we hope to cherry-pick a number of initiatives that are affordable to roll out,” he said.

Far-flung regional stores

Clarke insisted there is ongoing investment into the rest of WHSmith’s 613-store high street estate.

“We do tend to target investment where it matters most to customers”

“We have a rolling improvement programme. Over the last three years we’ve probably replaced or repaired around 300 floors, and have done a lot of work on our storefronts,” he said.

But not every store will receive an immediate or radical facelift.

“We will target the investment where we think we will get the biggest return and where customers respond to it the most,” he explained.

“There will often be stores in far-flung regional high streets where the store could do with a little bit of an upgrade, but they are not desperately out of the context of their environment.

“We do tend to target investment where it matters most to customers. We will eventually get around to all the stores, but in a very sensible, measured way.”

Overall performance

Clarke said that the business was very pleased with its half-year performance on the high street, where profits were flat and like-for-likes were down 3%, as it came off the back of its “best Christmas in 20 years”.

“We had a profit upgrade last year. Given the living wage and everything else, holding flat is a really good outcome,” he said, adding that he expected like-for-likes to decline as the adult colouring book phenomenon died down.

“We’re feeling pretty confident about the year ahead despite the broader uncertainty,” the stationery boss concluded.

By Emily Hardy for www.retail-week.com

The Back-to-School (BTS) season is officially underway in the United States, and more than one-third (34%) of consumers have already begun shopping, according to the International Council of Shopping Centers’ (ICSC) BTS Consumer Spending Survey.

Consumers still prefer physical stores for BTS shopping, with 83% of their purchases involving physical stores, including 7% of purchases that will be made online and picked up in-store. Of those who will order online and pick-up in-store, 79% said they are likely to buy additional items once in the store.

Driving in-store BTS purchases in 2015 are the 42% of respondents who still prefer the opportunity to physically examine merchandise before purchasing, while 37% like the convenience of one-stop shopping. The importance of omnichannel continues to grow significantly, as 79% of respondents plan to use a mobile device while shopping in-store for BTS.

Of those planning to use a mobile device while shopping in a physical store, 44% will use their phone to compare prices, 28% will use digital coupons, 26% will check ratings and reviews, 24% will check inventory and availability of items and 17% will email or text friends and family for a second opinion on an item. As expected, millennials are the most likely demographic to use their smartphones while shopping.

“Retailers are enjoying a strong start to the BTS shopping season after a sluggish first quarter of 2015,” says Jesse Ton, spokesman for ICSC. “While typically viewed as an essential expenditure, BTS shopping also highlights many of the trends occurring in the shopping center industry. As physical spaces merge with digital to further enhance the omnichannel experience, consumers are shopping in physical stores, participating in webrooming and using mobile technology at shopping centers. It’s good news as we progress into the all-important latter half of the retail calendar.”

The share of consumers expecting to spend more this year increased significantly year-over-year to 67%, compared to 50% of shoppers in 2014 and 39% who expected to increase spending in 2013.

When discussing why consumers plan to spend more this year, 29% of respondents stated it was because of a need to replace wardrobes and school supplies, while 30% cited a change in school requirements. Additionally, 12% of respondents plan to spend more to keep up with changing fashion trends.

BTS shoppers are planning to buy a variety of products, including school supplies (76%), apparel and shoes (75%), electronics – including computers, phones, accessories and wearables (53%), backpacks and bags (45%) and eyeglasses (22%).

Marketing, deals and trends drive BTS shopping

Marketing appears to be the main driver of BTS shopping, as 74% of consumers report that they will likely start BTS purchasing when advertisements from major retailers begin to appear. While those cues from advertising play a major role in consumers’ decision to start BTS shopping, the survey found that nearly half (46%) of consumers believe they will get the best deals in August, compared to 30% in July and 15% of respondents who believe the best deals will be found Labor Day weekend or in September.

The results show August leading the BTS season, with 53% of BTS spending taking place in late summer, and the remainder of shopping split between June (10%), July (21%) and September (17%).

Discount retailers prevail

ICSC found that discount stores are still the leading BTS shopping destination, with 77% of consumers turning to discount retailers for their BTS shopping needs. Another of this year’s winners is apparel stores, where one-quarter (25%) of consumers plan to shop this season.

Overall, BTS shoppers plan to shop at a variety of store types that also include office supply stores (40%), online-only retailers (29%), department stores (38%) and wholesale clubs (22%). Only five percent of respondents indicated they would use catalogues.

When choosing a retailer, the top three factors indicated were price (76%), convenience (48%) and quality (41%).

Beyond a place to shop

The survey found that most BTS shoppers (88%) plan to go to a mall or open-air shopping center during the BTS season, and many will do more than shop. More than half (53%) of shoppers surveyed plan to dine at the food court and nearly one-third (30%) plan to eat at a table-service restaurant, while 28% will see a movie and 17% will attend an event such as a concert, go to the gym or do an activity such as bowling.

