Dairy products re-classified - Supermarket & Retailer

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FOOD FOCUS

Dairy products re-classified

NEW TRENDS

Is eating the new retail?

STORE LIGHTING

Let there be light

FOOD INFLaTION

Save customers from the pinchFRESH FLOWERS

Get your cut

1SUPERMARKET & RETAILER, OCTOBER 2016

F E A T U R E S

BUSINESS • MANAGEMENT • FMCGOCTOBER 2016 • Vol 66 No 10

R E G U L A R S

18 Financing & insuranceThe importance of insuring company assets. Running a supermarket is hard work. That makes it very important to have reliable service providers to look after those critical aspects of business that one nearly always does not have time for – like insurance and finance.

21 Store lighting Let there be light. Visual merchandising is a subset of retail merchandising that is part art and part science. As a result of this dual nature, it seems to be constantly in flux, adapting to changes in taste and technology.

24 Fresh flower industrySay it with flowers. Up to one million flowers are sold on the Johannesburg fresh-flower market every day. Most of it end up in retail. Are you getting your slice of the R1 billion flower pie? By Tarina Coetzee

15 Food focus: DairySA dairy products reclassified in line with international standards. New legislation has brought about a host of new dairy product names and definitions. The motivation is to align the South African market with international standards. What does this means for the industry, and how have our producers adapted to the new rules?

2 What’s new?All the latest products, new variants and packaging changes.

6 Delight your customersA perfect storm for success. The winners always seem to have one thing in common: a knack for attracting and keeping customers. Somehow, they have given their customers good reasons to stay loyal. We look at the five things necessary to create a core group of loyal customers By Aki Kalliatakis

9 On promotionPromoting special products. It’s time to honour the delicious and health-giving apple. People love chocolate and you can get your customers to treat themselves by covering strawberries, nuts and many other foods with it. This month we give you the December promotional calendar.

14 S&R/Field Agent BarometerPricing of known value items. We look at the Western Cape for pricing of eight KVIs across seven comparative retailers, and compare promotions and availability.

26 World watchCarrefour Urbano: A new supermarket model. Carrefour, a new mid-sized supermarket in Turin, Italy, is a model based on top-class service – 24 hours per day, 7 days a week. The 785m2 store has moved away from the image of convenience and is embracing a service formula to retain customers. Adapted by Hippo Zourides

30 New trendsIs eating the new retailing? Retailers need to start thinking differently about what makes up their competition. Beyond the traditional supermarkets and convenience stores, our consumers are finding different solutions to feed their families outside our stores. Adapted by Hippo Zourides

34 Industry news & diaryA collection of local and international items of interest to retailers, plus a calendar of upcoming trade fairs and events.

C O V E R S T O R Y

2SUPERMARKET & RETAILER, OCTOBER 2016

Is your glass half empty, or half full?As the world of business experiences unprecedented turmoil, in

this perfect storm that batters the already weary consumer, some

businesses still experience phenomenal success.

How does this happen? Is it due to good timing, or maybe some luck? An

optimistic attitude? Or do other factors play a role?

The winners always seem to have one thing in common: a knack for attracting and

keeping customers – even though they aren’t necessarily the cheapest. Somehow,

they have given their customers good reasons to stay loyal. This is good news that

all businesses should learn from.

In Delight Your Customers, we look at the five things necessary to create a core

group of loyal customers – no matter how hard times become.

Then in Storewatch we look at an entrepreneur in a country town whose

perseverance and passion for retail is his formula for success. Read how Jaco Pieters,

a young resident of Belfast in Mpumalanga, converted an old, unsuccessful store

into a vibrant new Saverite. His story is living proof that apparent adversity can

indeed be overcome.

At the same time one has to keep up with change. New legislation has brought

about a host of new dairy product names and definitions. The motivation is to align

the South African market with international standards. What does this means for

the industry, and how have our producers adapted to the new rules? Find out in in

our Dairy feature.

Running a supermarket is hard work. That makes it very important to have

reliable service providers to look after those critical aspects of business that one

nearly always does not have time for – like insurance and finance. Over the festive

season most stores have more cash on the premises than at any time other time of

the year. This makes adequate insurance crucial during this period. In our Finance

and Insurance feature, we examine this very technical subject.

Meanwhile food inflation in South Africa stood at a staggering 11,3% in August.

This is almost double the overall consumer price index of 5,9% and has a direct

and major impact on shoppers.

Can you help these vulnerable customers survive these trying times? In our Food

Inflation feature, we look at how one can assist.

Is the flower business a bit of a mystery? It may be a relatively small niche

business, but up to one million flowers are sold on the Johannesburg fresh-flower

market every day. Most end up in retail. Are you getting your slice of the R1 billion

flower pie? Find out how the flower business works in our Fresh Flowers feature.

Who’s your competition? In New Trends we ask, Is eating the new retailing?, we

see a need to start thinking differently about who we compete with. Consumers

are finding different solutions to feed their families other than a supermarket. It has

become obvious that our vision of a competitor must be enlarged if we are to grow

our food-to-go business.

Optimism has a great influence on the way we see and experience the world. In

times like these seeing your glass as half full is a necessary condition that enables

one to exploit the many opportunities that exist to build a successful business and

keep customers loyal.

We hope that this issue of Supermarket & Retailer can help contribute both the

knowledge and inspiration for a more successful tomorrow. Enjoy the read.

Stephen Maister

\ OCTOBER 2016 ■ Vol. 66 No 10Website: www.supermarket.co.za

■ ■ EDITORIAL ■ ■ ■ ■

Managing Editor: Stephen Maister (BCom)[email protected] PA to Managing Editor:Ivana [email protected] Editor:Hippo [email protected]:Tarina [email protected] Editor:Nina [email protected]

■ ■ AD SALES ■ ■ ■ ■

Johannesburg: 011–728-7006Stephen Maister: 082-604-5606Helen Maister: 082-601-3055Durban: 031-312-6810Marlane Williams: 083-447-3554Cape Town: 021-554-3761Karen Prumm: [email protected] Advertising email: [email protected] bookings:Ivana [email protected]: 086-505-0351

■ ■ CiRCulATiON, SuBSCRiPTiONS AND ACCOuNTS ■ ■ ■ ■

Muneera KaraEmail: [email protected]

[email protected]: 086-505-0322

■ ■ ADMiNiSTRATiON ■ ■ ■ ■

Financial director: Lydia Maisteremail: [email protected]

■ ■ CONTACT uS ■ ■ ■ ■

Phone: 011-728-7006Fax: 011-728-6182 or 086-528-0754Postal Address:P O Box 46066, Orange Grove, 2119Physical Address:15 Grove Road, Cnr 3rd Avenue, Mountain View, 2192

■ ■ TO SUBSCRIBE ■ ■ ■ ■ To receive Supermarket & Retailer each month, please send details of your company, your position and your postal address, together with your subscription (see rates below) and make payment to:Supermarket & RetailerP O Box 46066, Orange Grove, 2119Subscription Rates■ South Africa – R715.00 (incl VAT)■ Southern Africa – R1 010.00 (Namibia, Botswana, Swaziland,

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CiRCulATiON POliCYOur ABC controlled circulation covers owners, executives and management operating in South Africa’s ±4 500 hyperstores, supermarkets, superettes, grocery wholesalers and selected mass merchandise outlets.

COPYRiGHT©The copyright of all material in this magazine and its supplements is reserved by the proprietors, except where expressly stated. The Editor will, however, consider reasonable requests for the use of information on condition that the source and author are clearly attributed. Important: the material in this magazine may not be reproduced on any electronic archiving, retrieval or distribution system.

PuBliSHERSSupermarket & Retailer is published by:Supermarket and Retailer (SA) cc Reg No. 2007/076713/23

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Total ABC Circulation 8 592

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EDITORIAL COMMENT

Teething made easyBabe-Eeze has extended its range of

teething products for babies with a fun

and practical silicone teething bib. Teething

babies constantly need something to

chew on and Babe-Eeze teething bibs are

ideal for this purpose. The bibs have a dual

purpose: the non-toxic, silicone tip is ideal

for chewing on, while, at the same time,

the bib keeps baby’s chest dry. Babe-Eeze

silicone teething bibs are stylish as well

as practical. The bib has adjustable, snap

technology with a double-snap button at

the back of the neck allowing expansion as

the baby’s neck grows. Babe-Eeze silicone

teething bibs are available with pink and

blue and are printed in bright prints onto

a soft cotton fabric with a plain colour

backing. This makes the bibs reversible

when they become grubby so they don’t

need replacing as often as conventional

bibs. Babe-Eeze silicone teething bibs are

so soft and comfortable that they do not

hinder the baby’s sleep pattern either. The

bibs don’t need any special care and can

be tossed into the washing machine along

with the general wash after which they dry

quickly and are ready for use again in no

time at all. All Babe-Eeze products are free

from BPA, PVC, Phthalates, cadmium and

lead. Babe-Eeze silicone teething bibs are

available from most wholesalers.

New tile-cleaner variantPlush Supreme has

introduced the Floral

Fantasy variant to its

current tile-cleaner

range. The current

range includes

Lavender, Potpourri,

Orange Blossom and

Spring Fresh. The Plush

tile cleaners bring out

the natural beauty of a

home, while protecting

it at the same time. It cuts through grease

and grime, removing tough stains and

leaving sparkling clean, shiny and fragrant

a Classic Goblet.

The Cointreau

Festive Gift Pack

is available at

selected stores

only for a

recommended

retail price between of between R359 and

R379.

Fizz up your summerThe Cointreau Fizz Kit is the perfect

choice when wanting to show family and

friends your exquisite mixology skills.

The sophisticated Fizz Kit consists of a

bottle of Cointreau, a Classic Goblet and

a Cointreau lime squeezer. On purchasing

your Cointreau Fizz Kit, you will receive a

complementary 1l soda water enabling you

to create the classic Cointreau Fizz cocktail.

It is available at selected Spar and Ultra

Liquor stores at a recommended retail price

of R369,99. A lip balm with

A lip balm within a balm Blistex Ulta-Rich Hydra-

tion – a dual-layered lip

balm designed to deliver

all-in-one moisturisa tion

and protection – has just

been launched in South

Africa. The dual-layer

approach is clearly visible

in celestial blue core of

luxurious moisturisers and outer layer

of effective lip protectants. The two

formulations merge on application. The

ultra-concentrated inner core of rich

moisturisers boosted by Shea Butter, Cocoa

Butter, Olive Oil and Jojoba melt on the

lips with the protective outer layer fortified

with Ceresin, Beeswax and Wheat Germ

Oil. The Ceresin and Lecithin soften and

smooth the lips, helping to seal in moisture,

while the Wheat Germ Oil and Vitamin E

are nutrients, together with Beeswax sooth

and protect your lips against the elements.

