CRACKING thE C-StORE SUPPLY ChAIN and effective supply chain management is often ......

ConneCting wholesalers and the indePendent tradeConneCting wholesalers and the indePendent trade

2012 Issue 1R34.00 (incl. VAT)

n FORECOURTS n URBAN & RURAL GROCERS n CONVENIENCE

Kick-start your kiosk

Wholesale storewatch:

Elangeni Cash & Carry: A wholesaler for everyone

CRACKINGthE

C-StORESUPPLY ChAIN

wholesalebusiness Issue 1, 2012 1

ConneCting wholesalers and the indePendent trade

4 Product watchThe latest new products, new variants and packaging changes

8 Marketing and promotionsMarketing and promotional campaigns

14 Social responsibilityA round up of who’s doing what to benefit the community

22 Smooth operatorThe Caltex recipe to successBy Michel Mack

28 Tech savvyCustomer interaction via Facebook and TwitterBy Michel Mack

30 NewsA collection of news items of interest to the retail trade

32 CalendarA calendar of upcoming events

2012 Issue 1

MERCHANDISE HANDLING

9 Cracking the C-store supply chainBuild relationships with stakeholders to cut supply chain costsBy Janice Hunt

15 Wholesale storewatchElangeni Cash & Carry: A wholesaler for everyone. The local hub for spaza shop owners and the entire Daveyton communityBy Michel Mack

18 Kiosks feature Kick-start your kiosk. Offer the right range to build a destination in your storeBy Laura Durham

25 Forecourt storewatch Excellence in every detail. Brackendowns Freshstop – from neglected filling station to ‘talk of the town’ with its own Twitter accountBy Michel Mack

FEATURES

COVER FEATURE

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comment from the chaircomment from the chair

Incorporating

C-Store

2 wholesalebusiness Issue 61 2012

A year for changeEvery year, we make resolutions that will inevitably

crumble as the economy, work and life take its toll.

Choosing a more broad theme for the upcoming year is a much

more useful – and ultimately, successful – way of doing it. “A

year for change” is my suggestion for 2012. And our first issue of

Wholesale Business should give you reason to start acting.

Take our cover story, ‘Cracking the C-store supply chain’, for

example. Efficient and effective supply chain management is often

a bafflingly challenging aspect of running a convenience store

(C-store). It provokes more sad head shaking and vitriolic finger

pointing than just about any other aspect – and yet, as more than

one industry boffin was quick to point out, it should be very simple.

Read our Merchandise Handling feature to see the flaws, failings

and possibilities for the future.

Changing for the better is what both our Wholesale and

Forecourt Storewatches are all about. A dynamic management

team at Brackendowns Freshstop has managed to convert the run-

down filling station into a destination in Alberton and more than

tripled their turnover within only a few months.

Having grown from a little concession store supplying maize

meal, Elangeni Cash & Carry has become a massive hybrid store

and a hub – not just for spaza shop owners – but for everyone in

Daveyton, Gauteng. The key to success has been building personal

relationships with customers and always keeping up with their

changing demands of a store experience.

The Kiosk is one aspect of the store that is not keeping up

with customers’ changing demands. In our feature on the subject,

we see why retailers need to take the time to focus on this profit

centre and rationalise ranges, improve marketing and promotions

and get customers spending more. The feature also looks at what

contraband cigarettes really mean for our economy.

This issue ends on a look ahead to the future. Tech Savvy

examines customer interaction via Facebook and Twitter and we get

an expert to tell you how to get maximum exposure with minimum

investment.

With all these examples of positive change and ideas on how you

can improve your business this year, I hope you’re also feeling that

change is in the air!

Cheers,

Laura

Laura Durham

C

M

Y

CM

MY

CY

CMY

K

20631_Aldor_PinPop_BlueBerry_ad_R.pdf 1 23/01/2012 13:50

range consists of five variants: Chocolate,

Strawberry, Cream Soda, Ginger Beer and

Cola – with a different cow character

decorating each pack. The flavoured milk is

ideal as a snack or to pack in a lunch box. It

is available in 250ml cartons (R4.99-R5.99)

and 6-packs (R30-R36) and due to high

temperature sterilisation, these flavoured

milks have a long shelf life. The launch is

being supported by a Facebook campaign

and a TV commercial.

InTroDuCIng THE bIggEr rED buLL

Red Bull Holdings SA has

introduced a new pack size and

super sleek can for its Red Bull

Energy Drink. The bigger 473ml

is aimed at consumers who are

looking for extra mental and

physical vitality in one go. The

new can retails for between

R24.99-R26.99 and is packed

12 per case, with 108 cases per

pallet. The launch is

being supported through all Red Bull local

and international marketing assets: Events,

TV, radio, online, motorsports, extreme

sports and in-store activations.

SuMMEr SPArKLE

Ceres Sparkling’s new 275ml

slim can and 750ml glass

bottle packaging formats

have made the popular

carbonated fruit juice

functional for a broader

4 wholesalebusiness Issue 1, 2012

to stay ahead, traders need to know what’s new, what’s available and what their customers will be looking for. Product watch aims to keep you informed about new products on the market, new variants and packaging changes. For more information on suppliers, please phone us on (011) 728-7006.

product watch

nEW TroPICAL FLAvourED MAgEu

Foodcorp has launched

a new limited edition

Mageu Number 1

Smooth Tropical Fruits

flavour in November.

This traditional non-

dairy, non-alcoholic

energy-giving beverage

now has a summer

flavour added to the

range. The 330ml drink

retails for approximately R4.99. The national

launch is being supported by adverts in the

Daily Sun newspaper and Move magazine,

on-pack promotions, in-store wobblers and

posters.

Fun FruIT juICE For KIDS

Ceres Fruit

Juices has relaunched

Jabba, the fruit juice range

for kids, with a new racing car look. The

nutritious juice is packed in Tetra Classic

Aseptic 150ml packs, boasting a shelf life

of one year at room temperature. There are

four variants in the range: Zippy Orange, Go

Go Pineapple, Racy Raspberry and Sporty

Apple. New and innovative point-of-sale

(POS) materials will talk to parents and

young consumers about Jabba’s modern

look and product benefits.

Fun FLAvourED MILK rAngE

First Choice Flavoured Milk from Woodlands

Dairy is convenient, tasty, fun and full of all

the wholesome goodness of milk. The new

scope of customer. The sparkling drink is available in three variants – Apple, White and Red Grape – and contains no added sugar, no preservatives and has a 12-month shelf life. The September launch for the 750ml (RSP – R17.99) and November launch for the 275ml (RSP – R6.99) is being supported by tastings in-store.

FAIrTrADE CHoCoLATE In SA

Fairtrade-certified Cadbury Dairy Milk was launched to coincide with national Fairtrade Week, which ran from 14-18 November. Chocolate lovers will be able to enjoy the same taste and the same price as the rest of the range, but now safe in the knowledge that the cocoa used in its production

was sourced in an ethical and sustainable manner. The pack (20g, 35g, 100g, 145g, and 200g) has also changed slightly as it will now feature the prestigious Fairtrade logo.

CrunCHIE – bIggEr THAn EvEr

The Cadbury Crunchie from Kraft Foods SA is now 21% (7g) bigger than before. It offers chocolate lovers even more honeycomb smothered in Cadbury Milk Chocolate. The 40g chocolate bars retail for R5.99 and are packed 48 per shipper.

FruIT SWEETS For Fun SnACKS

Candytron has launched Gelo, a range of pectin jellies with fruit flavours and Vitamin C, to the Western Cape in November. Made with fruit juice flavours and natural colours,

each 130g pack is

the perfect treat

for young people.

The range includes

three variants:

Blackberry,

Strawberry and

Assorted Fruit and

retails between R14

and R35.

WHoLEgrAIn CErEAL FroM néSTLE

Néstle launched

Fibre 1 as a tasty

high fibre cereal

aimed at all

breakfast eating

consumers.

The crunchy

wholewheat

flakes are

available in two

variants, Original and

Honey & Almond. The Original is available

in 450g and 670g pack sizes, and Honey

& Almond comes in 450g and 690g packs.

The launch is being supported by a TV

commercial and in-store wet sampling.

rHoDES ExPAnDS bEAn rAngE

Rhodes Food Group

has launched Butter

Beans in Curry Sauce.

Developed to satisfy

consumer demand,

the new product is

available in a regular

410g can and carries

the ‘Choice Grade’,

Kosher and Halaal marks. The R9.99 can

also features the Easy-Open lid. The Rhodes

range also includes Butter Beans in Brine.

MorE TEA In A bAg

Tetley Big Tea’s tea bags now contain

10% more tea than other South African tea

brands. A change to the package design

and new slogon – More Tea, More Taste

– highlights

this. Tetley’s

bigger bag

not only

provides

added value

at a time

when many

brands are actually making products

smaller but is also a perfect fit with a local

preference for a stronger, fuller cup of tea.

Tetley Big Tea bags are available in packs

of 102 (RSP – R17.99-R19.99) and 26 (RSP

– R5.70-R5.99).

nEW bAKIng AIDS LAunCHED

Stafford Bros & Drager has

added two baking aids to its

condiment range, both of

which impart their genuine

flavour to home-baked

products and confectionery.

Both variants – Bourbon

Vanilla Extract with Seeds

(R36) and Coffee Extract

(R34)– are ideal for baking

and for any recipe in which

a real vanilla or coffee flavour is a vital part.

The launch is supported by an extensive PR

campaign and tactical in-store support.

vErSATILE FooDSErvICE bAKIng ProDuCTS

Pillsbury

TubeSets

from

General

Mills SA

have been

formulated

to allow

the operator to bake a versatile range of

products from muffins, flans, Whoopie Pies,

loaves, biscuits and many more. TubeSets

are packaged in an easy-to-use piping bag

and contain all the necessary raising agents

so nothing has to be added to the base

ingredients. The product has a six-month

shelf life frozen and 48 hours once thawed.