Source: www.businesswire.com

A seismic shift has occurred in stationery that appears to have left newsagents behind – even newsagents with good stationery sales.

Understanding the shift starts with and understanding of what constitutes stationery. To many newsagents, the definition of stationery is traditional: pens, pencils, rulers, tape, pads, folders, the types of items you would have seen in a stationery department ten and twenty years ago.

To understand stationery today we need to ask shoppers what they consider to be stationery. We also need to look at what other businesses are marketing as stationery.

The shopper definition has changed. Sure, the old-school everyday items such as pens, pencils, rulers and the like are considered to be stationery. There is also a more relevant to today range, like you see in Smiggle, Kikki.k and Typo – what we typically call social stationery but what shoppers call stationery.

I am sure there are shoppers visiting a newsagency today and walking out because they are not seeing Typo or Kikki.k type products.

Do a Google search for stationery in any major city and you will see Typo, Kikki.k and even Smiggle come up in search results. These businesses that many newsagents do not consider to be direct stationery competitors are coming up in search results. They are positioning themselves as newsagent competitors.

While many newsagents have focussed on the traditional and see flat and falling sales, growth in this new segment of the stationery marketplace has been rapid. More stores have opened and they have got better in terms of ranging and pitching.

Smiggle, Typo and Kikki.k have been educating shoppers and it is paying off.

Talking to someone from a mid-size business earlier this week, the admin person responsible for stationery has permission to purchase desk supplies from Typo because it makes the staff happier. While that is only one story, it is an example of the seismic shift I am talking abut.

Where are newsagents and their traditional suppliers in this? While some are engaged, that engagement is nowhere near the scope I see from our competitions, those leading shoppers to re-think what constitutes stationery – like Typo and Kikki.k.

For us to be relevant in this new world of stationery we need a fresh offer in-store. This comes from fresh products, fresh ins-store placement, fresh out of store marketing. Most of all, it starts with us redefining for ourselves and those in our business a fresh approach to stationery.

We can do it. Some of us are. But not enough for newsagents to be top of mind for the shopper out there heading to Typo or Kikki.k for their next stationery purchase.

By Mark Fletcher www.newsagencyblog.com.au

Last week the US government received information that terrorist groups were planning to carry out near-term attacks against places where US citizens congregated in South Africa, such as upscale shopping areas and malls in Johannesburg and Cape Town. This information was later discovered to be from a discredited source. News24 reported that the source of the information the US acted on was an East African businessman living in South Africa who wanted money for the tip.

“A source with access to South African intelligence says‚ however‚ that the businessman was believed by South Africa to be a ‘discredited’ informer who was only after the money he’d be paid for the information‚” it says.

Director of the Terrorism‚ Research & Analysis Consortium in Southern Africa, Jasmine Opperman, says that if this was the source of the information‚ its credibility must be tested.

She adds that the US now has a responsibility to come out and prove that the information was gathered from credible sources.

“When I saw the initial statement [from the US] my gut feeling was‚ ‘this is an intercept’‚” she says.

According to Opperman the information might have been intercepted from communication channels‚ such as social media networks‚ between two parties.

If this is the case‚ a question of reliability must be raised as the identities of the parties may not be known to intelligence officials. Intercepted information must therefore be verified by a human source‚ she says.

Opperman also says that an East African businessman communicating from South Africa was not far-fetched‚ but that the terrorist organisation was off‚ as Al Shabaab was the most active terrorist organisation in that region.

“How does a guy from east Africa communicate on Islamic State? ISIS (Islamic State) is the flavour of the month in any intelligence agency … Information peddlers are the greatest risk. People will come up with any information because an intelligence service is more than likely to pay for it.

“Information peddlers present information in a context that is well known and then fabricate the rest.”

State Security Minister David Mahlobo on Monday assured South Africans that there was no immediate danger and no need to fear an Islamic terror attack.

Opperman agreed‚ saying there was no evidence that an attack on SA soil was being planned.

Shoppers unfazed by talk of terror
It appears to be shopping as usual for South African consumers despite the alerts issued by the US, Britain and Australia of possible terror attacks at Johannesburg and Cape Town shopping malls.

Listed property funds Hyprop, Growthpoint and Redefine reported on Friday that they had not been able to pick up any change in consumer behaviour.

Pieter Prinsloo, the chief executive of Hyprop, confirmed that they had a few telephone calls from customers raising their concerns and were “dealing” with those inquiries. He says security at Hyprop’s malls had been placed on high alert, particularly for any suspicious packages and behaviour, but it had not picked up any slowdown in trading in its malls.

Hyprop’s malls include Canal Walk in Cape Town and Rosebank Mall, Clearwater Mall and Hyde Park Corner in Johannesburg.

