Tag: stores

Source: News24

Shoprite has decided not to reopen six of the 231 stores that have been “significantly” damaged during the civil unrest in KwaZulu-Natal and Gauteng in July.

Some 83 stores remained closed, with 47 of these stores “significantly impacted by fire”.

“[The] process of reopening for these stores will be mixed: some may open in the coming months, some may take a year, others will require new premises,” the group said.

In a presentation, Shoprite CEO Pieter Engelbrecht said that the group managed to reopen some stores that were “completely destroyed” within six days.

Unrest damage will be covered by insurance, and Shoprite already received its first payment from the state insurer Sasria. But some costs, including additional security at other stores during the unrest, can’t be recouped.

Engelbrecht said that at stores that were not damaged during the unrest, sales momentum was “very good” following the year-end. Its full-year dividend increased by 42% to 544 cents per share.

Black Friday goes online

By Georgina Crouth Time for IOL

Deals for more days, greater choice and other enticements, just to keep customers out of brick-and-mortar stores – that’s how retailers are responding to a pandemic Black Friday because Covid or no Covid, the sales bonanza is here to stay.

E-commerce is estimated to have surged by at least 16% this year in South Africa and Covid-19 has changed the game for retailers.

In May, Nielsen found 65% of South Africans shopped less at supermarkets due to Covid-19, while those who already shopped online shopped more (29%) and 21% continued as before.

Marketing agency HaveYouHeard head of insights Claudia Schonitz says: “Many, many South Africans have emerged from the pandemic with considerably less spending power. Not only will this put pressure on brands and businesses to fight for less, they will need to work harder to convince consumers to support them.

Schonitz says the most noticeable shifts have been in three “domains”: social, home and e-commerce.

“When it comes to social, many people have realised just how much they need others and, over the next 12 months, connecting socially will be central to much of our activity and behaviour.

“We have become better at not doing much (while also doing more in the home) and enjoying it. This, I predict, is a behaviour that will persist for much longer.”

HaveYouHeard’s recent survey found 81% of respondents who shopped for groceries online stated that safety from Covid-19 was the biggest benefit to online grocery shopping, but only 27% said they were likely to continue once Covid-19 was no longer a threat.

Remember, remember the sales of November

Last week, announcements came in thick and fast about how brick-and-mortar stores would be offering Black Friday for the entire month of November.

Pick n Pay has extended Black Friday to two weeks, with more deals in store and online. John Bradshaw, retail executive for marketing at PnP, says, “Black Friday is a very busy trading period so we’re extending Black Friday to two weeks to keep our customers safe and able to shop for great deals at their leisure. We will also be limiting the number of customers in our stores at any one time to keep everyone safe, with highly organised queueing.”

The retailer says its stores are better prepared this year, after extensive planning with suppliers, and they’ll be opening as many tills as possible to keep customers from queueing as much as possible.

In-store deals will also be available online, but the retailer will run online only deals before launching its in-store deals, with new deals being added every few days.

Massmart stores Game and Makro are running Black Friday deals for all of November. Game has increased staffing levels and expanded its Uber Eats partnership for Black Friday to ensure it is able to meet customer expectations. It is also offering its 1 Cent Price Surprise on all Black Friday purchases. Both retailers will be spreading their deals out over different weeks. Game’s first set of deals will be announced and launched online at midnight on November 1 and be available exclusively for that week.

Uber Eats is the exclusive delivery partner for small electronics and home office essentials. Consumers are promised a delivery time line of 10 to 14 days on all Black Friday orders, with the delivery fee being capped at R90 – except for large appliances such as fridges and chest freezers, which will carry a R70 surcharge per item, per order. Newsletter subscribers will have early viewing access to all Black Friday deals.

But don’t expect door-busting deals in-store: Game stores will only trade between 9am and 6pm during the week, Saturdays from 9am to 5pm and Sundays from 9am to 4pm.

Cyber Monday will run exclusively online.

Makro similarly says it will be offering “unbeatable specials” for a week at a time, which are not to be repeated.

There’s also 10% back in mRewards for the opening week (November 2 to 8) on all non-promo general merchandise in store and online; the delivery fee is capped at R90 (excluding extended range items and commercial orders); free locker delivery on qualifying orders; same-day delivery on grocery and liquor orders through the One Cart app; 50 new deals every week.

Warrick Kernes from the Insaka eCommerce Academy says brick-andmortar stores have been forced to prepare for an online surge to avoid the risk of Black Friday becoming a super-spreader.

“E-commerce has been growing 25% year-on-year over the past decade but its growth this year has been stepped up: consumers were forced to adopt processes and tech that they should have used before, because of the joy and ease of having things delivered at home or office.”

Kernes says while many industries were negatively affected by Covid, e-commerce has benefited greatly because consumers have cottoned on to the convenience.

The spectre of Black Friday, though, raised concern about super-spreaders: “Even if we don’t see a second wave in South Africa, retailers would not want to encourage shoppers to come in droves to stores for big-screen televisions, etc.”

Spreading out the sale makes sense for any seller because there’s less “noise” around the day, customers get to pick their deals calmly and they aren’t bombarded by marketing material.