With traditional usage, each Tubeset will


make about 20 X 65g cupcakes or muffins. The range includes 11 variants: Blueberry, Cappuccino Choc Chunk, Chocolate Choc Chip, Caramel Fudge, Lemon Poppy Seed, and Plain Crème.

vAWTEr ExPAnDS rAngE

Distell has added two new variants to its Vawter RTD (Ready to Drink)

range in October. Vawter is made from sparkling natural spring water and premium vodka (5%

alcohol content). The original Vawter, with its added splash of lime, will now be known as Vawter Zest. The two additions

are: Vawter Vortex Energy, which contains no caffeine but still has the added benefits of

ginseng and guarana; and Vawter Frost, with an added dash of fruit. The launch of the new range (6-pack RSP – R49.95) is being supported by radio advertising campaign, below the line promotions in trade, PR and online advertising.

rTD WInE SPrITzEr For gAuTEng

KWV has launched jimmijagga, a new RTD fusion wine spritzer into Gauteng outlets in November. The new drink is a

light, easy-drinking fusion wine spritzer with a subtle hint of lemon, melon and plum flavours and is available in White, Rose and Red for R25 per 265ml bottle. The launch is being supported by in-store activations, experiential teams and a branded vehicle. The Durban and Cape Town launch is expected in early 2012.

SEnSITIvE bAby WIPES

Nkunzi Unsgaard has introduced Cherubs Sensitive Wipes Triple Pack & Free Nappy

Sacks 20’s in October. The wipes are

fragrance, paraben and alcohol free,

making the wipes perfect for

newborns. The premium quality

spunlace fabric wipes are also infused

with skin-loving Vitamin E and Aloe Vera.

The R69.99 pack comes with the added

value of 20 free fragranced nappy

sacks and comes in a carrier bag with

handles for convenience and portability.

brIgHT PACKAgIng For FEMInInE HygIEnE ProDuCTS

Kimberly-Clark

has introduced

new packaging to

the Kotex range in

November. It is bold

with a black

background and bright colours, including pink and purple, as well

as eye-catching designs and prints. The Kotex range includes five

variants: Ultrathins, Ultrathins with Wings, Maxi, Young, and Young

with wings.

MAnAgE CASH SAFELy In AnD ouT oF STorE

The Sumetzberger system, distributed and

implemented by Global Payment Technologies (GPT),

is a sophisticated computer driven engine, which can

be programmed to deliver to or from a specific point.

In retail centres, cash can be transported

straight from tills to cash centres,

enabling cashiers to keep tills almost

empty and request cash within

minutes. Cash is managed through

a closed loop recycling solution so the

cash stays in the shopping centre and

is recycled between groups of stores. Another advantage is huge

cost savings, especially on cash-in-transit costs and insurance costs,

while dramatically improving client service.


Our Mobi New Products site is dedicated to the latest in product and packaging innovation and sends a notification right to the palm of your hand

as the launch happens.

Go to m.supermarket.co.za to see the products featured. A free subscription

offers you the full functionality of the mobi site.

NEW

Why list Ceres Fruit Squash?• Consumers are looking for brands that provide great value for money and welcome the fact that Ceres is now available in

a squash offering, making the brand accessible to those previously unable to afford it.

• Consumers want innovation from a trusted brand and believe the added vitamins in Ceres Fruit Squash will enhance their

every day drinking requirements.

• The segment is growing in volume as well as in value. (AC Nielsen April 2010)

• A trusted brand such as Ceres available at an affordable price will:

1. bring new consumers into the category and drive volume growth

2. entice new consumers to trade up, thereby increasing category and segment growth.

• Ceres Fruit Squash is unique and will differentiate itself by means of vitamin enrichment.

Why these flavours?• The top 8 flavours within the squash category deliver 94% of the volume. (Synovate May 2010)

• Ceres Fruit Squash will launch with 4 of the 8 top flavours.

Trade enquiry detailsWestern Cape

Tel: (021) 943 6900

Eastern Cape

Tel: (041) 401 6000

KwaZulu-Natal

Tel: (031) 584 6062

Gauteng (including Limpopo, Mpumalanga, and North West)

Tel: (011) 622 0001

Free State

Tel: (051) 435 0201

How will we support this launch?• Necktag communication

• Generic POS

• Broadsheets

• 3rd party POS

• Bulk displays

• Wet demos

CERES SQUASH A4 Trade AD.indd 1 2010/10/22 12:01 PM


roASTIng SuCCESS

Chef Daniel Nxumalo and MC, Motlatsi Mafatshe at the Guinness Braaimaster competition.

As part of the launch of Guinness Original’s less bitter brew, the

company traveled across Gauteng, Limpopo, North West and

KwaZulu-Natal, visiting various shisa nyamas in search for South

Africa’s ‘Favourite Braaimaster’, The two best braaiers from each

province had the chance to compete for the winning title at an

exclusive venue in Soweto for the Guinness Original Braaimaster

Competition 2011.

The judge panel was headed up by celebrity chef, Citrum Khumalo

and Daniel Nxumalo from SA’s Chef Association, while MC, Motlatsi

Mafatshe and DJ Soul T kept the crowds entertained in the rain.

Jan Masaka Noko from Abogolova Chicken and Car Wash in

Mahwelereng in Limpopo captured the title of SA’s Favourite

Braaimaster. The ecstatic winner intends to use the R10 000 price

to upgrade his premises and give his customers an even better shisa

nyama experience. He also wants to train his employees so that

they can take part in the competition as well. In second place was

Maloti Sebedi from Maloti Foods in Alexandra, Gauteng and Patrick

Nahlalela from Ntombi’s Braai Corner in Soweto was placed third.

Guinness marketing manager, Melanie Woest commented: “Most

would agree that braaied or roasted meat tastes better than boiled

meat and in the same way, roasted barley tastes better than boiled

barley. While most beers boil their barley, Guinness Original made

one change and roasted its barley for a crisp, bold taste.”

EngEn ConnECTS EMoTIonALLy

Engen’s new retail TV commercial, produced by Draftfcb Cape Town,

is being aired across a variety of channels in South Africa. Engen

intends to build an emotional connection with their customers,

and doesn’t just want to be seen as a petrol station, but as a “retail

destination that offers just about anything” says Nadja Srdic,

marketing manager at Draftcb Cape Town.

Engen partners with premium brands such as Woolworths, Corner

bakery, Equatorial Coffee, Wimpy and Steers. The commercial was

derived from the company’s marketing strategy “every experience

matters”. Engen marketing manager, Pieter Roodt emphasises that

”these partnerships have transformed Engen service stations into

shopping destinations where motorists can get almost everything

they need en-route”.

Aaron Harris, creative director at Draftfcb Cape Town added:

“The diversity of Engen’s retail offering makes life more convenient.

In one stop you can get great coffee, a Steers or Wimpy burger, a

Woolworths salad or even fresh flowers for your wife. Whatever you

need, you can just drive in, fill up with shopping and drive off again.”

FrESH brEATH To PAy THE bILL

After the recent overtly successful

launch campaign for Clorets Cherry

Menthol chewing gum, which

reached over a million customers

and achieved a 73% brand recall

rate, Clorets launched another

unusual campaign over the festive

season. In collaboration with Primi

Piatti and developed by Ogilvy

Cape Town, Clorets used the

restaurants’ bill folders for their

new campaign. The bill folders

contained one of three humorous,

supposedly hand-written thank you letters from the waiters

referring to the Cherry Menthols included in the folder.

“The humorous creative execution is sure to spark some laughter

with consumers. It fits brilliantly with the Billads ambient media

platform,” says Craig Segal, MD of Nine Mile Media. “This campaign

is set to get people talking, laughing and remembering the fresh

Clorets Cherry Menthol flavour!”

SuPA gogo gIvES AWAy r10 000 In PrIzES

Huggies Dry Comfort entrusted

the help of popular South African

celebrity, Winnie Modise, along with

their own Supa Gogo to educate

mothers about immunisation.

Immunisation strengthens a

child’s immune system to help

fight off germs that may cause diseases. Recently, Huggies Dry

Comfort and Winnie Modise visited Protea Glen Mall as a platform

for mothers to get information and ask any question they have

on immunisations. All moms needed to do was buy any pack of

Huggies nappies or wipes to be entered into the competition.

Nditsheni Mutwanamba of Chiawelo in Soweto was the lucky

mom who walked away with the grand prize of R10 000 for her

baby’s education.

marketing & promotionsmarketing & promotions

Clorets have their own way to an increased brand recall rate.

High cost supply chainAfter all, the single aim of all participants in

the supply chain is to ensure that product is

sold. As Michael H. Hugos says in his book,

The Essentials of Supply Chain Management,

“The goal of supply chain management is to

increase sales of goods and services to the

final, end use customer while at the same

time reducing both inventory and operating

expenses.”

But the process of getting stock from the

manufacturer to the convenience store has

been for decades, and remains, plagued by

high costs and fraught with issues.

By Janice Hunt

Efficient and effective supply chain

management is often a bafflingly

challenging aspect of running a

convenience store (C-store). It

provokes more sad head shaking

and vitriolic finger pointing than

just about any other aspect – and

yet, as more than one industry

boffin was quick to point out, it

should be very simple.

Pockets of progressPockets of progress are being made,

notes Jean Mundhoss, Sasol’s national

convenience manager, rather cautiously. But

there are still many obstacles to overcome,

which need to involve compromise,

collaboration, and relationship building with

every ‘link’ in the chain, before the supply

chain to convenience stores can be deemed

successful.