For enhanced protection, SPF 15 offers

defence against harmful ultra-violet rays.

Blistex Ultra-Rich Hydration is available at

selected stores and pharmacies country-

wide at a recommended price of R85.

tiles. Priced from R26,99 per 750ml bottle,

the tile-cleaner range is available from all

leading retailers.

Save water with SunlightSunlight has

introduced its

improved 2-in-1

washing powder

with smartfoam

technology,

which helps to

reduce water

consumption in

the rinse process.

Consumers can still rely on the product’s

unique fragrance technology that produces

a burst of fragrance as soon as it comes

into contact with water, leaving clothes

smelling fresh all through the wash,

rinse and dry process. The launch of this

improved product is testament to the

brand’s commitment to taking the lead

in water-saving initiatives and promoting

water consciousness and conservation.

The washing powder is available in Spring

Sensations and Tropical Sensations in six

pack sizes: 250g (R9,99), 500g (R18,99),

1kg (R29,99), 2kg (R47,99), 3kg (R64,99)

and 5kg (R109,99).

5SUPERMARKET & RETAILER, OCTOBER 2016

Supermarket & Retailer

celebrates its 60th year!

Your essential 2016 equipment & services

Buyers GuideGet this service online atsupermarket.co.za

attracting and keeping customers – even though they aren’t necessarily the cheapest in their industry. Somehow, they have given their customers good reasons to stay loyal by ensuring that their total experience is positive and desirable. This is the good news that all businesses should learn from.

I have some to the conclusion that five things are necessary for creating a core group of loyal customers and enjoy the fruits of success – no matter how hard times like these become.

■ Your business has to get the basics incredibly right, and to kill all “dumb contacts” that your customers moan about. Companies often do really stupid things that discourage customers from returning – like refusing to give change, like allowing pettiness and rules to get in the way of customer delight, and like not taking action when staff that consistently upset customers through apathy or even discourtesy. Everything else in your business – and in the following three points – rests on this ability to get the strongest foundation of getting the basics right, and if you don’t do this, it’s the equivalent of putting lipstick on a pig. It makes the pig more attractive, but it is still a pig! I know it is sometimes difficult to keep shelves properly stocked, to ensure that your business is open when customers need you

A perfect storm for successMy uncle George always

advised: “Get into the food

business. People will always

have to eat.” He was, of course,

referring to recessions and

economic downturns, but looking

at the restaurant industry today,

I’m not sure if he was right.

Right now oil and energy prices are

creeping up again, there are power, water

and food shortages everywhere (though

we live in a world of abundance), political

turmoil is characterised by strikes, protests

and riots, inflation is rising, businesses fail

all around us, and stock markets are in

freefall.

Many companies hope against hope

that something, somewhere, will come

up: “If we could just make it over the next

few months…” Some experiment with

smaller packages for lower prices, others

cut costs to the bone as they spread misery

through retrenchments, and yet others try

to outmanoeuvre their rivals by whatever

means possible – sometimes doing things

that are verging on the unethical.

While these strategies may provide

temporary salvation, in the long run they

lead to a dead end. For small businesses,

the ruthlessness demonstrated by the

giants that are their competitors, their

suppliers or their customers is well

documents.

As historian JH Elliot so aptly put it

in his book Imperial Spain: “Surrounded

by the increasingly shabby remnants of

a dwindling inheritance, they could not

bring themselves, at the moment of crisis,

to surrender their memories and alter the

unique pattern of their lives.”

But even as the world of business

experiences turmoil, in this perfect storm of

factors that batter weary customers, some

businesses experience phenomenal success.

How does this happen? Is it due to good

timing, or maybe some luck, or do other

factors play a role?

When you examine the winners, there

always seems to be one thing that they

have in common: they have a knack for

to be open, and to deliver to their homes

when that’s not part of your offer. But

imagine their surprise, and their resulting

loyalty, when little things like that happen.

■ Simplify and make it easy to do business

with your firm. In today’s incredibly

complex world, research evidence* shows

that customers will buy more and more

often if they feel that it requires much

less effort to deal with a company. But the

opposite is also true: if it is hard to deal

with you, they will seek alternatives. There

are four areas you can look at for making

their lives easier. Is it physically a big effort

to transact with your company, because

of its location, its layout, the packaging

of your products, and so on? Then you

can look at the conceptual or intellectual

effort: is it simple to understand, do they

need to think a lot in order to get things

done, are the instructions easy to follow or

impossible without a PhD in law? A third

area to look at is the emotional effort

required. This includes feelings of confusion,

of powerlessness, of being unassisted and

ignored, and so on. When customers feel

like this, the result is frustration and they

look for ways to get back at your business

and its people. Finally, do they feel that the

time they spend in your business is wasted,

that they are kept waiting too long, that

the queues aren’t moving quickly enough?

■ Put relationships first. It sounds obvious,

but I rarely feel that firms where I spend

my money actually care because there is

no evidence of this. They don’t remember

6SUPERMARKET & RETAILER, OCTOBER 2016

▲By Aki kAlliAtAkis

Aki Kalliatakis is the managing partner of The Leadership LaunchPad, a company dedicated to helping clients become more customer driven. He can be contacted at (011) 640 3958, or via the website at www.leadershiplaunchpad.co.za

DELIGHT YOUR CUSTOMERS

my name, or even acknowledge that I’ve been

there before by just saying something like, “Nice

to see you again.” Hint: if you say this, even

though you have no idea who that customer

actually is, in most cases you will be right!

These people-related things are not difficult:

basic manners, some some kind words, a lot of

smiling, and doing things to connect with them

in a chat or a conversation. These things come

naturally to us as human beings – if allowed to

do them. You can even go so far as going out of

your way to break the rules for them.

■ Constantly and continuously find innovative

and creative little ways to add value for them.

Do something unusual. It doesn’t have to cost

a fortune. In fact, counter-intuitively, the small

meaningful things are usually more powerful

than the big expensive stuff. But the idea is

to surprise them by doing something unasked

for and unexpected. This could even include

things like sharing information that they

normally don’t have access to, showing them

some shortcuts they would never discover

for themselves. Giving them some training or

advice about how to do certain things. (One

major hardware chain even runs full training

courses on Saturday mornings.)

Do these things well, and my Uncle George’s

advice about getting into the food business

will be unnecessary, for you will create barriers

that will make it difficult for your customers to

switch to a rival.

* HBR August 2010, in the article Stop Trying to Delight Your Customers* authored by Matthew Dixon, Karen Freeman, and Nicholas Toman.

8SUPERMARKET & RETAILER, OCTOBER 2016

DELIGHT YOUR CUSTOMERS ▲

Research shows that customers will buy more and more often if they feel that it is easy to do business with you.

Constantly find innovative and creative little ways to add value for your customers.

The Group’s total revenue increased by 0,5% to R184,4 million

(2015: R183.5 million). Gross profits increased 13,2% from

R70,8 million in 2015 to R80,2 million.

Verimark CEO Michael Van Straaten says Verimark products

are currently available in 1 700 retail stores in South Africa,

many of which are supermarkets, and 99% of products are sold

through retail, an only 1% through telesales.

“The Verimark brand is almost 30 years old and when we first

started, we sold 90% of our products over the telephone and

only 10% in retail,” he says.

Verimark is a wholsesaler selling its products to retailers,

allowing them to benefit from added turnover and profit when

selling Verimark products in their stores.

“We advertise aggressively on television and retailers selling

our products also benefit from this.”

Verimark products boost retailDirect retail group Verimark has recently announced improved profits

for the first half of 2016, despite a tough retail environment

A further benefit to retailers is the fact that Verimark appoints

and pays for dedicated staff that sells its products in the stores

of the various retailers. Van Straaten says Verimark products do

particularly well over the festive season and sales increase three-

fold during this time.

Eat a Red Apple DayOn 1 December we honour the red tasty

fruit that is said to keep the doctors away

when you eat one every day. Apples are

very popular and there are hundreds of

species. Apples are full of Vitamin C and

antioxidants and thus real healthy food.

Celebrating Eat a Red Apple Day is easy:

Eat a red apple and enjoy. Apples can be

prepared in various ways, but the healthiest

one is to not prepare it all and eat it right

away. Or you can treat your customers

with a slice of warm, tasty apple pie. They

will love you for it!

Chocolate-covered Anything DayThe best thing about Chocolate-covered

Anything Day is that you can cover

everything you eat in chocolate. And for

one day nobody is allowed to say anything

about it. Here are some ideas for breakfast,

lunch, dessert and snacks: chocolate-

covered raisins, waffles, pretzels, crepes,

strawberries, almonds, bacon (see Bacon

Day), and chocolate-covered potato chips.

And who cares that this day originated

in the USA? Chocolate is for everyone

everywhere and we embrace this fantastic

opportunity given to us by the land of the

free. And don’t worry that your customers

don’t know that they are supposed to

celebrate Chocolate-covered Anything Day

– cover everything in chocolate anyway.

Bacon DayThere’s nothing in this world that doesn’t

taste better with bacon. Whether it’s

chocolate-covered bacon (see, everything

can be covered in chocolate), bacon cheese-

burgers, bacon-wrapped potatoes, or even

plain old bacon and eggs, you can’t deny

that it’s a tasty treat that’s truly gotten

it’s fingers in everywhere. But there’s more

to bacon than just meat on meat, bacon

is an open-minded kind of food, and has

already been known for being part of any

of the three major meals of the day.

Hamburger DayBig or small, fried or grilled, with cheese or

without, everybody loves a good burger.

In honour of the day, serve a variety of

burgers in your food-to-go department.

And the best thing about hamburgers is

that they can be healthy. Make your own

patties and serve your burgers with freshly

made salads.

Pastry DayPastry is a name given to a large variety

of baked goods that are typically made of

ingredients such as flour, sugar, milk, butter,

shortening, baking powder and eggs.

Pastry dough is rolled out very thin and

then used as a base for different baked

products. A few of the more common

pastry items include pies, tarts, quiches

and pasties. pastry items include pies, tarts, quiches and pasties.

Pastries can be traced as far back as the ancient Mediterranean where they had almost paper-thin, multi-layered baklava and filo. Pastry making began in Northern Europe after the Crusaders brought it back from the Mediterranean. French and Italian Renaissance chefs eventually perfected the puff and choux pastries while 17th and 18th century chefs brought new recipes to the table. Included in the new recipes were Napoleons, cream puffs and éclairs.

There are many different types of pastry, most of which would fall into one of the following categories:

■ Shortcrust pastry – simplest and most common.

■ Sweetcrust pastry – similar to the shortcrust, but sweeter.

■ Flaky pastry – simple pastry that expands when cooked.

■ Puff pastry – has many layers that cause it to “puff” when baked.

■ Choux pastry – very light pastry that is often filled with cream or other filling.

■ Phyllo pastry – paper-thin pastry dough that is used in many layers.