Massmart’s strategy is “genius”, he says: “Consumers aren’t going to shop around as much, so the retailers can close sales quicker. Their teams can handle the influx of deals and the processing and dispatching of orders. Spreading it out allows for a quieter team, which means retailers can deal with more sales and not overload the couriers.”

Towards the end of a year scarred by a pandemic and economic devastation, online retailers can expect a bumper sales period because shoppers would want to avoid physical retail stores and shopping malls over Covid19 fears – and capitalise on deals, more than ever.

Kernes believes this is a massive opportunity for online sellers in South Africa to benefit.

 

By Londiwe Buthelezi for Fin24 

The Foschini Group (TFG) says it has submitted a conditional offer to acquire Edcon’s business rescue practitioners to acquire some of the stores and assets of JET.

In the offer submitted on Friday, TFG offered Edcon R480-million to acquire a minimum of 371 commercially viable JET stores.

Edcon, which owns Edgars and Jet Stores, announced in late April that it would file for voluntary business rescue after the nationwide lockdown exacerbated its already dire financial position. In June, its BRPs said the only way to save the company and the jobs of its thousands of its employees was through an “accelerated sale” of its divisions to interested parties.

TFG, which has been growing its local manufacturing capacity, said the proposed deal also comes with JET’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. The company is looking to also acquire JET Club and all existing JET stock of no less than R800-million.

“Edcon’s business rescue practitioners have accepted the terms of TFG’s conditional offer. TFG has been granted exclusivity to negotiate and finalise the terms and conclude the Proposed Transaction,” wrote the fashion retailer in a statement issued on Monday morning.

Analysts have long speculated that JET will probably be one division of Edcon that buyers will find interesting.

The BRPs announced last Tuesday they had signed an agreement to sell parts of Edgars to Retailability, another fashion retailer that owns the brands Legit, Beaver Canoe and Style.

TFG said JET’s brand recognition and market share and would provide it with a strategically important expansion into the “value segment” of the Southern African retail apparel market.

“The proposed transaction enables TFG to acquire selected parts of the JET business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price,” wrote TFG.

By Michael Grothaus for Fast Company

If you’ve stepped into a mall recently you might find it not too surprising that malls are dying. There’s plenty of blame to go around for that too: Amazon, the changing shopping habits of internet-savvy consumers, and major brick-and-mortar retailers offering free shipping—just to name a few.

As a result, malls are becoming ghost towns, looking more fit for the setting of a zombie apocalypse movie than a setting where people congregate to shop. Matter of fact, as Business Insider points out, 25% of malls will shut their doors by 2022, and more than 9,300 retail stores are expected to have closed in 2019–many of them in malls.

That’s why it’s no surprise that mall owners are taking rather drastic steps to keep retailers from leaving. Matter of fact, popular fashion chain – and mall stalwart – Forever 21 just reached an agreement to sell its beleaguered business for $81-million. The buyers? A group that includes Simon Property Group, Brookfield Property Partners and Authentic Brands, reports CNBC. Simon Property Group and Brookfield Property Partners are large owners of malls.

In other words, the two groups are buying their former tenant, in part at least, to keep that tenant in their malls. The groups’ fear is that if a large, popular chain like Forever 21 leaves those malls, overall foot traffic to those malls will drop, resulting in lower sales for all stores—and potentially more of those stores shuttering.

Simply put: Simon Property Group and Brookfield Property Partners buying Forever 21 is an attempt to stop more of their malls from becoming ghost towns. Simon Property Group’s malls have more than 100 Forever 21 stores in them alone.

This isn’t the first time Simon and Brookfield have bought a struggling retailer to keep their malls from becoming vacant, CNBC notes. In 2016 Simon and General Growth Properties (now owned by Brookfield) rescued Aeropostale from bankruptcy, keeping the retailer in its malls. As mall traffic continues to decline, it’s possible more mall owners could take similar steps in the coming years to ensure the death of malls isn’t a foregone conclusion—or at least that their demise is slowed.

By Babalo Ndenze for EWN

Parliament wants the government to find a way to stop the pending retrenchments at retail giant Massmart.

Mandla Rayi, chairperson of the Select Committee on Trade and Industry, Economic Development, Employment and Labour called on those departments to urgently intervene.

Massmart, which is majority-owned by US retail giant Walmart, has this week indicated it had started consultations with unions about the closure of up to 34 of its Dion-Wired and Masscash stores which could affect 1 400 employees.

Rayi said that it might not be ideal for the government to interfere in business but the severity of the pending retrenchments necessitated some form of intervention.

“We would like to have a meeting with the departments of employment and labour and DTI, with them telling us how far they’ve gone with regards to their intervention in this matter.”

He said that it was the very same government that facilitated the American owned Massmart’s entry into the South African economy.

“Remember when Massmart, an American company, wanted to come to South Africa, government was involved in facilitating their coming into the country, so we want them to get involved over the pending retrenchments.”

He said that the select committee would request a meeting with the departments of employment and labour as well as the trade and industry department to try to find solutions.

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

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