Ray Maingard, regional operations

manager with Caltex Freshstop, puts it

like this. “It’s all about all stakeholders

optimising sales – whether it is the

franchisor, retailer, wholesaler, or supplier.

The objective remains the same.” He says

it is possible to achieve big sales in a small

store format. It takes careful planning,

attention to detail, and management.

The store’s stock room must be carefully

stocked and managed to ensure those off-

putting out-of-stock gaps on shelves just

don’t happen. It’s not easy though.

He says the challenges that suppliers face

are the small quantities to be delivered.

“A six-ton truck costs R860 000 to buy.

It’s expensive to run. Delivery of small

quantities to many different outlets is

clearly not cost-effective.”

But the fact is that the convenience store

sector is worth in the region of R12 billion

per year and manufacturers and suppliers

just cannot afford to ignore it.

Supplier grudgesEver outspoken C-store consultant, Jocelyn

Daly is quick to lambaste suppliers for

their lackadaisical treatment of the C-store

sector and for seeing these stores as ‘grudge

drop-offs’. It’s an attitude that is hurting

potential growth for retailers and suppliers,

she states, and the ultimate loser is the

customer.

She says she firmly believes there should

be penalties in place against suppliers

for each time they either short deliver

(frequent occurrence) or deliver incorrect

product against an order – (which she says

is virtually 100% of the time for most

suppliers). “Newspapers and magazine

distributors are particularly bad – and if

you can’t find your favourite magazine in a

forecourt store, it’s not the fault of the


Merchandise handlingMerchandise handling

CRACKINGTHE

C-STORE

SUPPLY CHAIN

Build relationships with stakeholders to cut supply chain costs

retailer. They are lumped with what is left in

the truck, regardless of what they need to

keep their customers coming back into their

stores.”

The elements contributing to this

unhappy status quo include franchisor head

offices that are “far too concerned with

rebates based on ‘fictitious’ volumes – with

little or no innovation or performance

criteria in place.” Imagine how much more

the franchisors could earn for each short

or incorrect delivery, points out Daly, but

better still, imagine the growth if they both

got this part right? “Another factor is that

C-stores have a major problem enforcing

correct deliveries. They sit with empty

shelves and need them filled, regardless of

whether they receive their correct order or

the right quantities.

“And the supplier wins regardless. They

just drop off all excess stock at these small

drops. Our customers lose out each and

every time,” she adds.

Collaboration is keyMaingard agrees that collaboration is

key to the improvement of supply chain

efficiencies in the convenience store sector.

He notes that this is borne out by the fact

that some suppliers are getting it right – by

keeping the lines of communication wide

open between themselves and the small



Various players in the C-store sector have mentioned Simba’s lack of collaboration in its approach to sales through C-stores. This has resulted in its facings dropping from 80% to about 40%.

retailers, understanding their challenges,

and openly discussing their issues. One

such company is Coca-Cola, which he

says is an example of how to manage the

supply chain to small stores. They arrive on

a given day, they take an order and place it

electronically, and stock arrives on a given

day.

Getting it very wrong, says Maingard,

is Simba. “There is no collaboration with

C-stores. They simply fill their trucks with

product of their own choosing and they go

out on the road with reps who then decide

what to put into the stores. By the time

they reach the small C-stores at 4pm or

so, they simply unload stock, regardless of

whether it’s what the store needs or not.

It’s a classic case of how not to do it,” he

says vehemently. “They are ignoring this

channel at their peril. They are not the only

brand and as it is, in the past they had 80%

of facings in forecourt stores. Now they are

probably down to about 40%.” Interestingly,

Maingard was not the only person in the

C-store sector who mentioned Simba’s lack

of collaboration in its approach to sales

through C-stores.

LimitationsMaingard is convinced that if suppliers and

convenience stores make a concerted effort

to truly understand the limitations faced

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by each other and their respective business models, the industry would be a step closer to overcoming some of the inefficiencies and challenges that seem to be accepted as the norm, rather than dealt with.

Limitations in convenience stores include limited storage space, safety of stock, expensive real estate, the need for owners to be hands-on in the stores to ensure smooth running of the store, loss of trained staff, and many other issues. Among suppliers’ limitations include issues such as the cost of breaking bulk and delivering small quantities, administrative costs, running promotions with different companies at different times, the cost of accessing outlying areas, and many more.

No one has the monopoly on battling with challenges, but it is certainly evident that suppliers hold the most power when it comes to facing and overcoming the challenges.

While Maingard is convinced that the biggest difference to supply chain efficiencies in the convenience store sector must necessarily be made by suppliers, he does concede that there are steps that small stores could make to make it more palatable for manufacturers to deal with them – such as possibly adjusting their stock to see better depth of range rather than width of range in some instances. Of course, there are some products that require depth and width – such as cigarettes – and that there are other products where customers are brand loyal, such as dairy.

He states that the only way that

improvements will be seen in this supply

chain is through improved relationships

among the stakeholders. This is a rallying

call that comes up again and again in

discussions about this topic.

Costs – and the need to contain them

collaboratively – remain the biggest

challenge in managing the supply chain of

stock to C-stores. Estimates are that the

cost factor for distribution to franchisees

could be as high as 18-20% per case. It’s

extremely inefficient. And regardless of any

which poses challenges from time to time,

says Mundhoss. Sasol has about 200 key

suppliers – from regional to national – on its

system, and about 3 000 active line items.

Most forecourt product sales fall into

the five Cs – cold drinks, chips, chocolate,

cigarettes, and cellphone airtime. These

are the product sectors that cause the

most headaches in the supply chain to

convenience stores. “Groceries are not a

problem. They represent about 3-5% of

total sales and can be bought at local cash

and carry outlets, if necessary,” he says.

franchisee or buying group agreement that

a C-store might have, it is not compelled to

buy from a specified source or supplier. This

means that buying groups cannot provide

guarantees to suppliers or distributors what

stock will be ordered by the franchisees or

members, making it difficult for suppliers

and distributors to achieve critical mass

with orders.

Sasol faces challengesSasol has 250 forecourt stores nationally,

220 of which are Sasol Delight outlets.

Distribution to these stores is primarily

through drop shipment as Sasol doesn’t

have distribution facilities. This leaves them

dependent on a third party distribution,


Smooth delivery of groceries is not a major headache for C-store operators as they represent about 3-5% of total sales and can be bought at local cash & carry outlets if necessary.

Sasol must rely on third party distribution to its 250 forecourt stores nationally as it doesn’t have its own distribution facilities. This poses challenges from time to time.

Among his recommendations, he

suggests partnering with service providers

and customers to identify opportunities

to implement win-win solutions to save.

“The real win-win efficiency improvement

opportunities need not be the expensive

and capital intensive opportunities, but

those in which time can be optimised.

Remove wasted time, and everyone wins,”

he adds.

Sasol’s wishlistSasol has a wishlist of initiatives that it

believes would improve the process for

all players in the supply chain. The first

is simple – a pre-ordering system for its

franchisees with all suppliers.

Another initiative that they believe could

alleviate the pressures of the challenges

facing all stakeholders is an integrated

system featuring a hub that would see

more industry-wide co-operation in the

interests of containing costs. The idea would

be ‘a one stop shop’ to enable convenience

stores to order once, buy once, pay once,

and receive once. This would improve

their efficiencies dramatically; reducing

cash purchases, cutting down back office

administration, and enable them to benefit

from economies of scale.

South African retailers are facing higher

and higher fuel costs, toll fees, and new

competition in the shape of Walmart which

has optimised its distribution systems

to exceptional standards. The integrated

system would, of course, necessarily have



Take Coca-Cola as a good example of how to manage the supply chain to small stores: they arrive on a given day, they take an order and place it electronically, and stock arrives on a given day.

Economies of scaleMohamed Carrim, GM of retail at Sasol, says there are some distribution companies that are getting it right in delivering stock from manufacturers to convenience stores. They are working together with stakeholders and achieving economies of scale. But it has not been plain sailing at any stage of the process. “These big distribution companies tend to be contracted to manufacturers to distribute stock to retailers throughout the country, or on a regional basis. Some have been buying up smaller regional wholesalers to improve their national footprint. But still, it’s a costly business delivering small quantities to small stores in outlying areas and in fact, these companies have to constantly re-assess their systems and strategies to ensure they remain profitable.”

Transport pressuresIn the 2011 Consumer Goods Council conference, Terrence Brown, senior manager with Accenture Management Consulting, addressed the issue of transport as a key operative in the supply chain. He pointed out that, in general, South African companies hold too much inventory, and that supply and demand are out of kilter. This sees too much product on the road and South Africa allowing itself to be hugely dependent on fuel, which is a major risk. “South African companies are under huge cost reduction pressures – and logistics and transport account for a high percentage of these costs.”

to be managed by the manufacturers. “If

the different stakeholders work together,

it could work,” says Carrim, acknowledging

that it would not be without its

complications, such as monitoring buying

when one group has a promotion and the

others don’t. But the sophistication of

information technology today could bypass

those and other issues with some ease.

Sasol’s Carrim and Mundhoss both

anticipate that the future of supply chain

management will see migration to bigger

groups – creating more opportunity for

cost-effective distribution of stock. But a

lot of ground will have to be covered before

that takes effect.

They maintain that suppliers should

reposition and invest in systems that will

improve the efficiencies of the distribution

of their product to convenience store

shelves and are also often reluctant to

reward franchises when they make a

significant investment in systems.