9SUPERMARKET & RETAILER, OCTOBER 2016

ON PROMOTION

1 DECEmBERWorld Aids DayEat a Red Apple Day2 DECEmBERFritters Day9 DECEMBER Pastry Day16 DECEmBERChocolate-covered Anything DayPublic Holiday: Day of Reconciliation20 DECEmBER Sangria Day21 DECEmBER Hamburger Day24 DECEMBER Egg Nog Day25 DECEmBER Christmas Day26 DECEmBER Public Holiday: Day of Goodwill30 DECEmBER Bacon Day31 DECEmBER Champagne Day

DECEMBER 2016 PROMOTIONAL

CALENDAR

The dismissal was, according to the

arbitrator, unsubstantiated. On review, the

Labour Court agreed with the arbitrator

and placed emphasis on what it regarded

as strong mitigating factors in favour of the

employee.

The Labour Court order was taken

on appeal. On appeal, the LAC had to

determine whether the dismissal was an

appropriate sanction. The LAC noted that it

was common cause that the employee was

guilty of the misconduct and found that

the arbitrator was wrong in ruling that the

employee was remorseful as his apology

was belated and only as a result of his

attorney’s advice.

The LAC also held that where an

employee could not own up to their

own misdemeanor and displayed a

lack of remorse, the dismissal would be

substantively fair. The LAC found that the

decision of the arbitrator in this case was

not one of a reasonable decision maker

and that the employee’s dismissal was an

appropriate sanction in the circumstances.

In respect of racial slurs made by the

employee that the manager “was even

worse that Verwoerd” (without justification

or justifiable cause), the LAC found that it

constituted an offensive racial insult and

was totally unacceptable in the workplace.

The LAC reflected on the history of the

country and stated that Hendrik Verwoerd

is known as the Architect of Apartheid as

he, amongst other things, implemented

a system of laws which segregated the

By sAmikshA singh And ZolA mcAciso, cliffe dekker hofmeyr

The Labour Appeal Court (LAC)

issued a stern warning that it will

not tolerate racism, in any form.

In the workplace. In the recent case of the City of Cape Town v Freddie & Others (2016) 37 ILJ 1364 (LAC), the LAC reviewed and set aside an arbitration award in which the arbitrator found that the employee was unfairly dismissed for making repeated unsubstantiated racist allegations about his manager.

In this case, when the employee’s manager guided him on how to properly compile a particular report and instructed him to seek assistance from a fellow employee to finalise the report, the employee embarked on a bombardment of emails to the manager. In the emails he accused the manager of incompetency and of being a dismal failure. The emails were also copied to various employees. When the manager requested that the employee cease such conduct, the employee accused the manager of being a racist and compared him to Hendrik Verwoerd.

The employer dismissed the employee on charges of serious misconduct in that he was grossly insubordinate, insolent and aggressive towards management and that he had sent derogatory and racially offensive emails to his manager. During the arbitration, the employee attempted to justify his allegations of racism by stating that the manager had insulted him in front of his colleagues. The employee also made unfounded allegations of being discriminated against on the basis of his race.

The employee challenged his dismissal at the Bargaining Council. The arbitrator found that there was no evidence to prove the racism alleged by the employee and that it was the employee’s subjective view. The arbitrator held that the employee had shown some remorse (albeit only after receiving advice from his attorney to do so). On this basis and the employee’s length of service, the arbitrator found that the employment relationship had not irretrievably broken down and that since the employer was a large organisation, the employee could be placed elsewhere.

different races in our country and allowed

the several atrocities to take place against

black people (African, Coloured and Indians)

without any impunity.

Furthermore, the LAC reiterated that

the use of racist language against a person

or class of persons constitutes hate

speech and is prohibited in terms of the

Constitution and other law in South Africa.

The LAC also referred to the case of Crown

Chickens (Pty) Ltd t/a Rocklands Poultry

v Kapp and Others, whereinZondo JP

stated:

“Within the context of labour and

employment disputes this Court and the

Labour Court will deal with acts of racism

very firmly. This will show not only this

Court’s and the Labour Court’s absolute

rejection of racism but it will also show

our revulsion at acts of racism in general

and acts of racism in the workplace

particularly.”

This judgment sends a clear message

to employees and employers that racist

conduct and unfounded allegations

of racism in the workplace is wholly

unacceptable and will not be tolerated by

the courts. The Labour Court and Labour

Appeal Court have undertaken to deal with

these types of matters with a firm hand.

Employers and employees should ensure

that racism in the workplace is eliminated.

We advise that employers should adopt

appropriate strategies and implement

relevant policies in order to identify and

eliminate racism in the workplace.

10SUPERMARKET & RETAILER, OCTOBER 2016

STAFF MATTERS

No place for racism in the workplace

An entrepreneur in a country town

shows that perseverance and a

passion for retail is the formula

for success away from the major

commercial centres.

Many city-based entrepreneurs cannot

imagine that a profitable business can be

run in a small country town, especially

if there is both local and chain-store

competition.

This fallacy has been proven wrong in

many South African country towns where

many fortunes have been made over the

years. The formula appears to be based on

basic principles such as a true belief in the

potential of the local market, a passion for

the people and the business and long-term

perseverance. There are no quick solutions

The startOne such opportunity was identified by a

young resident of Belfast in Mpumalanga

province, Jaco Pieters, who had grown

up in the town, but had gone to the

major centres to complete his university

education (Jaco has a BCom Accounting

degree from the Pretoria University).

“I worked for Sasol for a while, but

I always wanted my own business and

retail was the most appealing to me,”

says Pieters.

His mother had run a number of liquor

stores in Belfast and had accumulated

some assets over the years, which included

some real estate. It is in one of these

buildings that he decided to convert an

old, unsuccessful store into a new, vibrant

Saverite.

A thorough feasibility study was

conducted before he decided to take the

plunge. Opened on 6 December 2012, the

store of 823m2 employs 32 staff members

and uses 6 checkouts to serve its clientele

from Belfast and the surrounding areas.

Trading from 7:30 until 18:00 daily,

until 16:00 on Saturdays and until 14:00

on Sundays and public holidays, the store

covers every household need of the local

population.

The franchiseSaverite (slogan: Where everyone is

welcome) is a Masscash subsidiary and

uses Massmart’s buying power to give

its members affordable and competitive

pricing across a wide range of products

11SUPERMARKET & RETAILER, OCTOBER 2016

STOREWATCH By hippo Zourides

Good quality fresh produce is sourced from the major city markets and the Belfast shopper can find all her needs in the store.

A view of the store entrance of Saverite Belfast.

A country town retail model that works

A view of the checkout counters.

when trading in a country town, as the size

of the pie is limited. However, opportunities

abound.

▲

supermarket – groceries, toiletries, fresh produce, fresh meat, a deli and home-meal replacement (HMR) section, and a range of general merchandise. What appears to set the place apart from its competitors (two SPAR stores, a USave, some local traders and orecourt convenience stores) are simple:

■ A suitable range for the local consumer tastes (Pieters uses his UniPOS system to analyse his rate of sale and adjust his range accordingly).

and services. It is eight years old and

currently has 145 stores under its umbrella.

Pieters, who sits on the franchisee

forum, representing retailers in Gauteng,

Mpumalanga and North West, is very

complimentary of the support he gets from

his franchisor.

“The store model is economical (we use

the buying power of the Shield buying

group), there are regular promotions and

I receive regular visits from the retail

operations manager regularly. They also

offer staff training in various formats. But

the most important part for me is that it is

not a dictatorial franchise model. Saverite

encourages our entrepreneurial skills and

freedom of choice and we have the results

to prove it,” he says. Franchise royalties are

paid on purchases and not on sales as in

other food franchise formats.

Place of pride in his office are the shelves

loaded with trophies awarded to him and

his staff as recognition as Store of the Year

in 2013 (regionally), 2014 and 2015 (both

regionally and nationally).

Store philosophiesThe store, which is well stocked, covers

every aspect of a normal South African

■ Competitive pricing (regular surveys are

done of the surrounding pricing).

■ Quality and availability of products (no

compromise on the quality of products,

especially any fresh offerings).

■ Most importantly, customer service is

seen as a top priority by both manage-

ment and employees in the store.

“The way we treat our customers (80%

of the customers are black) ensures they

return again and again,” he says.

12SUPERMARKET & RETAILER, OCTOBER 2016

STOREWATCH ▲

Basic staples, such as mealie meal, dog food and cases of cool drinks, are easily accessible to the customer as she moves towards the checkouts.

Jaco Pieters proudly displays his many awards of excellence.

Jaco Pieters and his management team are always available on the floor to attend to their customers’ needs.

The butchery consists of a pre-pack section as well as a conventional serviced area.

The end result is that the store boasts

double digit sales growth since its inception.

Saverite has also developed a range of

private-lable brands that assist the store in

terms of variety, price competitiveness and

profitability. The fortnightly promotional

leaflets include many private-lable products

amongst its wide selection.

Community serviceJaco decided earlier on in his career

that unless he involved himself with the

local community, he would not be fully

successful.

With this in mind, he worked closely with

the Saverite head office, and launched the

eMakhazeni Saverite Kitchen that daily

feeds over 800 children from a local school

in July this year.

He has sponsored both local soccer

teams and hockey teams with kit and now

supports Belfast’s second-tier rugby team.

This community involvement assures

continuous loyalty from customers who

appreciate the effort by Saverite, as well as

Pieters and his team.

The passion of this young man is

refreshing to witness and the retail industry

is a better place with young dynamic blood

such as Jaco Pieters.

13SUPERMARKET & RETAILER, OCTOBER 2016

The HMR section includes a pre-packed foods area for quick service.

The eMakhazeni Saverite Kitchen feeds local schoolchildren daily.

No store is complete without a bakery and all the space in this corner has been utilised to display the fare produced in store

The service kiosk allows customers to make small transactions instead of queuing at the tills.

HMR is a growing business for the store and the public makes good use of this section, especially on the way home.

A separate store was incorporated into the front section of the super-market and the ramp is a comfortable way to move from one to the other.

Pick n Pay Hypermarkets were found

to have the highest availability of items

Crowdsourcing via smartphones provides

an unbiased, real-time understanding of

consumer shopping habits and frustrations,

assisting retailers to focus on relevant

operational issues and reinforce customer

loyalty and shopper satisfaction. Feedback

is collected through photos, videos, audio

timers and barcode scanners, capturing

consumer insights instantaneously.

Perception and behavioursKVIs are groups of items that consumers

are the most price sensitive to. They

generally drive the perceptions and

behaviour of the consumer. It is proven

that by looking at the prices of certain

known value items, consumers make

general decisions on where to shop and

where not to shop. As a result, retailers try

to keep these prices stable and low to avoid

any unnecessary perceptions about pricing

in their stores.