Malls up security
Estienne de Klerk, the MD of Growthpoint Properties, says there was insufficient time since the alerts to get any credible feedback about any change in the behaviour of shoppers.

But De Klerk stressed that Growthpoint took the alerts very seriously and had, for instance, called a special board meeting of the Victoria & Alfred (V&A) Waterfront investment company to ensure they were satisfied with the measures taken to ensure patron and shopper safety. Growthpoint owns 50 percent of the V&A Waterfront, with the Public Investment Corporation owning the balance.

De Klerk says across the board Growthpoint had contingency plans in place and had introduced additional security.

“It’s not something we can or should ignore and is clearly another headwind for the industry that we don’t welcome. South African shopping centres are part of the urban fabric and a place of pleasure for families and nobody wants to see anything go wrong.”

Growthpoint owns 58 retail properties valued at about R28,2-billion.

No noticeable slowdown in trading
Andrew Konig, the chief executive of Redefine, says there had not been any noticeable slowdown in trading at its retail centres, but it was something that was hard to gauge.

“I can’t say we’re anticipating any significant change to shopping behaviour as a consequence of the alerts. As a responsible owner of retail properties we have a duty to take reasonable measures to protect shoppers and tenants. We are proactive in this regard and liaising with the relevant authorities and our own security,” he says.

By Roy Cokayne for www.iol.co.za; Roxanne Henderson for www.bdlive.co.za

Staples has announced a new way to make better use of its cavernous stores at a time of shrinking shopper traffic: turning some of that square-footage into office space.

The office supplies giant said that it was collaborating with office-sharing startup Workbar to open communal workspace at three of its stores in metro Boston in a pilot. Workbar runs a network of locations with desks and conference rooms that subscribers can use for a monthly fee.

Each of the 2 500 to 3 500 square-foot Workbar facilities will have workspaces, conference rooms, private phone rooms, and wifi access. The average US Staples location is 20 000 square feet in size.

The move is just the latest by big box retailers looking to find new uses for all their store space at a time more shopping is moving online.

For instance, Macy’s has shops run by sports apparel retailer Finish Line and is testing out a similar idea with electronics retailer Best Buy. Sears has rented out parts of stores to everyone from Whole Foods Market to Dick’s Sporting Goods.

Staples is struggling with a declining retail business. It said last month it would close 50 of its 1,607 North American stores this year, after shutting 242 others in the two previous years. Staples is also trying to convince the government to let it buy Office Depot to fend off growing competition in the office supplies area from Amazon.com.

It recently re-named its business services division Staples Business Advantage from Staples Advantage to prop up that part of its business, which in contrast to the retail division, is growing.

Business services now generate 40% of company sales, compared to 35% in 2013. What’s more, Staples’ North American B2B unit is far more profitable and looks set to surpass the retail division in the next year or two.

Many of Staples’ stores have much more space than they need, now that people are buying more and more office items online.

By Phil Wahba for www.fortune.com

Office supplies retailer Office Depot is seeking to cut costs amid intense competition in the office supplies business.

According to Office Depot’s latest annual report, it will shutter about 50 stores in the US this year. Last year, the company closed 181 stores following the exit of 168 locations in 2014. As part of its buyout of rival Office Max in 2013, Office Depot said it would close at least 400 stores by the end of 2016. The closure of 50 stores this year will effectively bring Office Depot to its goal.

Fewer stores in operation has also led to a consolidation of Office Depot’s supply chain. Through the end of 2015, the integration of Office Depot with Office Max has resulted in the closure of eight distribution centres and cross-dock facilities across the country.

At the end of 2015, Office Depot operated 1 564 retail stores in North America. The company boasted 45 distribution centres and cross-dock facilities in the United States and Canada.

Office Depot’s bottom line has definitely been boosted by it shedding costs related to running stores such as rent, hourly wages and shipping.

Operating profits adjusted for one-time items amounted to $460-million in 2015, up from about $99-million in 2013. Since closing its deal for Office Max on 5 November, 2013, shares of Office Depot have been relatively unchanged, compared to an 8% increase for the S&P 500.

But if Staples’ (SPLS – Get Report) impending buyout of Office Depot does not gain regulatory approval, Office Depot may be forced to close even more stores in 2017 to jump-start its profits (and stock price) again after a year of disruption.

Fourth quarter earnings excluding one-time items came in at 7 cents a share, unchanged from the prior year, and fell short of Wall Street estimates of 11 cents. Same-store sales were also unchanged year over year. In the third quarter, same-store sales increased a solid 3%.

At the company’s business solutions segment, which primarily ships office supplies under contract to businesses, sales declined 6% when excluding the impact of the strong US dollar. Office Depot attributed the sales drop to “substantial business disruption” related to the pending acquisition by Staples.

By Brian Sozzi for www.thestreet.com

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