Investing in relationshipsHaving said that, it’s not fair to generalise

too much and Mundhoss points out

that their biggest role as a franchisor is

to facilitate the relationships between

suppliers and retailers – relationships that

can determine the success or failure of a

store. She says Sasol works hard to build

strong relationships with suppliers, from

which their franchisees will then benefit

with competitive pricing, good promotions,

and efficient delivery. Part of the

strength of their

organisation,

they say, is the

transparency

of their

relationships

with their

franchisees and

suppliers. They

work together

in an effort to

find more cost-

effective solutions

for the supply chain

process.

But the responsibility for the success of

these relationships rests with the retailers,

as well as with the supplier and the

franchisor. The store owners are encouraged

to make use of the advantages that these

nurtured relationships have gleaned

for them, placing their orders with the

suppliers on the preferred suppliers’ list, and

managing and monitoring stock levels as far

as possible.

Last wordDaly, however, has the last word. “To

the suppliers to this industry and to the

franchisors – work on putting performance

criteria in place. That will keep your

customers coming back again and again to

the C-stores because they will know that

what they are looking for will be there.” It’s

that simple!


Too many suppliers simply fill their trucks with product of their own choosing and go out on the road with reps who then decide what to put into the stores. This can often result in out-of-stocks in-store.

The biggest role of a franchisor is to facilitate the relationships between suppliers and retailers – relationships that can determine the success or failure of a store.

South African companies generally hold too much inventory, with supply and demand out of kilter. This sees too much product on the road and South Africa allowing itself to be hugely dependent on fuel, which is a major risk.

Digital media services

supermarket.co.zaA full featured website that offers valuable resources to retailers:

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3 600 retail decision makers on their PCs and mobile phones – and it is optimised for both platforms. The Alerts are also displayed on our website home page that receives 4 900 visits a month.

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Buyers Guide

Get this service online atsupermarket.co.za


proper paraffin-handling SaVeS liVeS

Engen teaches kids how to safely handle paraffin in a fun way.

Engen Petroleum celebrates the three-year anniversary of their

Klevakids Paraffin Safety Campaign, aiming to teach school kids the

safe handling of paraffin in their homes so that related accidents

and injuries can be avoided. Today the campaign reaches over

78 000 learners in 190 schools within seven provinces across the

country and neighbouring Lesotho.

Paraffin is mostly used for cooking and the majority of accidents,

besides ignition, occur around the stove. Research conducted by

Freshly Ground Insights (FGI) two years into the campaign, querying

9-12 year olds from households where paraffin is used, revealed that

97% of children interviewed use paraffin without adult supervision,

and only 15% of the children said that paraffin containers in their

homes are clearly marked.

Besides teaching safe handling, emphasis is put on storing the

containers in higher places so that the risk of younger siblings

confusing them with water can be minimised. Nonetheless, storage

remains a major focus as current research into the campaign still

indicates a lack of knowledge there, while the general danger

awareness steadily increases.

Khanyisa Balfour, Engen corporate social investment (CSI)

manager, concludes that the success of the campaign is measured

by how many kids report that they have been taught about the safe

handling of parrafin and he reports that tests indicate a “dramatic

increase in that metric.”

‘graduate’ to a better life

The South African Brewery (SAB) launched the Tavern Intervention

Programme (TIP) in collaboration with Men for Development

in South Africa (Medsa) in 2010 as part of their comprehensive

strategy against alcohol abuse in South Africa. Since its launch,

1 029 men have graduated.

TIP is a unique programme, aimed at tackling the violence against

woman and children, as well as the spread of HIV/Aids as a result

from alcohol abuse. The men targeted by TIP have been identified

by law enforcement and community members as offenders of

these social crimes, and are being targeted in local taverns. Each

session addresses the responsible use of alcohol, and the men

are encouraged to share outward pressures that result in their

unacceptable behavior. After completing the programme, the men

continue to meet once a month in support groups to continually

be able to share and if necessary be referred to receive professional

help.

Greg Uys, GM of SAB Coastal Region, emphasises that SAB wants

to be part of the solution at the source, and not just address the

symptoms. They work closely with industry experts and other key

stakeholders to put measures in place to fight alcohol abuse in

South Africa. SAB believes that targeted interventions focusing on

drinking patterns associated with harm are the most effective way

to tackle alcohol abuse.

SAB’s investment in the TIP will help to initially target 4 000 men

– 800 per year across all provinces over the next five years.

Uys concludes: “Empowering men with the necessary information

to become ambassadors of change will mean a better life for their

families and entire communities and ultimately for all of South

Africa.

rehabilitation centre chriStmaS Spirit

The Peninsula Beverage Company put huge smiles on the kids’ faces

at Tehillah House in Elsies River, where they provided each kid in

the institution with a Christmas present. Tehillah House is a drug

rehabilitation centre, which also provides a safe haven for their

patients’ kids, who have often been victims of domestic violence.

The institution takes a different approach to drug rehabilitation.

Deputy CEO of Tehillah House James Louw explains: “Unlike other

institutions, we don’t separate the children from the parents. During

the day when the parents undergo treatment, they are also taught

parenting skills, and at night they are reunited with their children.

We act as a watch dog, looking after the children and making

sure that the parents take responsibility for them as part of their

rehabilitation.” The centre also provides a permanent residence

for men, women and children who have been abused, provides

healthcare for the frail and meals for 600 to 800 people daily.

Stuart McLeod, MD of Peninsula Beverage Company is delighted

to be a part of this initiative and wants to “challenge more

corporate organisations to get involved in this incredibly worthy

cause.”

social responsibility

By MicHel MacK

Having grown from a little

concession store supplying maize

meal, Elangeni Cash & Carry has

become a massive hybrid store

and a hub – not just for spaza

shop owners – but for everyone

in Daveyton, gauteng. The key to

success has been building personal

relationships with customers

and always keeping up with their

changing demands of a store

experience.

Family businessElangeni Cash & Carry in Daveyton has

been operating under the Powertrade brand

since 2002 when it joined buying group,

UMS. It was originally opened as Elangeni

Store in the 1970’s as a concession store

and embedded into a shopping centre. The

store was then purchased by co-owner, Luis

Dos Ramos’ brother in-law in 1982 and has

stayed in the family ever since. Originally, all goods were stored behind the counter and the shop was converted into a self-service store in 1992.

growing bigOwners of the roughly 1 000 spaza shops in the Daveyton area have been the main clientele since the beginning and played a major role in the store development. “The cash & carry idea started when we decided to break down bulk packs into smaller sizes to meet the needs of the spaza shop owners,” Dos Ramos explains. Over the years, the store has grown from a small outlet into a large hybrid store. From selling mainly maize meal, the demand gradually shifted, and today the store stocks all major brands.

The store now caters equally for wholesale and retail customers with a wide grocery offering, including a large fresh produce department, as well as a target market specific non-food range. In the early days, the offering included a large tool and hardware section, which has been

outsourced into a separate shop on the premises in 1998 and now operates under the Build it brand.

The development of the store has been a long process. “The major shift came when we joined UMS in 2002,” Dos Ramos explains. The store was then rebranded as Elangeni Cash & Carry and was gradually upgraded from a moderate 1 800m2 trading area to 3 800m2, with an additional 3 000m2 warehouse situated 800m down the road. For Dos Ramos it is not the most convenient set-up, but necessary in order to maximise the trading area and keep the store competitive.

Catering for everyoneThe store is sub-divided into a wholesale and a retail section but every customer is free to purchase products from either section. The product offering includes common grocery items and non-foods, such as hygiene articles and washing powder, as well as bulk butcher bags and gloves for store owners. It also features a large selection of confectionary and snacks for


wholesale storewatchwholesale storewatch

Trading area: 3 800m2

Warehouse: 3 000m2

Till points: 21

Staff complement: 110

basket size: r250

Transactions per day: 3 000Elangeni Cash & Carry has gradually developed from a concession store to a massive hybrid store, incorporating wholesale and retail equally.

A wholesaler for everyone

Elangeni Cash & Carry is the local hub for spaza shop owners and the entire Daveyton community

reselling in the spaza shops. Those two

categories are by far the most popular and

generate 15% of the store’s turnover.

While still catering for the traditional

clientele offering items like mango atchar,

the store has also incorporated cultural

products like fresh coriander in the

vegetable section to accommodate the shift

to Somali and Pakistani owners in the spaza

shop landscape. The fresh produce section

was introduced four years ago after an

independent fruit and vegetable shop in the

centre closed down – and has been a huge

success since day one. Dos Ramos decided

against incorporating a bakery or an actual

butchery as independent stores within the

shopping centre already existed.

The kiosk offers, next to the obvious

tobacco products and airtime, prepaid

electricity and a full range of medicines.

A lotto outlet is located separately in the

store. The kiosk alone generates about 30%

of the store’s turnover.

More convenienceAs a special service to the spaza shop

owners and hawkers, whose business mostly

comprises of small transactions in coins,

the store has introduced a coin exchange

system. The customers can bring their bags

full of coins which are then weighed and a

voucher of the same value is issued to the

customer to pay for his new stock. Traders

can also place orders and have their

purchases delivered directly to their store.

Hands-on managementDos Ramos currently employs 110 staff

members. New staff is hired on a provisional

three-month contract and receives a

permanent contract once they have proved

themselves. 90% of the staff come from the

Daveyton area and all training is done in-

store. After starting out as general workers,

staff members are trained for specific

positions such as cashiers, depending on

their capabilities. The staff is handled by an

outsourcing company that also provides

them with a provident fund. Year-end

bonuses are based on performance.

Owner Dos Ramos‘ motto is ‘hands-on’

as he spends most of his time in the trading

area, working alongside his employees and

interacting with customers. He says: “It gives

you a much better feel for the customers. If

they’re not happy or miss a certain product

in your range, they will ask you once, maybe

twice and then they will go down the road

to the competition.” He reviews and alters

the product offering and service level on a

constant basis in order to remain on top of

his game.