We surveyed 105 random responses

from the Western Cape, equally spread

across seven retailers. Our basket of KVIs

comprised:

■ Albany Superior sliced brown bread

(700g)

■ Rama Original margarine brick (500g)

■ Clover full cream long life UHT milk (1

litre)

■ Five Roses Superior Ceylon Blend 102

tagless teabags (250g)

■ ACE Super maize meal (1kg)

■ Tastic long grain parboiled rice (500g)

■ Huletts white sugar (1kg)

■ Omo hand washing powder (1kg)

Because ACE Super Maize Meal was found

not to be available across all selected

retailers, it was excluded from the cost

calculation. In terms of pricing, the lowest

average price of the selected basket was

from Pick n Pay Supermarkets, and the

highest was from Checkers Hypermarkets.

Spar Supermarkets had the second highest

number of promotions on the products

selected, while Superspar had the highest.

chosen, while Pick n Pay and Shoprite

supermarkets shared the lowest.

14SUPERMARKET & RETAILER, OCTOBER 2016

S&R/FIELD AGENT BAROMETER For more information, email us at:

[email protected].

Pricing of known value itemsIn September, Field Agent conducted a pricing audit of known value

items (KVIs) in Gauteng. In this publication, we look at the Western Cape.

We took the pricing of eight KVIs across seven comparative retailers,

and compared promotions and availability.

Price comparisons (average prices) in Rand

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Albany Superior standard sliced brown bread (700g)

11,14 12,39 12,39 12,29 12,55 12,71 10,49

Rama Original margarine brick (500g) 26,93 24,99 24,99 24,13 21,32 27,99 27,95

Clover long life full cream UHT milk (1l) 15,29 14,95 14,44 15,49 15,86 16,53 15,49

Five Roses Superior Ceylon blend 102 tagless teabags (250g)

31,78 32,99 29,68 30,19 28,66 27,99 32,99

ACE Super maize meal (1kg) 12,16 11,84 11,99 - 11,56 11,56 -

Tastic long grain parboiled rice (500g) 8,96 6,99 7,14 8,99 8,39 8,33 8,99

Huletts white sugar (1kg) 17,89 17,99 17,62 17,99 19,19 18,99 17,99

Omo hand washing powder 32,99 32,99 32,99 32,99 33,44 33,22 32,99

Che

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R146,98

Total basket spend per chain

R145,76R146,42

R142,07

R139,25

R142,39

R144,98

excluding maize

Che

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8

Total promotions per chain

15

11

2

7

4

9

The new R260 sees a host of new

classifications for dairy products being

introduced, including drinking yoghurt

and custard. The fat content of dairy and

imitation dairy products has also been

reviewed. Dairy products that would

previously have been classified as being

“low fat” will, under the new law, have to

be classified as “medium fat” and, in order

for a dairy product to qualify as “low fat,”

the labelling for that product must show

the fat content to be less than 1,5% (as

opposed to the current requirement of a fat

content of between 1,5% and 2,5%). These

new amendments bring the regulations in

line with international standards.

The new R260 sees stricter marking

requirements for dairy and imitation dairy

products, with an ingredients’ list being

mandatory, the use of “best by/ use by/ sell

by” dates, and batch code indicators being

compulsory information to be displayed

on the container of a dairy product. The

compulsory information must appear in the

manner as prescribed in the primary food

labelling and advertising law.

For years, the debate regarding the

appropriate use of the word “fresh” in

relation to milk has been ongoing. R260

now makes it clear that the word “fresh”

may only be used in relation to pasteurised,

ultra-pasteurised, unpasteurised and/or raw

milk, and pasteurised and unpasteurised

cream. The word is not defined any further,

which is not helpful to understanding how

the term may be used in relation to those

milk varieties or any other dairy products

that fall under the regulation.

Under the current regulations, a

trademark (registered or unregistered)

may appear on the container of a dairy

product in a font size that is larger than the

prescribed font size of the class designation

(for example: low-fat cheese spread) of

that product. The new R260 will ensure

that dairy manufacturers may only use

their trademarks in a font size that is larger

than the font size of the class designation,

15SUPERMARKET & RETAILER, OCTOBER 2016

FOOD FOCUS: DIARY ▲

SA dairy products reclassified in line with international standards

The South African government’s Department of Agriculture, Forestry and Fisheries (DAFF)

has passed new regulations relating to the classification, packing and marking of dairy products and

imitation dairy products intended for sale in South Africa (R260), which repeals the current dairy products and

imitation dairy products regulations (R2581) when it came into effect this year..

on the containers of their

dairy products, if those

trademarks are registered.

Both the current and

future regulations

prohibit the use of

any word, mark,

illustration or

depiction that

constitutes

a misrepresentation

regarding the quality,

nature, class, origin or

composition of a dairy

product.

However, the current

Regulations are slightly more

lenient, allowing the use of words

such as “natural,” “super” and “extra”

or any other words which suggest that

the dairy product is of a special or particular

quality, only if the word or expression is part

of a trademark. The new R260 eliminates this exception,

prohibiting, outright, the use of words such as “natural,” “super”

and “extra,” “pure” or “fine” or any other words that suggest that

the dairy product is of a special or particular quality.

This has far reaching consequences

for dairy product manufacturers, who

incorporate words such as “super”

and “extra” into the names of their

products usually as part of their

trademarks.

In addition, R260 states that no

registered trademark or brand name

that may possibly, directly or by

implication, be misleading or create

a false impression as to the contents

of a container that contains a dairy

product shall appear on that container.

Parmalat SA has announced that its

former range of low fat yoghurts will,

in line with producers, it is also good

to know that discerning consumers can

continue to enjoy the same great taste

and quality that is so much a part of

what we love about Clover.

16SUPERMARKET & RETAILER, OCTOBER 2016

FOOD FOCUS: DIARY ▲

Class milk & yoghurt R2 581 of 1987 R260 of 2016

High-fat At least 4,5% More than 4,5%

Full-fat At least 3,3% 3,3 – 4,5%

Medium-fat N/A 1,5 – 3,3%

Low-fat At least 1,5 but not more than 2,5% 0.5 – 1,5%

Fat-free Not more than 0,5% Less than 0,5%

NEW CLASSIFICATION

Additional information: http://www.mondaq.com

▲

THE DISTINCTIVE VALUE OF CUSTOMISATION

stud

iove

rde

W O R L D

W O R L D

Simple, efficient and elegant. These are the three key characteristics of the Venezia 2 refrigerated cabinet, in which the mechanical parts have been reduced in size to accommodate larger glass panels and offer a clearer view of the quality products on display. A wide range of customisation options plus minimalist design permit the creation of evolved layouts in all retail contexts, to the benefit of practicality and functionality.

Venezia 2

The power of a global enterprise

Style, Taste, Tradition and Exclusive Quality: the world embraces the “Made in Italy” trademark.

SOUTH AFRICA www.arneg.co.za

NOW PRESENT IN SOUTH AFRICA

Arneg Group has 20 production plants and 12 Service companies in 25 different countries around the globe. With a turnover in excess of €550 million, it boasts a comprehensive product range that includes cabinets, racks (compressor systems), checkouts, shelving, cold rooms, doors, plug-ins and related services. Our Italian character is not just a label, but an expression of a wider, more complex concept that embraces heart and mind, instinct and design, national character and individual talent.

Arneg has made this Italian character its strength, its crowning achievement and the core of each of its creations. So much so, Arneg wants to export it globally.

Office 2, ground floor,

Liesbeek House, River Park,

Glouchester Road,

Mowbray, Cape Town

YOUR NATURALLY INNOVATIVE PARTNER FOR RETAIL SOLUTIONS

■ You may need a separate policy to

insure against theft by an employee.

Protecting company assets■ Company assets include things that

cannot be seen, or that only exist on paper

or hard drives. Intangible company assets

such as these can be more difficult to

insure and much more difficult to recover

if lost or damaged. However, there are

policies you can put in place to protect

your assets.

■ When looking at insurance policies, add

up the cost of recovering computer data

and all other electronic information on

top of the cost of replacing/repairing your

computer hardware.

■ Apply for patents, copyrights and

trademarks on all intellectual property.

These legal documents will detail your

ownership and protect you legally. You

can apply to the relevant governmental

departments for all patents and

trademarks.

■ Password protect your company

computers and safes, and lock your filing

cabinets. These measures can restrict access

to confidential or proprietary information.

■ Back up all important and relevant data.

Digital documents should ideally be backed

up on a server that is in a different location

to the one your company uses.

■ Employment agreements should

stipulate that all employees have a right

to keep company information confidential,

and that any original material developed

in the course of an employee’s time at the

company remains the property of

the business.

When you leave your house, you

lock your front door to protect

your personal belongings inside.

But are you protecting your

company’s assets in the same way?

Insuring company equipment and protecting company assets is an important part of ensuring the longevity and success of your business.

Company assets cover anything of value your company owns – including cash, stocks, bonds, any raw materials, land, buildings, computers, furniture, security equip ment; and intangible assets such as patents, copyrights and intellectual property.

Insuring company equipmentYou can insure company assets of any size or worth, from mobile phones and laptops to security equipment.

If any of your company equipment or property is damaged or destroyed, you must not only factor in the cost of replacing the items, but also the business income you will lose as a result.

■ Read the small print to make sure that you are covered for everything you need to be and that the policy covers all eventualities such as theft, fire and floods.

■ Ensure you update your insurance policy when you buy more equipment to guarantee all new purchases are covered.

■ Remember, premises insurance only covers the building, not the contents.

■ Make sure you choose insurance that covers the replacement cost of the equipment rather than the actual cash value. It may be slightly more expensive, but will ensure that you can claim for the cost of your company assets in the event of destruction.

■ You can ask your insurance company for a business-equipment insurance consultation to make sure you are covered for every possible scenario.

■ In most cases, contents will be insured against theft providing there has been forcible entry (or exit) to the building. If your company building is damaged as a result of the theft (or attempted theft), this will usually be covered as well.

Financing equipmentChalk it up to simple economic realities, but a capital expenditure requires quite a bit of forethought these days. Should you buy the equipment you need with cash, or should you apply for a loan or lease the equipment you need?

“If you are a business having difficulty

raising capital, one consideration may be

an equipment loan,” says Gabe Makhlouf,

first vice president in commercial lending

at First State Bank. “Another option would

be to tap into the equity in existing

equipment to obtain 100% financing.

There are types of equipment, such as

computer hardware, software, restaurant

equipment and office furniture that are

difficult to finance, and leasing may be the

best alternative. In these cases, the leasing

company is the owner of the equipment

and assumes the risk of obsolescence or

later marketability in a limited market.”

What should business owners consider

when determining how to finance

equipment purchases? Many factors come

into play, such as types of equipment

and its useful life, economic conditions,

tax consequences or advantages, and the

company’s current financial condition.