The busiest times for the store are

Monday mornings, Friday afternoons and

Saturdays when the spaza shop owners

replenish their stock. The shop is closed on

Sundays and Dos Ramos will keep it that

way to give the spaza shops better sales

opportunities over the weekend, which also

ultimately boosts his sales as their supplier.

Helping and rewarding the communityCustomers are attracted by month-end and

seasonal promotions. As a special treat for


Bulk confectionary and snacks alone create 15% of the store’s turnover.

wholesale storewatchwholesale storewatch

Spaza shop owners can bring bags of coins to the coin exchange, have them weighed and receive a voucher to pay for their next purchase.

Spaza shop owners can have large purchases delivered directly to their store.

his loyal customers, Dos Ramos has given

away a bakkie annually for the last three

years in a lucky draw. The lucky winner of

this year’s Nissan NP200 will be drawn on

11 February.

Most in-store promotions (including the

bakkie) are organised by the UMS head

office.

The Elangeni Cash & Carry team organises

an annual soccer competition for schools in

Daveyton’s poorest areas. The kids can have

a day of great fun, while suppliers man small

stands giving out food to participants and

spectators. Dos Ramos also uses his ‘hands-

on’ approach to help the community. Every

month he spends a set

amount and helps “wherever it’s needed

– be it a new roof for the church or a food

donation for an old age home,” he says.

Minimal shrinkageNext to entrance and exit security, Dos

Ramos hired four plainclothes shop

detectives who act as customers roaming

around the store. The tills are walled off

and the clients have to place their purchase

on the conveyor belts and then walk

around the till bay to pick up their goods.

This model is working well as the average

shrinkage is at a low 0.5%. Every case of

attempted theft is immediately brought to

the police.

Competition challengeWhen Dos Ramos started in 1992, their

store was the only wholesaler in the area.

Over the years, all the major competitors

have moved into the township and created

major competition. Dos Ramos comments:

“We managed to stay competitive by

staying focused on trends, customer

interaction and the personal relationship we

have with our customers. Service availability

and offering count just as much as pricing,

and I am still confident to say that basket

by basket, we can compete with everyone.”

A positive outlookThe store is doing very well with about

3 000 transactions on average per day and

an average basket size of R250. For Dos

Ramos, it is going to be another busy year:

“We can no longer go bigger because we

have run out of space to expand. So we

will focus on using our available trading

area more efficiently and do general

improvements. This year will also bring a

large till revamp. I believe that 2012 will

be a tough year, but by the end of the

year things should get back to normal and

spending behaviour should normalise again

after the recession.”

His hands-on approach will remain key to

the store’s future success. “At Elangeni Cash

& Carry, you’re not a number – you are a

customer.”


Owner, Luis Dos Ramos has given away a bakkie every year for the last three years to his loyal customers in a lucky draw.

To minimise shrinkage, tills are walled off and the customers need to put their items on the conveyor belts and then walk around the till bay to pick them up.

Every customer is free to purchase from the retail section or the wholesale section.


Offer the right range to build a destination in your storeBy laura DurHaM

Too many kiosks in stores are not

given the attention they deserve.

They are often dimly lit and so

squashed full of items that neither

customers nor staff can navigate

through the offering. It is therefore

time to focus on this profit centre

and rationalise ranges, improve

marketing and promotions and get

customers spending more.

no more luxuriesConsumers continue to muddle through the

post-recession climate and as a result, keep

their luxury purchases down to a minimum.

And unfortunately, many of these luxury

purchases can be found at the kiosk. Think

cigarettes, razor blades and cosmetics. Of

course, some kiosk items are never going to

fall off the shopping list – airtime, condoms

and Lotto (just in case they win the jackpot

this week!).

Restructuring your kiosk to adequately

meet the needs of the 2012 consumer is

therefore vital if you are going to keep up

sales and create a destination in-store.

Ebrahim Delair, owner of Yarona Cash &

Carry in Crown Mines, Johannesburg, says

they are planning to expand the kiosk side

of the business. “It’s already 5% of our total

turnover so we plan on growing it. We have

just hired an extra buyer for cosmetics as

well.”

The kiosk at Yarona Cash & Carry is

reserved for high pilferage items, such as

cosmetics and other personal care products.

Delair says these items were put behind the

counter from the start – 10 years ago – as

he’d come to know their risk after years

of experience in retail. “We also only keep

shrinks at the kiosk because most of our

customers are shop keepers,” he says.

Aaron Molefi, who has been working at

the kiosk in Super Jumbo Cash & Carry

since October, says that condom sales peak

at month end. He says the most popular

brands with their customers are Lover’s Plus,

Trust, and Contempo.

growing cellphone businessDelair chose not to sell airtime in-store but

to rather outsource that part of the

business. “It’s too dangerous,” he says.

Prepaid electricity is also sold out of the

Corner Cell store. Delair says there have

been a few cases in the cash & carry

stronghold of Crown Mines where thieves

stand on the main road looking down

at customer activity – and then follow

customers and hijack them.

Besides the security issue, airtime

and prepaid electricity have become a

cornerstone for many kiosk operations.

“Airtime and prepaid electricity have small

margins – but they’re a platform for big

business,” says Sheldon Frank, head of

the independent channel at Blue Label

Distribution. So much so that traders buy

airtime in bulk from wholesalers to then

resell from their spaza store or hawker’s

table.

A growing side of the retail business is the

entire cellphone category. Many stores now

have their own cell shops (often outsourced

to one of the main service providers in the

country) and this is certainly drawing

Kiosks featureKiosks feature

Legal cigarette sales have dropped significantly over the last year as consumers cut out luxuries. Unfortunately, this has also caused illicit cigarette sales to soar.

Kick-start kiosk

your


feet. Discount Cash & Carry in Fordsburg,

Johannesburg doesn’t have a kiosk per se,

but customers are able to buy airtime at

the in-store cell shop. They are also able to

register for RICA (Regulation of Interception

of Communication Act). This would have

been a huge drawcard for the store just

before the deadline to RICA existing

cellphones in July last year.

burnt out profits from tobaccoGrocery executive at Super Jumbo Cash &

Carry, Martin Fouche, says cigarette sales

have dropped by 50% over the past year.

Euromonitor International’s October 2011

report on Tobacco in South Africa confirms

this, saying cigarettes continued to decline

in volume last year.

According to Euromonitor International,

cigarette volumes fell from 22 528.5 million

sticks in 2005 to 19 431.1 million in 2010

– down 13.7%. The projected number for

2015 is 15 736 million sticks of cigarettes, a

further decrease of 19% from 2010.

In retail value terms, cigarettes in South

Africa grew from US$2 994.1 mil in 2005 to

US$3 894.7 mil in 2010 (based on 2010

fixed exchange rates) – a 30.1% growth. The

projected number for 2015 is US$3 839.5

mil.

British American Tobacco South Africa

currently dominates South African cigarettes

volume sales. “Since cigarettes accounts

for the majority of tobacco products, the

company therefore dominates South African

tobacco,” says the report. Philip Morris

South Africa (Marlboro) and JT International

South Africa (Camel) are other significant

players. “Morris’s acquisition of Swedish

Match South Africa in September 2009 is

expected to contribute to growth in volume

share,” suggests the report.

Fouche says their cigarette sales do pick

up over the weekend when the store is full

of retail customers (the rest of the week

is dominated by traders and shopkeepers).

Security is always an issue when it comes to

such a hot commodity so Fouche explains

the stringent measures Super Jumbo has put

in place. “When the armed delivery vehicle

stops at the retail customer’s premises, only

the security company can open the door.

Not even the driver has access.”

In Euromonitor’s breakdown of the

channel, 96.1% of cigarettes are sold in

store-based transactions, with 19.3% being

in small grocery outlets (convenience stores,

independent small grocers and forecourts).

Although spending less, customers will always visit a kiosk to top up on airtime, cigarettes and to play the Lotto. But could you be doing – or selling – more?

5% are sold through other grocery channels

– news agents/kiosks and street vendors.

This figure might just be growing as illicit

cigarette volumes continue to increase in

South Africa.

The report attributes the decline in

cigarette popularity to the significant

increase in the cost of living, which led to

limited consumer spending and consumers

subsequently trading down to cheaper

tobacco products.

Waging the war on illegal cigarettesAnd sometimes, these cheaper tobacco

products are illegal. According to

Euromonitor, the sale of illicit cigarettes

rose sharply in 2011, resulting in a reduction

in legitimate cigarette sales volumes in

South Africa. “This was prompted by the

increase in the cost of living and smokers

subsequently trying to minimise their

spending, including on cigarettes. They are

therefore resorting to buying illegitimate

cigarettes which are 50% cheaper than

legitimate cigarettes. This is having a

detrimental affect on sales of legitimate

cigarettes.”

Itumeleng Langeni, communications

manager at British American Tobacco South

Africa says the trade in illegal cigarettes

remains a major concern for the tobacco

industry.

“It is the fastest growing tobacco

category globally and locally and currently,

around 25% of cigarettes (one in every

four) sold in South Africa is illegal. The trade

in illegal cigarettes costs legitimate retailers

more than R7 billion in turnover profit

and more than R750 million in margins

annually,” she says.

“It is also to blame for approximately R3

billion lost in government revenue due to

unpaid taxes on illegal cigarettes,” she adds.

As a result, South African Revenue

Services (SARS) and the South Africa Police

Service (SAPS), together with the tobacco

industry and other stakeholders have joined

forces in an integrated effort to crack down

on the illegal trade in cigarettes. 2011 was a

very successful year with more than 7 000

raids and the seizure of close to 1.2 billion

illegal cigarettes. 800 key players in the


“Through our DSS model, retailers who

meet our qualifying criteria have the choice

of purchasing products directly from us.

The whole process is enabled by the latest

distribution technology meaning orders

can be delivered in an efficient and timely

manner,” she explains.

■ The retailer orders stock directly

from a BAT representative

■ The order is picked and packed

at a BAT distribution centre

■ The order is delivered to the retailer

■ The retailer pays for the order.

“Through weekly face-to-face meetings,

the representative assists retailers in areas

such as order management, new product

introductions, product quality, product

returns, and merchandising,” says Langeni.

regulations shaping the tobacco industry

Tobacco regulation globally is primarily

influenced by the Framework Convention

on Tobacco Control (FCTC), which falls

under the umbrella of the World Health

Organisation (WHO). “The FCTC has played

a major role in driving regulation that

potentially impacts upon the entire tobacco

supply chain,” says Langeni.

the wholesale network. “The South African

tobacco market is dynamic and has seen

significant changes over the last few

years. Organisations such as ours have to

understand the impact of changes in the

market, and revise their business models

accordingly in order to ensure their long-

term sustainability,” explains Langeni.

Many other fast moving consumer goods

(FMCG) products are already distributed in

this way in South Africa and BAT already

had DSS implemented in many countries.

illicit industry were also arrested during the

year.

“The tobacco industry is also taking a

hard line to fight illicit trade by stopping

supply to those retailers, resellers and

wholesalers who are found to be selling

illegal cigarettes. We feel that retailers can

play an important role in shutting down the

trade in illegal cigarettes and taking back

the market that is being plundered by illegal

traders.”

Says Langeni: “The increased incidence of

the illicit trade in tobacco products globally

has prompted the WHO to act decisively

against illicit traders by spearheading the

first global treaty on illicit trade in tobacco

products. This treaty is anticipated to be

passed at the fifth Conference of the Parties

to the Framework Convention on Tobacco

Control (FCTC) meeting in November

2012.”

Cutting out the middle manApart from the general trend of consumers

cutting down on such luxury purchases,

Super Jumbo has also been affected by

British American Tobacco’s programme to

deliver direct to store. “They’ve now got a

direct route to market, which has hurt our

sales,” admits Fouche.

BAT SA implemented direct store sales

(DSS) at the end of April 2008 to customers

who meet certain criteria, in addition to the

service that was previously offered through

Kiosks featureKiosks feature

Many stores now have their own cell shops – providing airtime, RICA facilities, cellphones and even contracts – to customers.

Big and bright signage will draw feet to your kiosk. Also, a familiar location – such as near the entrance or exit, will also increase sales.


Fouche says that not being allowed to advertise tobacco products in-store can also dampen the attraction of the kiosk.

The recent gazetting of the Reduced Ignition Propensity regulation (R429 of Government Gazette 34302, 16 May 2011) is also going to have a huge impact on the tobacco industry in coming months. When applied to cigarettes, the term ‘reduced ignition propensity’ refers to the fire risk posed by a discarded cigarette. “In order to comply with the standard, cigarettes are manufactured using a specific paper with special bands that are designed to, under

Sajid Panchbhaya makes sure the kiosk at Yarona Cash & Carry is fully stocked with all the shrink-wrapped cosmetics that their customers require.

Condom sales tend peak at month end so it is vital that you carry enough stock to get you through pay weekend.

specific conditions, lessen the amount of air flowing through the cigarette, causing it to self-extinguish if left unattended,” explains Langeni. This regulation will apply to all cigarettes sold in the country as of 16 November 2012.

BAT South Africa will be introducing its first compliant cigarettes into the market in March to ensure full compliance by the November deadline. However, the company does believe that there are more effective ways to prevent fires, such as consumer education and awareness programmes. “Reduced Ignition Propensity cigarettes are tested under very specific laboratory conditions. There is no such thing as a fire-safe cigarette and lit cigarettes should always be carefully extinguished and disposed of,” she says.

On the issue of regulation and legislation, Langeni concludes saying: “We are not opposed to regulation and believe reducing the public health impact of smoking is a goal governments should support. We are committed to open and constructive dialogue around tobacco control in order to have in place regulation that is practical, workable and, above all, enforceable.”

get creative with your kioskEven though various regulations and potential security issues do make running a kiosk a challenge, the rewards are worth the effort. Some of the ways you can boost your kiosk without too much effort, are:

■rationalise your ranges. Choose to

stock only the top selling brands in each

category – that’s what your customers

are going to be buying anyway.

■Promote the position. Some stores

have such poor signage that customers

can’t even find the kiosk, even if they

wanted to. Situate your kiosk near the

entrance or exit of your store because

this is what customers are used to.

■Direct feet. If you keep your more

expensive cosmetics behind the counter,

make sure there is a sign in your health

and beauty department to indicate this

and direct customers to the kiosk. Else,

they might just think you don’t stock the

products they want.

■Keep staff informed. It is vital that

the staff members working behind the

kiosk are aware of the entire offering. It

is no good them sending customers away

just because they didn’t know there was

more stock hidden in a box or that the

item was there in the first place – this

could push them out of your doors for

good!

■Clean up. Even though it is a small

space, make sure that your kiosk is neat

and tidy. Staff must take out the boxes

after restocking and you need to invest

in shelving, hooks and plastic tubs to

accommodate all the products – even

the little ones – neatly.

Cigarettes have been in the news often of late, particularly in Australia where the government has passed controversial ‘generic packaging’ legislation. According to politics.co.uk, from December, all tobacco products will be sold in olive green packets, which researchers say is the colour least attractive to smokers. “Experts are divided on how effective plain packaging would be,” the article reads. “One report suggested it would actually reduce the cost of the product by between 4.4% and 16.1%, and so increase consumption by up to 13.6%.”

On the local front, tobacco control measures are not new. The first Act in South Africa was introduced in 1993 and has since been amended three times – in 1998, 2009 and 2010. More recently regulations have been published regarding the ignition propensity of cigarettes and the communication of the availability of tobacco products at retail and wholesale levels. The former comes into effect in November this year while the latter is still at draft stage.

A new focus“2011 was a very important year for us. We

celebrated our 100-year anniversary, had a highly

successful year in terms of performance and saw

our biggest yet network upgrade programme,” says

Teresa Booth-Oliveira, GM of Chevron Products

Southern Africa. “It has been a time of re-looking at

the current structure from a profitability point of

view and also a time of consolidating the brand,”

she adds. In 2011, Caltex sold their market shares

in various central African countries in order to be

able to focus on the longer-term future of their key

markets in Southern Africa.

Caltex Southern Africa is a subsidiary of the

global Chevron Corporation, which ranks amongst

the top global energy companies. Chevron operates

in over 180 countries worldwide and runs over

800 service stations in South Africa under

the Caltex brand.

Meeting the demandOver the past year, Caltex responded to the

rising demand in the market for cleaner fuel

by introducing the 50ppm Diesel product

to their service stations. The introduction

has been received particularly well by the

4x4 market. The majority of new SUV

technology requires the low sulphur fuel for

operation and it increases the mileage per

tank significantly as well.

Caltex also continues to benefit from the

Techron additives to all their fuels, which

are designed to clean the engine while

driving. “The additive has been introduced

globally and we have been able to observe

that in other markets with flexible fuel

prices, customers will still choose Chevron,

despite of having to pay slightly more, so

that they can benefit from the Techron

additive,” says Booth-Oliveira.

Service excellence“2011 brought big winds for Caltex. We

had to sit down and determine what our

customers need from us – and service

By MicHel MacK

excellence remains the most important criteria. The

way we serve our customers determines whether or

not they will come back to Caltex,” she says. Caltex

responded to this by launching the ‘Siyanqoba’

training programme, aimed specifically at petrol

attendants. Siyanqoba means ‘we are winning’

and was the motto of the trainers as they visited

over 500 stations around the country in branded

vehicles over the past year. The trainers were

proficient in all 11 national languages, teaching

the petrol attendants an effective and appreciated

way of serving the customers. The success of the

programme was confirmed by a customer survey.

Customers were requested to rate the service of

his respective attendant and in return, were entered

into a competition. Caltex also issued a prize to

the highest ranking service station. Change was

visible and Booth-Oliveira comments:

“This programme has been a winning recipe

for us.”

ConvenienceThe last year also saw a major upgrade

of the exterior of Caltex service stations.

“We sought to create beautiful and well-lit

service stations with enough fuel pumps for

the respective demand, and great service

with a target market-specific product

offering with maximum convenience for

our customers,” says Booth-Oliveira. Caltex

already revamped 50 conventional service

stations with the new design concept.


smooth operatorsmooth operator

Teresa Booth-Oliveira is very proud of Caltex’s achievements over the

past year and will continue focusing on the streamlining

process in 2012.

The Caltex recipe to success2011 has marked an overall successful year for Caltex with major endeavours to transform and streamline

the brand. Wholesale Business spoke to Teresa booth-oliveira, gM of Chevron Products Southern Africa

to find out how the forecourt brand has managed its success.

FreshstopA major milestone of the past business year

was the rollout of the Freshstop franchise

model in partnership with Fruit & Veg City.

The collaboration resulted in a unique

concept of a C-store with a wide fresh

produce offering, combined with its own

bakeries – always offering fresh products

and then rounding the offering off with a

coffee shop. “We can’t influence the fuel

prices, but we can give our customers a

convenient store which is quick to use and

competitively priced,” says Booth-Oliveira.

The price level at all 70 already established

Freshstops is kept at supermarket level and

offers the customers a truly convenient

alternative. At several locations, Freshstops

are even able to maintain a price level

below the local retailers.