Questions to ask include, how long are you

keeping the equipment? Can you utilise

the tax benefits? If cash flow is an issue, is

100% financing more attractive via a lease

or SBA loan than a conventional term loan

where a 20 percent down payment may be

required?

Although there are many individual

advantages to purchasing equipment

with cash or a loan versus leasing, these

advantages can be placed into the

following categories.

■ Long equipment life. Companies tend to

keep equipment around longer than they

have in the past. When you get that initial

piece of equipment and make your decision

on financing, think long term and make

sure you understand its value to your

18SUPERMARKET & RETAILER, OCTOBER 2016

FINANCING AND INSURANCE ▲

The importance of insuring company assets

I’m a Lover.Thanks to Axis video solutions, we’ve gained valuable business insight. Now, we can analyze customer flow, optimize store layout and measure buying activity. Our customers are happy – and so are we.

Find out more at www.axis.com/lovehate

Axis video solutions for retail. Proud to be loved.

I’m a Hater. Before the store got Axis video solutions, I’d take whatever I wanted and never pay so much as a cent. Then, everything changed – and now I’m paying the price.

Find out more at www.axis.com/lovehate

Axis video solutions for retail. Proud to be hated.

axis_ad_retail-lovehate_supermktretailer_a4_en_1609.indd 1 2016-09-12 09:41:39

20SUPERMARKET & RETAILER, OCTOBER 2016

business. If the equipment you are purchasing does not have an

obsolescence risk, has a lifespan of 15 to 20 years and you want to

keep the machine, you are better off purchasing, as you will own

the equipment long beyond its depreciable life.

■ Tax benefits. There are tax benefits associated with new

equipment acquisition and ownership. If your business has seen

production and profitability increase, you could take optimum

advantage of those benefits. In the past few years, government

programs have been created to help jumpstart the economy, which

allowed 50 to 100 percent depreciation for equipment in the year

that equipment was placed into service. If you lease, it may be

possible to pass bonus depreciation on to the lessor and do a true

lease because you could receive a lower payment structure. The

lessor would take the depreciation benefits and then pass those

back to you in the form of a lower rate. Make sure you understand

the tax ramifications of your equipment financing by consulting

your CPA.

■ Payments based on current cash flow. With a loan, you know

exactly what your monthly payments will be and they usually

remain the same throughout the term of the loan. Your loan

payment is based on your current cash flow. With leasing, you

need to be careful not to fall in the trap of initial lower payments

that progressively increase. Oftentimes, this method is factoring in

future performance that may not materialize to step up payments.

With conventional financing, payments are based on current cash

flow and rarely factor in future performance.

■ Refinancing available. If your lease rates were set during a time

when your company wasn’t performing as well as it is now, your

rates may be higher than what you could obtain today. Most leases

implement prepayment penalties that can render prepaying the

lease almost impossible, as they require that all future full lease

payments be made in order to fully pay the lease. When compared

to conventional financing, companies can prepay equipment

loans that are variable rate-based without incurring a prepayment

penalty; even fixed rate loans have a preset and predetermined

prepayment penalty that decreases with the life of the loan.

In this recovering economy, many companies that have delayed

equipment purchases may think they can easily purchase used

equipment. However, that has proven difficult, as inventory is

limited and, consequently, prices have risen. As a result, many

companies are shifting toward buying new equipment as the cost

and benefits outweigh buying used.

You may believe that if you have the cash available to acquire

necessary new equipment, you should pay with cash, because it

is less expensive than financing the equipment through a bank or

equipment finance company. But it is important to ensure that

your business remains liquid and has plenty of cash available to

manage through any setbacks. A business can fail because of a

shortage of cash, even while showing accounting profit. Also, the

greatest opportunities to grow and expand often appear in times

of market turmoil, and it takes cash to take advantage of those

opportunities.

Talk to your banker about a financing solution that optimizes

your cash flow while meeting your accounting and tax objectives

and your business needs. Interest rates are low and lenders are

eager to help in this area.

Additional information: www.nfumutual.co.uk and http://www.sbnonline.com

FINANCING & INSURANCE ▲

2016

-09-

26 E

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2017

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103

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Lighting at EuroShop 2017.

The enchantment and impact of special

effects. At the world’s No.1 trade fair –

the new EuroShop.

EuroShopAll Dimensionsof SuccessThe World’s No. 1 Retail Trade Fair

5 – 9 March 2017Düsseldorf · Germany • www.euroshop.de

See the lightin your own world.

Southern African - German Chamber of Commerce and Industry47 Oxford Road _ Forest Town 2193

JOHANNESBURGP.O. Box 87078 _ Houghton 2041

Tel. +27 (0)11 486 2775 _ Fax +27 (0)86 675 [email protected] _ www.germanchamber.co.za

2016-09-26 EuroShop 2017_Sudafrika_Lighting_103 x 297 +5mm_Supermarket & Retailer _4c_5772.indd 1 22.09.16 09:32

21SUPERMARKET & RETAILER, OCTOBER 2016

In-store lighting has always been an

important aspect of visual merchandising,

but recent advancements in tunable white

lighting and LEDs have armed brands

with new and increasingly subtle ways

of influencing customer experience. For

example, stores can use tunable white

light to highlight product displays or

complement the light levels outside so

that intensities like bright lights at night

or poorly light shops during the day aren’t

jarring for customers. Tunable white

lighting can also allow brands to change

the feel of their store after-hours in the

case of hosting private events.

Brands have also begun to harness

the power of LEDs. Since LED shape and

execution are flexible, they can be used

in stores in a multitude of ways, such as

in grid formation to emphasize product

displays or draping from walls to alter

an ambiance. In addition, the advent

of structural LED tubes has provided a

way to create 360-degree diffused glow,

eliminating dark patches and accentuating

pieces of merchandise.

As a sturdy and low maintenance lighting

option, brands have begun experimenting

with embedded LEDs, which can be

integrated into different

store displays and are

programmable. “As LEDs become

smaller and more compact, and their

outputs become brighter,” said Nelson

Jenkins of Lumen Architecture, “it’s easier

to integrate those sources into architectural

details, like behind backlighting surfaces or

cove cavities.

2. Going digitalMany brands have begun to integrate

technology into their in-store visual

merchandising approaches, both because

of the ease it affords employees and

customers, and also because of the

environment it creates: modern, sleek and

high-end. Engaging graphics, colorful video

footage and electronic flat screen displays

work well together to create a consistent

brand image around multiple product

offerings.

Tablets have become popular as well

from both a customer and employee

perspective. Customers using them are able

to quickly learn what a product is, how

it’s used and why they should purchase it.

Employees are able to move about a retail

space with all the information they need at

their fingertips.

Technology is changing the way visual

merchandising takes place in that it allows

stores to change their in-store content

anytime they want.

Digital displays can

offer special price

promotions one day

and debut a new

collection another

day. They could even

be tailored to reflect

current topics in pop

culture, or feature

different types of

merchandise at

different times of

the day. In addition,

technology displays

usually take up less

space than physical

merchandising props

do, gifting brands with

even more flexibility

in their store layout.

Visual merchandising

is a subset of retail

merchandising that is part art

and part science. As a result of

this dual nature, it seems to be

constantly in flux, adapting to

changes in taste and technology.

Building brands, driving sales, controlling

costs, and preserving the all-important

“look and feel” … who said retail lighting

was easy?

For brands in brick-and-mortar locations,

staying on top of visual merchandising

trends is one key way to get ahead of the

competition. While you may know your

target customer inside and out, the truth is

that consumers continually expect more.

A poll conducted in =2015 revealed that

82% of US corporate executives said that

customers’ expectations of their company

were “somewhat (47%) or “much” (35%)

higher than they were three years ago.

To retain loyal customers and capture

new sectors of the market, brands should

check out the five trends in virtual

merchandising described below and

implement those that make sense for their

product offerings.

1. LED lighting Retail was one of the first sectors to start

dabbling in LED lighting, because of the

big energy savings

that can be made

by replacing

electricity-guzzling

halogen spotlights.

Major retailers are

announcing big new

rollouts nearly every

day: Sainsbury’s, Tesco,

Next, Walmart…

but it’s still a small

minority of stores

that have switched to

the new technology,

and it’s mainly the

bigger chains with

significant resources

and economies of

scale behind them. In

time, though, it seems

inevitable that LED

will be everywhere.

STORE LIGHTING ▲Eco-friendly designs are being acknowledged not only for their positive effect on a electricity bill,

but also for their ability to increase brand recognition and strengthen customer loyalty.

Let there be light

online market is through the use of visual

merchandising that appeals to the five

senses. When customers are browsing a

site’s online product offerings, they are only

observing the merchandise with their eyes.

In stores, however, vendors can appeal to

touch, hearing, smell and even taste.

Scent marketing is becoming more

widely used as a result of research

that connects smell with emotion and

memory, two prominent factors behind

brand choice. For example, the Lincoln

automobile’s rebranding includes a new

scent in showrooms combining green tea

and jasmine. Musics has always played an

important role in visual merchandising

and branding as well, with stores like

Abercrombie & Fitch and Hollister earning

a reputation for their deafening playlists.

In addition, stores have begun utilizing

interactive displays to attract prospective

customers and engage with them. Shoppers

should have the opportunity to touch

and try out whatever is on sale in a store

before deciding to purchase. According to

a report compiled after the 2016 Global

Shop event, multi-sensory user experiences

encourage more comprehensive interaction

with merchandise, and interactive elements

let products speak for themselves. Even

the sense of taste can be engaged by those

brands who are in the business of selling

consumable goods.

5. Mannequins with personalityWith the rise of ecommerce and online shopping, traditional brick and mortar stores have been forced to think outside the box when it comes to getting consumers in their doors. Mannequins offer one such option; they are a 3D perspective on clothing and accessories different from the 2D images consumers see online. In 2016, vendors have been experimenting with mannequins that are fun, relatable and real rather than simply a faceless vehicle for clothing.

“The lesson for retailers is that the whole entire mannequin is the focus, not just the clothes,” Faith Bartrug, owner of Faith Bartrug Designs, told VMSD Magazine. “The next-generation consumers want to see a story, and the mannequin becomes part of the sell.”

In addition, mannequins are being crafted with personality. Some brands, like Zara and Kate Spade, showcase a twist on the typical, abstract mannequin. Black tape over one eye can make a mannequin appear to be winking, while removable red lips can dress it up for Valentine’s Day. Incorporating different materials, like metals and woods, has become popular as well. Stores are realszing that mannequins offer more than just a practical purpose, and are great vehicles for branding and engaging on a deeper level with consumers.

At the end of the day, visual merchan-dising decisions are a mix of scientific research, an eye for aesthetics, and good luck.