“The partnership with Fruit & Veg City has

huge value for us. As the biggest ‘super

retailer’ in the fresh produce industry, Fruit

& Veg City brings a very competitive supply

chain and its target market-specific outlets

enable us to tailor the product offering

specifically for the resident LSM class at

each Freshstop,” says Booth-Oliveira. “We

noticed a general tendency


The first Caltex in South Africa was opened in 1911 in Cape Town. Today Caltex runs over 800 stations across the country.

Caltex continually makes an effort towards consistently excellent and efficient customer service.

The Freshstop partnership with Fruit & Veg City enables Caltex to create a fresh produce offering at the stations, which is appropriate for the resident LSM class at each Freshstop.

The Siyanqoba trainers visited 500 service stations over the past year to train the petrol attendants in effective customer service.

among South Africans towards a healthier

lifestyle and therefore strongly believed that

this country is ready for a convenient store

solution that is healthy and convenient. The

concept has proven to be a full success and

we are very proud of what Fruit & Veg City

is doing,” she says.

Independent ownershipAnother part of the streamlining process

was the introduction of an independent

ownership model. “We were faced with

the question of how to deal with our

large network of outlets across South

Africa, which was very costly to maintain,”

Booth-Oliveira says. As a result, 200

service stations were placed under branded

marketers who operate their stations

independently and establish their own

logistics operation between the terminal

and their respective retail sites. The

concept was derived from the set-up of

the petroleum industry in America and

Caltex currently cooperates with five

branded marketers who operate up to 40

stations each. All partners are level 1 BBBEE

contributors and are supported by the

National Development Fund.

Caltex in 2012Booth-Oliveira concludes with a look ahead:

“In 2012 we will continue focusing on

efficiency and growth in Southern Africa,

refreshing our network and expanding the

service available to our customers. Our

customers always come first and we will

continue ensuring the best service for

them,”

8685M_RORO_AD_297x210_P.indd 1 2012/02/06 11:06 AM

A dynamic management team has

managed to convert the run-down

filling station into a destination

in Alberton and more than tripled

their turnover within only a few

months. Every customer is greeted

personally and regulars enjoy a

personal relationship with the staff

whenever they come to ‘fill up and

fresh up’.

First impressionThe first thing that will stand out to

customers when pulling off Klipriver Drive

into the Freshstop in Brackendowns is the

unique atmosphere among the staff at the

filling station. Every single staff member is

smiling and doing their jobs with motivation

and passion. The management team has

introduced unique approaches towards

managing their staff as well as their site.

Something differentAubrey Johnson and his partner, Rodgers

Ntumba purchased the Caltex station in July

2011. Before takeover, the forecourt had

By MicHel MacKbeen poorly looked after, staff had very low

motivation and the retail offering was down

to a bare minimum.

Johnson comes from a marketing

background and ran his own advertising

agency for 30 years, working with major

companies in the business landscape.

Instead of retiring, he sought a new

challenge. Unbeknown to him, he had been

cycling past potential for 11 years. Given

the location and scarceness of the retail

offering in the area, Johnson immediately

realised that the ‘for sale’ sign in front of

the Caltex site was a waiting opportunity.

Together with Ntumba, he decided to make

use of that potential and drew up a plan to convert the station into the hub it is today.

The station was revamped in November 2011, including the Caltex Freshstop franchise model. They added a car wash, flower bed and also upgraded the municipal bus station with a bench and a thatch roof. The station reopened after the revamp in the beginning of December.

Salt, Pepper & ChilliThe management team pays meticulous attention to detail. Every product in the store is positioned to face the customer and no fresh produce item lands on the shelves without being shined up. Even the bathroom has been decorated with a homely touch – a far cry from the average garage facilities.

“In making the convenience store (C-store) experience unique, all components go together to create a store’s success. Firstly, a brilliant administrator and manager of the people, which we have found in Vishnu Dass,” says Johnson. Dass has been the manager of the forecourt prior to Johnson and Ntumba taking over and has been a vital asset to the station’s newfound success. “We gave Dass the tools to turn


Store: Caltex Fresh Stop brackendownsLocation: brackendowns, AlbertonSize: 2 000m2

Staff: 30

opening hours: 24hr

Turnover per month: r450 000

Forecourt storewatchForecourt storewatch

Brackendowns Freshstop was revamped in November 2011 and has now become a destination for over 30 000 cars every month.

Excellence in every detail

Brackendowns Freshstop – from neglected filling station to ‘talk of the town’ with its own Twitter account

this operation around so that we could gain

back our market share.”

“Secondly, it is constant interaction with

the customers. The three of us constantly

take turns on the forecourt, in the shop

and at the coffee bar. Thirdly, it is our micro

marketing campaign that sets us apart

from other C-stores. Through our constant

presence the customers have dubbed us

‘Salt, Pepper & Chilli’,” laughs Johnson.

Micro marketingJohnson launched a comprehensive

marketing approach for the Freshstop.

Next to pole adverts on Klipriver Drive and

in-store promotions, he launched an sms

campaign to attract customers. “We are

one of the very few petrol stations with its

own advertising database and surely the

only station in the country with its own

Twitter account!” he says. They also had

a rabbit suit custom-made in line with

Caltex’s revival of their white rabbit mascot.

An employee dresses up as the rabbit every

day, attracting attention on the Klipriver

intersection and handing out sweets to

customers’ children over the weekends.

“The station used to be a graveyard over

the weekend, but now we have become

the talk of town and people come to the

station, just because they heard about us

and want to see what we are about,”

Ntumba comments.

Not just a petrol stationNext to the obvious petrol offering,

Brackendowns Freshstop offers a wide

range of retail products, fruit and vegetables

purchased straight from the farms, a

prepared food offering, as well as a selection

of fresh nuts. The Pitstop Café boasts a

supply of original Italian coffee and its

very own bakery. Outside, the customers

can find a stand with freshly prepared

boerewors rolls for quick lunches, as well as

a second-hand book sale on Sundays. The

flowerbed and surrounding grass patches

are meticulously looked after and customers

who are busy having their cars washed

enjoy a cup of coffee or a cold drink on

comfortable chairs in the shade of a Caltex

umbrella. The product prices are kept at

supermarket level and add true convenience

for the residents.

Reward – don’t punish“In this industry most people take a very

punitive approach towards dealing with

their staff and we have changed that

completely,” says Johnson. The team

introduced a reward system and at the end

of every month where the fuel target is met,

all employees receive R200 worth of retail

vouchers to purchase items at Freshstop.


Forecourt storewatchForecourt storewatch

From right to left: Aubrey Johnson, Rodgers Ntumba and Vishna Dass – better known to their customers as ‘Salt, Pepper and Chilli’ have a very hands-on approach to management and have unique ways to motivate their staff.

Every day an employee dresses up as the Caltex white rabbit attracting attention at the intersection and handing out sweets to the customer’s kids over the weekend.

Should disciplinary action be necessary, a

yellow card is issued to the respective staff

member who is then disqualified for the

vouchers during that month. “This motivates

the staff so much that towards the end

of the month they come to me every day,

asking how far we are from the target and

how many litres they need to sell daily to

reach the target,” says Ntumba.

Caltex also sends mystery shoppers to all

Freshstop franchises, evaluating the whole

‘experience’, including bacteria swabs to

comply with the Consumer Protection

Act, and giving them a percentage rating.

“Here we have introduced an all-or-nothing

approach,” Johnson says. When achieving

a 100% rating, all staff members receive

a R500 bonus on their salary and when

achieving four 100% ratings in a row, all

staff receives a free trip to Cape Town in

order to visit the country’s number one

Freshstop at the V&A Waterfront. During

the last evaluation, the station was graded

with 99%.

“All these incentives work unimaginably

well. Our staff is absolutely motivated,”

Johnson comments. The station now

employs a total of 30 staff members. “We

have taken over the 12 previous employees

of the station and everyone started with

a clean slate. We didn’t take over any old

records, but gave everyone a second chance

to prove themselves,” says Ntumba.

Petrol attendant, Lazarus has been with

the filling station for over 14 years and the

team decided to promote him to forecourt

supervisor. He now trains the other staff,

motivates them and ensures cleaning

routines are kept so that the station looks

spotless at all times. The 2 000m2 forecourt

is now found free of any sort of dirt and

not a single piece of refuse can be spotted

around the whole station.

All staff members live in the close vicinity

of the station, which is an ideal situation

for everyone, as the station operates under

a split-shift system. “The staff has the

opportunity to go home and spend time

with their families during the breaks instead

of having to wait around for their next

shift,” Johnson comments.

Thanks to well-trained and motivated

staff, as well as CCTV and availability of

armed response, the store doesn’t face any

major security issues and a dilligent daily

stock system, implemented by Dass and his

assistant Elizabeth, controls the shrinkage at

a low 1.5%.

Challenging environment“After taking over the station, our biggest

challenge was to regain our market

share,” comments Johnson. This has been

achieved by creating a good quality offering

appropriate for the resident LSM 6-8 class

and excessive marketing efforts. From

11 000 feet of monthly traffic, numbers

have increased to roughly 30 000 cars per

month, of which 20 000 drivers purchase

items in the store as well. In December, the

station sold over 260 000 litres of petrol.

The former Star Mart turnover of

R240 000 per month has increased to

R450 000 per month in this short period of

time. The busiest times for the store during

the week are between 5-10am, as well as

during 4-9pm, when people leave for or

return from work. The weekends are now

busy overall.

The team has already initiated plans

on giving back to the community. They

seek to set up a tent on the premises with

basic medical equipment and supplies,

where medical help and medication can be

administered to the community. More

severe cases will be referred for further

treatment.