Not every retail merchandising trend will be a perfect fit for every store, nor is this list of trends exhaustive. As long as you track the results of your visual merchandising experiments carefully, you’ll be able to easily ditch the practices that don’t work and stick to the ones that do.

Additional information: https://www.repsly.com/blog/consumer-goods/visual-merchandising-trends-2016

22SUPERMARKET & RETAILER, OCTOBER 2016

STORE LIGHTING ▲

Since LED shape and execution are flexible, they can be used in stores in a multitude of ways.

Technology is changing the way visual merchandising takes place in that it allows stores to change their in-store content anytime they want.

3. Going greenMany of the hurdles that have traditionally

prevented brands from making a

commitment to eco-friendly practices, such

as an expected low-return on investment,

are disappearing due to evolving materials

and cheaper options. Most important in

motivating the move towards sustainability,

however, is that consumers have begun to

demand brands that match their values.

An increasingly competitive retail market

only exacerbates the pressure on brick and

mortar stores to bend to the will of the

consumer.

Eco-friendly designs are being

acknowledged not only for their long-term

positive effect on a utility bill, but also for

their ability to increase brand recognition

and strengthen customer loyalty. Since

most brands have online sites as well, it’s

easy for customers to quickly search and

read about its environmental commitment

(or lack thereof).

Popular sustainable design practices

include using materials such as reclaimed

wood, regionally sourced substances,

renewable resources and LED lighting.

Retailers like Gatsby in Venezuela feature

brightly colored ottomans made of

neoprene that was originally slotted for

landfills. The design firm hired to turn

Gatsby’s commitment to green values

into action, Álvarez-Díaz & Villalón,

told VMSD Magazine that the store

“became a museum piece and provides an

environment in which people want to take

pictures and upload them to Facebook and

Instagram and tell their friends ‘I went to

this store and look at this cool chair’.”

4. Look, listen, smell, taste and feel

Another way that brands have been

differentiating their stores from the vast

Food inflation in South Africa

currently stands on a staggering

11,3%.

It is almost double the consumer price

index on all items, which was 5,9% for

August this year. Inflation of fruit is 20%,

and for vegetables it is 15,4%. Sugar,

sweets and desserts are on 20,7%. Breads

and cereals are on 16%, which has a direct

impact on lower-income consumers.

Consumers are without a doubt feeling

the pinch and are forced to be a lot more

careful when buying food for their families.

And with salary increases not keeping up

with the rise in food prices, supermarkets

will also experience the pressure of

customers no longer able to shop in the

same way they used to.

Difficult times call for innovative

thinking, and supermarkets all had to

rethink their way of doing business.

The Shoprite Group is constantly looking

at ways to keep prices low for consumers.

The Group has, for example, started

doing basic food subsidies three years

ago, dropping the prices of selected basic

foodstuffs such as bread, oil and maize

meal as close as possible to cost price, and

sometimes below, for extended periods.

Over the last year alone, the Shoprite

Group subsidised products to the value of

R32million.

“This truly is an illustration of our

commitment to customers – it’s more than

just a marketing mantra though – it’s at

the core of everything we do,” the Group

said in a statement.

“As a result of these efforts, the Group

has maintained the pace of internal food

price increases consistently below official

food inflation. During the 2016 financial

year, The Group maintained internal food

inflation at a rate of 3,5%.

“Feedback from consumers has been

overwhelmingly positive, with 29 million

people or 76% of the adult South African

population now choosing to frequent the

Group’s supermarkets.”

Big Save, a supermarket group doing

business in the lower LSM segment of the

market, tries to keep its running expenses

at a bare minimum to stay competitive and

to make food affordable for customers.

Tony Ferreira, operations director of

Big Save, says the high food inflation over

the last five years made it very difficult

for retailers and wholesalers to stay

competitive.

“Our customers have been receiving

salary increases of between 4% and 6%,

which makes it almost impossible for them

to keep up with the food inflation sitting at

11.3%.”

Ferreira says Big Save has recently

entered the house-brand market in an

attempt to make food more affordable.

“We have recently launched two private-

lable products: maize meal and flour. These

products are between 8% and 10% cheaper

than the other brands we stock, which is a

big help to our customers. These are high-

quality products, because we believe that

our customers deserve the best.”

He says Big Save also negotiates with

suppliers for better prices on goods

customers buy every day.

A loyalty programme, Brand Back,

has also been introduced to help to

communicate special offers on certain

brands to customers. Through this

programme, loyal customers are rewarded

instantly at the till (with free airtime, for

example) when they buy selected products,

are top buyers, buy certain package sizes or

buy a fixed amount of product.

This initiative has shown enormous

growth, says Ferreira.

But tough times still lay ahead for

supermarkets and their customers. With

meat prices set to increase as the festive

season approaches, innovative thinking and

planning will be necessary to negotiate the

stormy seas.

23SUPERMARKET & RETAILER, OCTOBER 2016

Category %

Processed foods 11,3

Unprocessed foods 11,8

Bread and cereals 16

Meat 5,4

Fish 9,6

Milk, eggs and cheese 9,6

Oils and fats 17,5

Fruit 20

Vegetables 15,4

Sugar, sweets and desserts 20,7

Other food 10,8

Hot beverages 17,9

Cold beverages 4,9

Consumer price index

5,9%

Consumer price index:Food and non-alcoholic beverages

11,6%

August 2016

FOOD INFLATION High food prices pinch customers and supermarkets

The flowers are packed, wrapped and

priced according to the specifications

required by these supermarkets. It is then

delivered directly to the supermarkets of

to their central distribution centres from

where it is delivered to the different stores.

According to Burger van Zyl, purchase

manager of Flower Centre, a service where

they look after the flowers for sale in stores

on behalf of the stores is also available. This

service includes maintaining and watering

the flowers, getting rid of old flowers and

supplying more flowers when necessary.

Between 80 000 and 1 million

flowers are sold every day at the

Johannesburg fresh-flowers market

in just three to four hours, most of

which end up in retail.

With some 600 flower growers on its

books, Multiflora, with a staff of 144

people, is the largest flower auction house

in Africa. It is also the only flower auction

house in South Africa.

This 50 000m2 specialised flower auction

space sees some 300 million flower stems

a year pass through its doors. Between

300 and 900 trolleys pass the four auction

clocks every day. At least 80% of these

flowers are grown within 300km of

Johannesburg. The rest come from the

Western Cape, KwaZulu-Natal, and the

northern regions of the country, as well as

from as far afield as Kenya, Zimbabwe and

other African countries.

The auctions, which take place Mondays

to Saturdays from 07:00, are attended

by some 400 buyers, wholesalers, venue

operators, retailers and florists. Buyers for

other African countries also attend the

auction and buy flowers that are exported

to the rest of Africa.

The auction house operates 24 hours

a day, seven days a week and flowers are

delivered by farmers on a daily basis for

auctioning the next day. Almost all the

flowers that are offered during the auction

are sold and there is very little wastage.

The auction process is fully automated

from the point where a buyer places a

bid to the point where he pays and takes

possession of the order. All orders have to

be paid on the day of the auction.

The wholesalers then distribute the

fresh flowers to almost every city, town

and village in South Africa and, in some

cases, export it to other countries. Some of

the wholesalers have retail outlets in the

Multiflora Flower Hall and sell directly to

florists and members of the public. Other

services offered include creating gorgeous

bouquets and packaging for supermarkets.

Multiflora also sells flowers directly to

retailers, but only where there are fixed

orders.

The Flower Centre, one of these whole-

salers, is also located in the Multi Flower

Hall and supplies flowers to, among others,

Spar, Pick n Pay and Food Lovers Market.

“In some cases, like with some Food

Lovers’ Market stores, we also place staff

inside the store and run a florist from

a section of the store. We then handle

customer service and customers can order

flowers according to their preference,” he

says.

With supermarkets like Pick n Pay, for

instance, orders are placed at the beginning

of the season and prices are agreed to.

Flower Centre then delivers in accordance

with the agreement for the rest of the

season.

24SUPERMARKET & RETAILER, OCTOBER 2016

FRESH FLOWER INDUSTRY By tArinA coetZee

Flower Centre supplies flowers to Spar, Pick n Pay and Food Lovers’ Market.

25SUPERMARKET & RETAILER, OCTOBER 2016

According to Van Zyl, the summer season is

more profitable than the winter season.

“What makes it more difficult in the winter is

the fact that we have to import flowers, and with

the volatile exchange rate, this can be tricky.”

In South Africa rose farms dot not use heating

during the winter months to keep the supply

of roses going as the practice is in some other

countries, which means that we have to import

roses during the winter months.

Sonja Pretorius, business relationship manager

of Multiflora, says keeping flowers fresh and

beautiful up to the point where the customer

takes it home is not easy.

“Selling flowers in your store is hard work. You

need someone dedicated to look after your flower

department. Flowers need the right amount of

water and every time a customer picks up a flower

and doesn’t put it back in the water properly, you

lose that flower. Because of this, many retailers

think twice before the offer flowers in their stores.

There is also a nursery in the Multiflora

Flower Hall that sells pot plants wholesale to

supermarkets as well as to other retailers.

According to Pretorius, business relationship

manager of Multiflora, she got the idea for a

nursery selling pot plants during a trip to Holland.

“We always sold pot plants using a catalogue

and when I saw a similar nursery in Holland.

I just had to try it and it is working really well.

Our turnover on pot plants has increased ten

times. We also sell to the public, but offer

wholesale prices to retailers,” she says. Although

it may seems like hard work, selling flowers in

your store can attract customers looking for a

last-minute gift and can also result in an impulse

purchase for a customers who just cannot resist

the beauty of a bunch of fresh, fragrant flowers.

Buyers from all over the country, as well as from other African countries, attend the daily flower auction.

Pot plants are sold to retailers as well as to members of the public.

Queue stands

Carrefour, a new mid-sized

supermarket in Turin, Italy, is a

model based on top-class service –

24 hours per day, 7 days a week.

A recently renovated Carrefour store in

Turin in Italy has been named Carrefour

Market with a sub-slogan “Ti adoro” (I

adore you). The 785m2 store has moved

away from the image of convenience (it

stocks 8 500 stock-keeping units) and

is embracing a service formula to retain

customers.

Currently the store is averaging R2 million

per week in sales and employs only 18

people (salary costs in Europe are very high,

but so is the productivity per employee).

Projections for the year is that the store

can reach sales of more than R100 million

in the next 12 months.

The core of the businessAll fresh departments have been located in

a “fresh square” and the emphasis on these

departments accounts for 35% of turnover.

This area includes a serviced and self-

service bakery and coffee shop, as well as

butchery, deli and fish (including self-

service sushi meals) departments. After

hours, all of these departments become

self-service and the consumer has been

educated not to expect to see sales

assistants serving after hours.

Groceries, wine and non-food items

account for 40% of sales and perishables

account for 25% of sales.

Supply chainThe distribution centre is located 20km

away at Rivalta and regular deliveries arrive

at the basement storage area. Goods are

then carried to the ground floor via a lift.

Some displays, especially of promotional

stock, are merchandised in the storeroom

on cleartainers and then rolled on to the

sales floor for display.

The Blue BoxA special counter is available for

professional services, where three staff

members alternate between 9:00 and

21:00. The service offering includes

immediate contact with specialised

craftsmen: shoemakers, tailors, blacksmiths,

electricians, plumbers, maintenance of

air conditioners and boilers.

26SUPERMARKET & RETAILER, OCTOBER 2016

WORLD WATCH By Antonello VilArdi, Retail Watch AdApted By HIPPo ZoURIDeS

The supermarket is located in Turin in Italy and services the local community. Some parking is available on site, but many people walk to the store.

CARREFOUR URBANO: A new supermarket model

The Market Cafe located next to the bakery includes self-service coffee machines.

The Avengers promotion is evident throughout the store. Some special offers are packed in the storeroom in rolltainers and then rolled into the selling area.

Convenience foodsThe lunchbox option

allows customers to

order items for lunch

online, pick them up

in-store and the goods

can be taken away or

consumed at a sit-down

area located behind the

checkouts.

The self-service Market

Café allows customers

to pay at the checkouts

and then consume their

coffee, juices and pastries

at a counter where they

can use tablet computers

with free Internet

connections.

LoyaltyThis store format makes use of the

Carrefour Payback loyalty card that can

also be used at Carrefour hypermarkets and

Carrefour Market and Carrefour Express

stores.

The loyalty card initiative involves many

partners active in various sectors and the

corporate campaign is enhanced by the

ability to promote incentive collections.

Incentive schemes are very popular

in Europe and other chains have similar

initiatives, such as Esselunga with Rollinz

and Lidl with Stickeez. The way to the

consumer’s pocket seems to be via their

kids’ enthusiasm for these collections!

Stephane Coum, business unit manager

of Carrefour Supermarkets, has indicated

that new similar formats will be opening in

the cities of Milan, Rome and Cremona.

This counter also offers a laundry service and customers can pay their municipal accounts.

Tickets for cultural and sporting events can be bought at the counter and customers can make photocopies, print photos, and even recharge cell phones.

Order-and-collect shopping is available to customers, who place orders on the internet and collect from the Blue Box counter.

Dog owners can attach their dog leashes to hooks outside the front door and clean water is supplied for their animals.

27SUPERMARKET & RETAILER, OCTOBER 2016

The windows indicate to the passer-by the great variety of services available in the store.

Pre-packed sushi meals complement the fish department.

While the store is compact, wide aisles have been planned around the service departments and the refrigeration to allow for customer comfort.

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Supermarkets need to start thinking

about their share of throat as far as food is

concerned.

The competitionAs one thinks about this, consider what

you sell in your store and then analyse the

nearest competition in your area.

The obvious starting point is the grocery

department and we know that all the other

supermarkets and convenience stores in

your area are your competitors.

As you move to your service

departments the comparison is more

difficult to identify even if you have an

outstanding delicatessen with a great

By hippo Zourides

Retailers need to start thinking

differently about what makes up

their competition. Beyond the

traditional supermarkets and

convenience stores, our consumers

are finding different solutions to

feed their families outside our

stores.

Traditionally food retailers in South Africa

have looked at their nearest competitor

as the corporate chain nearby or some

independent trader and lately, the garage

convenience stores that have cropped up at

every petrol station in our neighbourhoods.

It has become obvious that our vision

of a competitor must be enlarged. Our

research shows that our customers/

consumer/clients have so many options

at their disposal today that we have to

consider new competitors, that is, every

outlet that takes some of their rands for

feeding purposes.

The Coca Cola Corporation, the world’s

biggest drinks manufacturer, analyses their

market and in their terminology, they look

at “share of throat” – when drinking one of

their products, what is their share of every

liquid that goes down a consumer’s throat

– cool drinks, water, tea, coffee, juices,

wine, beer, alcohol, hot chocolate and

every other beverage hot or cold that the

customer consumes.

home-meal replacement (HMR) section

and/or a coffee shop or restaurant in your

store.

It is well known that time-starved

consumers today are cooking less at home

and prefer the convenience of ready-to-eat

or ready-to-cook food. Are you in this part

of the market? If the answer is Yes, well

done! If the answer is No, you had better

start doing something about it as you are

losing an enormous amount of extra sales

and profitability.

The competition in this sense is not

only made up of the other supermarket

HMR sections, but also all the local take-

away joints, be they burger, chicken, pizza,

Chinese, Thai, Indian, Greek or such like fast

food outlets.

But the biggest competitor that has

reared its head lately is the plethora of

new and innovative restaurants that

entice our customers with a variety of

appealing offerings, be the “build your own

meal” to “Buy one and get one free on

Mondays” to “25% off on Wednesdays”

offers. These offers are taken into account

by our customers who decide, at times

impulsively, to take out the family for a

meal on a given night or at lunch time, as

they perceive that they cannot make the

same meal for the advertised price. And the

convenience factor is just as important.

But more than price, experts tell us that

restaurants appeal to our senses by sticking

to three major focus areas. Lee Paterson,

the executive vice-president for brand

strategy and design at WD Partners, says

30SUPERMARKET & RETAILER, OCTOBER 2016

NEW TRENDS ▲

Cash in on all the workers who pop out for a quick breakfast by preparing a wholesome breakfast that can be taken back to the office.

Is eating the new retailing?

Consider healthier offerings for lunch such as fruit salad packs banded together with yoghurts at a good price or protein/salad combinations.

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successful restaurants have always been

obsessed with three things:

1. Quality of product – that means

manufacturing a quality product on

site

2. Service – from the front of the

restaurant when the customer is

welcomed to the final delivery of the

bill

3. Atmosphere – creating a distinct and

welcoming environment“

So, before we analyse some tools to fight

back against this type of competition

and ensure that we get a largest share of

throat, spend some time analysing the true

competitors in your trading areas (primary

area within 2kms and secondary area

within 5kms as well as nearby shopping

centres).

List everything that you can think of:

supermarkets, trading stores, convenience

stores, garage forecourts, restaurants, take-

away establishments, food carts and in

some cases, street vendors.

Apart from listing the names and

locations of such competitors, analyse

their menus and pricing structures and by

visiting them all look at the atmospheric

attributes of the place that appeal to your

customers. You will be amazed to learn that

you can emulate a great deal of the ideas

already out there. They are jealous of your

foot traffic as your store is invariably a

magnet in your shopping environment but

they add something extra to their offering

to attract the same clients to them. Work

out what that “something” is.

Breakfast deal – many commuters may pop in for a quick breakfast on their way to work. Look at ways to pick up their next breakfast needs by preparing a wholesome and good looking meal that can be warmed up in store or at the work place.

How good is your coffee? Coffee has become a huge attraction to many consumers. A forecourt convenience store changed brands of coffee recently and the owner claims that his sales went up from 20 to 110 coffees per day as the new brand has more consumer equity. Do not skimp on this initiative – research this matter well and stock only the best quality coffee. Also ensure that your staff goes to barista training (can be up to a week-long!) so that the good coffee beans are ground properly and the right techniques are used when serving a macchiato or an espresso!

Deliveries – do you have this service in your store? Outsourcing of deliveries can be arranged but the decision must be made whether the customer picks up the tab or whether the price of the meal includes the delivery cost. The writer once shared the delivery costs of a motor bike and delivery man with his local pharmacy – both businesses won at the end! Medicine deliveries were scheduled away from the pre-lunch and pre-dinner times which were allocated to the supermarket but often delivery rounds were planned to cover both food and medicines on the same trip.

There is no doubt that you are able to get more of your customer’s Rand in terms of their food expenditure. The challenge is to find ways to do so by being innovative, aggressive and resolute. Do not postpone this decision as your competitor is already doing something about it.

32SUPERMARKET & RETAILER, OCTOBER 2016

NEW TRENDS ▲

Supermarkets need to start thinking about their share of throat as far as food is concerned.

The competition is not only made up of the other supermarkets, but also all the local take-away joints.

So how do we fight back?Let us focus our efforts primarily on the

service departments but our grocery

offering must also get some attention.

Meal Kits – work out a menu for the

housewife for tonight and prepare a meal

pack consisting of all the ingredients

according to a cooking recipe (the meat,

the deli products, the fresh vegetables, the

spices, the sauces, the bread and even the

drinks). Type out the recipe to be included

in the meal pack and put up a slogan

“A meal for four for tonight for less than

R200”.

Healthy offerings – other than the usual

sandwiches and pies for lunch, have you

consider healthier offerings for lunch such

as fruit salad packs banded together with

yoghurts at a good price or protein/salad

combinations for the slimming conscious

amongst us?

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Woodlands’ flavoured milk claims silver at AfriStar awardsFirst Choice UHT Flavoured Milk

from Woodlands Dairy in Tetra

Pak’s Tetra Brik Aseptic 250ml edge

has claimed silver for best paper

board or board pack in the overall

APo AfriStar Awards 2016.

Woodlands in Tetra Pak was one of only

15 African medallists. First Choice UHT

Flavoured milk was selected for best in

category, best in substrate, special awards

and the overall AfriStar Trophy, due to its

unique packaging in the Tetra Brik Aseptic

250ml Edge with Heli Cap that features

The innovative new package shape

with improved functionality and added

convenience offers easy handling for

on-the-go consumption and packaging

material is a multi-layer structure

that is 100% recyclable and delivered

to customers in reel format. Material

components and layer grammage are

continuously developed to achieve optimal

performance using minimal resources

through technical developments with

suppliers and in Tetra Pak converting

factories.

one-step opening and is perfect for on-the-

go consumption.

“The Tetra Brik Aseptic 250 Edge provides

a carton look that today’s consumers are

familiar with but its distinctive sloping

top panel, elegantly contoured side

panels combined with its compact square

bottom format add a new, modern and

differentiating profile to portion packaging

to help brands stand out on busy ambient

shelves or at any point of sale,” says Gisele

Gurgel, marketing director of Tetra Pak

South Africa.

34SUPERMARKET & RETAILER, OCTOBER 2016

New cookbook for healthy meals on a budgetPlanning and preparing healthy family meals can

prove to be quite challenging, especially when the

budget is tight.

Clover’s new cookbook, Economical Family Fare contains 100

delicious, low-cost meals that are guaranteed to be a hit with

family and friends, but won’t break the bank.

Clover’s Economical Family Fare covers everything from

soups and light meals to main meals such as a classic potato-

and-bacon dish, a delicious broccoli cream soup with croutons,

a mincemeat roll with mushroom sauce, a tasty spinach-and-

butternut lasagna and a blissful cold tropika pineapple pudding, just to mention a few. It is

the perfect cookbook for anyone on a tight budget who does not want to sacrifice flavour,

nutritional value or the satisfaction of preparing good, nutritious food.

To help make the book more affordable to the public, Clover has covered a part of its

development costs. In addition to this, a percentage of the book’s sales will also be donated

to the Clover Mama Afrika project. The project identifies women who are already agents of

change in their communities and helps train them to become self-sustaining women with

skills which then they can use to derive income from, in order to support orphaned and

abused children and the elderly and infirm.

Clover Economical Family Fare is also available in Afrikaans as Clover Ekonomiese

Gesinskos. The books are available from leading retailers and direct from LAPA Publishers.

2.5mm thick

metal housing

YOUR CUSTOMERS DESERVE QUALITY. YOU DESERVE DURABILITY.

You need to consider the following when

buying a trolley:Tried & tested structural

design & superior welding

Load-bearing wire base

Quality electro-

plating plus clear

lacquer coatingQuality UV-resistant plastic components

CG

SR

011

Contact [email protected]

for our electronic brochure

HEAD OFFICE - CAPE TOWN

Tel: +27 (21) 937 7123Fax: +27 (21) 937 [email protected]

DURBANTel: +27 (31) 709 2670Fax: +27 (31) 709 [email protected]

PORT ELIZABETHTel: +27 (41) 486 2538Fax: +27 (41) 486 [email protected]

JOHANNESBURGTel: +27 (11) 483 8541Fax: +27 (11) 339 5187

[email protected]

Correct wire diameter & spacing

High quality TENTE castors & wheels with precision bearings

Superior back gate design & fit

Cape Gate offers a complete range of the highest quality trolleys, to meet all retail requirements. Trolley Range for all store sizes: 85 L, 100 L, 130 L, 160 L, 180 L, 210 L & 235 L

100% SOUTH AFRICAN

Left is Kaveer Harripersadh, regional sales manager inland at Woodlands Dairy, and Penny Ntuli, communica tions director Tetra Pak SA.

INDUSTRY NEWS

35SUPERMARKET & RETAILER, OCTOBER 2016

Pasta category shows healthy growth

The pasta category sawgrowth in volume and

value from 2014to 2015, and it is believed that thepasta category

gathered through momentum population

growth, an increase in urbanisation, the realisation of the convenience benefit offered, the availability of different variants, and relatively economical price of pasta compared to other staple food types.

According to BMi Research, a full service-research house, the

average industry selling prices for dry pasta and pasta meal kits

both saw healthy increases during 2015. This may be attributed

to the weak rand, as a large proportion of these products and raw

materials are imported. The category price increases were higher

than CPI rate of 4,6% recorded for 2015.

Dry pasta dominated the pasta market, accounting for over

three quarters of the total volume sold in 2015. This product has

an extended shelf life and can be transported easily, thus making it

an attractive merchandising option. It is also available in larger pack

sizes that are cheaper in rand-per-kilogram terms. The product was

packed mainly in flexible plastic, in 500g packs.

Pasta meal kits showed a positive volume growth from 2014

to 2015. The category is dominated by instant noodles that are

easy to prepare and available in variety of flavours. The substantial

increase in product volumes were attributed to the convenience

and affordability of a single pack, thus making it an attractive

meal or snack prospect. There has recently been a large number

of entrants to the noodle market and house brands have also

increased their volumes significantly, due to high demand for the

product. Traditional pasta meal kits have lost volume and share to

instant noodles in recent years.

Overall pasta volumes were distributed predominantly to the

retail sector in 2015. This channel is known for the wide range of

product and flavour options available, as well as the incidence of

discounted pricing. There has been a notable increase in number

of house brands launched in the past three years in this channel.

The wholesale sector was the second largest consumer of pasta in

volume terms.

The three metropolitan regions (Gauteng, KwaZulu-Natal and the

Western Cape) accounted for more than two thirds of the volume

sold in 2015. The increase in the number of people moving from

rural to urban areas was one of the major factors hypothesised for

the increase in volume sold within these regions.

The pasta category is expected to continue to grow in the short

to medium term as the population in urban areas expands and

the middle market has greater exposure to pasta products. In

addition, particularly for pasta meal kits, the category is expected

to be driven increasingly by the convenience benefit as consumers

seek out simple meal solutions. The future category growth rate is

expected to be somewhat lower than the rates achieved in 2015,

but still healthy nonetheless.

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OBC wins SAPCC award The excellence of the oBC franchise model and its

business leadership was recognised for the second year

running by the South African Portuguese Chamber of

Commerce (SAPCC).

The OBC Group was nominated in two categories at the SACC

Standard Bank Business Excellence Awards 2016 that took place

recently at the World Trade Centre in Sandton, taking honours in

the most prestigious category – Large Business.

In the Entrepreneur of the Year category, OBC Group’s managing

director, Tony da Fonseca, was one of the top three.

“We are delighted to have won this accolade again this year.

I wish to thank the SACC for providing a credible and reputable

platform that promotes business excellence in South Africa,”

Da Fonseca said.

The Large Business Award celebrates the top performing

companies that are owned or managed by Portuguese.

Rui Marto, a director of SAPCC and one of the five judges, says

the panel received high quality entries in all categories and the

most competitive was the Large Business category.

“The judges’ panel was very impressed with quality of entries.

OBC Group submitted a high-quality entry and is an example of

a great South African-Portuguese success story,” he says.

Despite a challenging trading environment in the last 12 months,

OBC has doubled the size of its corporate footprint within the

network and grew sales by close to 30% on average across all

stores.

Durban-born Phendula Tips turns 21Phendula Tips, the founding brand of local Durban tea

business Joekels Tea Packers, turns 21 this year.

Joekels Tea Packers was formed by Joe Swart and Jonathan Kelsey

in 1994. Although very different, they both believed that there

was a gap in the market for an affordable quality tea – and so the

Phendula brand (which means to turn around or change in Zulu)

was born.

The planning began in earnest in Joe’s garage, until the pair were

able to secure their first official work space in Pinetown, where they

started production of the first Phendula Tips tea bags.

Joekels Tea Packers is now the third largest tea manufacturer

in South Africa and produces a wide range of tea brands that

have become household names in South Africa – including Laager

Rooibos, Laager Tea4Kidz and Tetley.

Caxton and SPARK Media launches print innovationA print innovation that was recently launched by

Caxton and SPARK Media can change the way retailers

look at print advertising.

“This is the biggest news for print in a very long time,” says Olav

Westphal, sales director of SPARK Media. “The Kodak Prosper S30

Imprinting System represents the first variable print technology

INDUSTRY NEWS ▲

37SUPERMARKET & RETAILER, OCTOBER 2016

Leading trade fairs, exhibitions and events of interest to supermarkets and their suppliers

NATiONAl 20161 & 2 November The Business of Food and Wine Tourism ConferenceSTEllENBoSCH The inaugural Business of Wine and Food Tourism aims to promote

co-operation between the private and public sectors in the area of food and wine tourism.

1 November World Retail Congress AfricaCAPE ToWN The World Retail Congress Africa presents an opportunity to

engage with and learn from those steering the Pan-African and world’s leading retail businesses.

8 November Shopper insightsJoHANNESBuRG Tough times demand very astute reading of the signals and

sixteen presenters translate research data into insights leading to enhanced offerings and communications.

8 November South African Energy Efficiency Convention (SAEEC)JoHANNESBuRG The 2016SAEEC is an important energy event for end-users and

energy professionals in all areas of the energy field.

iNTERNATiONAl 20166 November Pharma EXPOCHICAGo Pharma EXPo offers pharmaceutical, biopharmaceutical,

medical device, personal-care and nutraceutical manufacturers the opportunity to explore the latest advances from nearly 300 suppliers of solutions.

6 November Pack ExpoCHICAGo PACK EXPo focuses on processing and packaging solutions while at

the same time introducing technologies and ideas from all different industries.

8 November K-OSH: Safety ExhibitionNAIRoBI K-oSH focusses on the occupational safety and health market in

East Africa.

10–12 November Hong Kong international Wine & Spirits FairHoNG KoNG The wine fair encompasses not just wine, but also a wide array of

spirits including distilled liquor, sake and beer.

14 November All4PACKPARIS All4PACK Paris offers a range of content, addressing packaging,

health, safety and transparency issues, eco-design and zero waste, and e-commerce.

16 November Mapic – The international Retail Property MarketCANNES Mapic is the key meeting point for retailers looking for partners,

and property developers and owners looking for retailers to enhance their sites.

21 November World Bulk Wine ExhibitionAMSTERDAM The World Bulk Wine Exhibition (WBWE) is a meeting place for both

buyers and sellers of bulk wine.

22 November Food Matters live loNDoN Food Matters live brings together professionals from across the

food and drink industry.

23 November Algeria FoodExpoAlGERIA FoodExpo offers an opportunity for companies to show their

products, services and technologies.

25 November Tanzania Trade ShowDAR-ES-SAlAAM Tanzania Trade Show is an international event for all trades.

29 November Bioplastics ConferenceBERlIN Bioplastics Conference is the place to position your bioplastics

business, get up to speed on the latest market developments, regulatory changes and material and product innovations, and network with like-minded peers.

DIARY

For more information on these and other events, go to www.supermarket.co.za (Trade Fairs & Events) or contact us on (011) 728-7006

on African newspapers. It’s a game changer for retailers and all advertisers.”

“Newspapers have always been a mass media channel and due to the technology involved a single run will produce exactly the same content. This technology allows all printed Caxton products to create real interactive advertising in print form that is hyper targeted and hyper localised. Because the basis of the technology is digital, information (the advertised deals or promotions) can by updated in real time. Retailers will effectively be able to create direct one-to-one connections between advertisements and consumers but in a print format.”

The innovation effectively closes the loop from print to digital allowing a consumer to access a special deal, discount or service through a special unique numbered code or barcode that is printed in a specific Caxton newspaper. That will then take the consumer to the advertiser’s website where the deal can be activated and further details obtained from the consumer.

“The imprinting system will be seamlessly added directly on to our current printing presses eliminating the need to disrupt the printing process,” says Westphal.

Through the unique advert on every newspaper, additional opportunities include gaming and contests, interactive adverts, variable promotion by location and unique daily access codes to specialised online content. Each display advert is assigned a unique code which opens the doors to a variety of creative campaigns, in-store promotions, discounts, website visits and lucky draws. An example is a reader logging onto an online site and entering their distinctive code, completing an information form and automatically receiving a discount coupon or being automatically entered into a bigger competition.

“Blue-sky thinking, images, maps, QR codes and serial numbers, the sky’s the limit now,” he concludes. “We are excited to be the first in Africa to offer this innovation, in black and white for now, to our advertisers and to be at the forefront of print’s next move. Exciting times ahead, we look forward to fantastic feedback from our advertisers.”

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