Johnson concludes: “We have strived to

create an overall positive C-store experience

which draws people to the station. We

have great relationships with all our regular

customers. Our staff receive training every

single day and we lead by example. We even

use a mirror during training, so the trainee

can ‘see what the customer sees’. This really

works well in teaching the staff to smile and

approach every customer with a friendly

attitude.” The customers reward these

efforts and leave the station with a smile –

and a full shopping basket.


The team added a car wash and the cleanliness of every car reflects the forecourt team’s major attention to detail.

The fresh produce offering is purchased directly from the Freshstop at the market and selected as the ‘perfect mix’ to cater for the customers’ needs.

Lazarus has worked as a petrol attendant at the Caltex for 14 years and has now been promoted to be the forecourt supervisor. The staff is continously motivated and receive bonuses every time a target is met.

The team invested in an additional flower bed and revamped the adjacent municipal bus station with a bench and a reed roof.

By MicHel MacK

Social media has proven to be the

single most revolutionary trend in

gaining brand exposure, as well as

getting the attention of old and

new customers. Small stores and

big brands are learning to use this

new tool to promote their business

in a way that appeals to a wide

online audience. It’s an equally big

opportunity for every business to

get people talking about them and

eventually gaining new customers.

Wholesale Business spoke to social media

marketing specialist, Sez Meredith to find

out how the average store can become

the talk of the online world. Meredith

is the owner of SaysSez Social Media

Marketing and specialises in establishing

companies’ social media presences, as well

as maintaining it with relevant content

that attracts their specific target market

audience.

A large audienceIn 2011, 200 million new users joined

Facebook, amounting to a total of roughly

800 million active users worldwide. The

platform, Twitter counted 225 million users

worldwide at the end of last year with 100

million people actively ‘tweeting’. Social

media has developed from a marginal

pastime to a prime communication

medium for private, as well as professional

interaction. And yet, the majority of

companies still fall short of using this major

tool effectively.

Word-of-Facebook“2011 has been a major year of technical

development in social media. Just over half

of the Facebook population accesses their

accounts from their phones and are now

able to ‘tag’ people and show people where

they’re currently at. If they use Foursquare

or similar networks to show they’re visiting

a company, it acts as a recommendation to

their friends, creating what would once have

been word-of-mouth praise,” says Meredith.

oversleeping the development“Unfortunately, 2011 has also shed light

on how companies aren’t succeeding

in communicating with their fans and

followers. 95% of all posts on branded

pages remained unanswered by the

brands. Companies also tended to employ

‘automated posts and tweets’. 2011 showed

that the users saw through the automation

and ‘likes’ and comments decreased by

70%,” says Meredith. The users seek one-

on-one personal response from their brands

and lack thereof drives them away from the

brand.

One out of 13 people on this planet is on

Facebook and one out of 26 logs in daily.

With the increasing presence of companies

on Facebook, it is starting to become a

replacement for internet search engines. So

people who, for example, look for the best

supermarket in their area, increasingly refer

to Facebook, where a simple search term

brings up a map, contact details and often

customer evaluations.

How to do it right“Social media has become a marketing

necessity. What most companies fail to

recognise is that social media is not a

nuisance you have to comply with to be

considered up-to-date, but rather a medium

where you can advertise at very little cost

to people who are so tightly targeted that

they may have already visited your stores,”

says Meredith.

Meredith outlines five components that

are inevitable for a successful social media

presence:

■Personal versus professional marketing

Social media is all about being personal.

Postings on the social media sites must not

be too formal or polite. ‘Dear Sir / Ma’am’ is

highly inappropriate on Facebook and users

should always be addressed by their first

names.

■Entertainment

Users get tired of bland marketing and tend

to lose interest on the way. Posted


tech savvytech savvy

Customer interaction via Facebook and Twitter

Get maximum exposure with minimum investment

items shouldn’t be all about the company

to peak interest. Users should be directed

to different sites and pictures ought to be

relevant but also amusing. The users need to

get a sense that the site has more to offer

than just marketing.

■research

Specific research is needed to determine

the interests of the target market audience.

Competitor analysis will give an indication

of what is received well by the users and

what not.

■Cohesiveness

The branding on every page should stand

out above any modern design and let the

user know that he is in the right place

without being overwhelmed. Effective

branding is the key to an all-round social

media presence. From the page, the user

must know where to go and what there is to

explore. Navigation on social media is just

as important as the navigation on a website.

Consistency is equally important because

numerous followers tend to follow the

company on more than one platform.

■Communication

Communication is the most essential

part of a good social media presence. For

every comment by a user, a response must

be given. Queries should be dealt with

effectively and complaints should never be

deleted, but dealt with in public in order to

show the audience that the company cares

to keep their customers happy.

The 2011 statistics highlight

how prevalent social media has

become and how inevitable it is

for companies to have a social

media presence. A well-known

brand that has done things right

is Coca-Cola, which interacts with their

some 37 million Facebook fans on a daily

basis providing lifestyle-oriented content.

Meredith concludes: “The increase of

mobile users and the influx of technology

and the updating of social media sites looks

to increase, whilst customers are getting

more picky at which companies to follow on

social media, as those with little interaction

and communication will slowly be phased

out.”


Shell denies claims of withholding fuelBy MicHel MacK

Angry citizens lashed out at Shell

South Africa on Talk radio 702 and

on the online platform Twitter for

supposedly withholding fuel before

the price hike coming into effect at

midnight on Tuesday 31 january.

The price of petrol was scheduled to

increase by 34 cents and the price of diesel

decline by 2 cents at the end of January.

“Shell South Africa is currently

experiencing fuel supply constraints due to

the unscheduled shutdown of the SAPREF

refinery in Durban since early January and

recent supply issues at a third party refinery

in Cape Town,” Shell spokesperson, Elton

Fourtain told Wholesale Business.

Shell assured us that the current shortage

has no connection with the announced

hike of the fuel prices and that product

is currently “procured from a range of

potential sources to minimise supply

disruption,” says Fourtain.

The refinery is expected to resume

operation by mid-February and reports

suggest that other garages were

experiencing supply shortages as well.

Staff cause chaos at Discount Cash & CarryBy laura DurHaM

The trading floor of Discount Cash

& Carry in Fordsburg, johannesburg

was unusually quiet on Wednesday

1 February after an altercation

between staff and security the

previous day.It all started after a staff member,

who was being reprimanded on the

floor by a manager, got aggressive with

security guards and started threatening

management, explains store manager,

Lutchman Moodley.

Five or six other staff members joined

in the assault against the guards so their

head office sent more guards to placate the

situation.

By this time, the original staff member

had disappeared. Shakes Mashimba, a

manager in the electronics department who

has been with Discount Cash & Carry for

15 years, was badly injured and admitted to

hospital. He has since been discharged. “He

had just been trying to calm things down,”

says Moodley.

All staff members involved are now facing

internal disciplinary action but the empty

store illustrates the altercation’s effect

on customers. All this because the staff

member had been asked to pack product on

shelf in a particular way and he didn’t follow

instructions.

SA ATM cash withdrawal values down 8.81%The latest cash withdrawal statistics

released by Spark ATM Systems has revealed

a predictable drop in the average ATM

withdrawal values recorded across the

country in January.

The Spark Cash Index (SCI), which

measures the average value of cash

withdrawals across more than 1 500 Spark

ATM’s throughout the country, revealed

an 8.81% drop in January 2012 to R417

per transaction, from a record withdrawal

average of R458 in December 2011.

However, year-on-year withdrawal figures

for January 2012 are up by 2.63%.

According to Marc Sternberg, MD of

Spark ATM Systems, the January drop in

average cash withdrawal values is in keeping

with consumer cash withdrawal patterns

recorded over the past four years. “Since

2008, our recorded January withdrawal

averages following the December festive

period have consistently revealed negative

growth. January is also traditionally the

month when consumers adopt a more

conservative spending approach and cut

back post the festive season excess.”

He adds that additional factors such as

salaries being drawn earlier in December


news

Angry citizens accused Shell of withholding fuel to maximise profit from price hike.

Discount Cash & Carry was quiet the day after staff and security clashed.

also impact on lower ATM withdrawal

figures in January.

Sternberg says that the drop in January

ATM withdrawal values will be consistent

with a decrease in Stats SA’s Retail Trade

Sales (RTS) figures for the same period, as

to date the SCI has been a leading indicator

of these values. “Although consumers will

remain cautious, the current stable interest

rate will foster consumer spending and local

retailers should still enjoy a positive trading

environment in 2012.”

He points to the latest data released by

the University of South Africa’s Bureau of

Market Research (BMR) that forecasts that

local retail sales will record a moderate

annual growth of 4.5% in 2012 if retail

inflation remains stable. Economists at the

Bureau for Economic Research agreed that

BMR’s forecast was achievable, but would

depend on the currency (rand) movement

and European financial volatility.

“We expect average monthly cash

withdrawal figures in 2012 to return to

positive gains in April due to increased retail

activity during the Easter holiday period,”

concludes Sternberg.

Extending reach into previously unbanked areasCommitted to achieving its goal of bringing

banking to the people, ATM Solutions

opened its seventh branch, which has been

up and running since November last year. It

is in Witbank in the Mpumalanga region

“The area has always been serviced

but exceptional growth over the last few

years highlighted the need for a dedicated

branch to attend to the unique needs of our

business and banking partners, clients and

the ATM user community in the province.”

says ATM Solutions’ Mpumalanga branch

supervisor, Gerhard du Plessis, who initially

joined the company as a field technician in

2007 and has over six years of experience in

the field.

With a national footprint of over 4 000

ATMs deployed and operated on behalf

of eight of southern Africa’s major banks,

Wayne Abramson, CEO of ATM Solutions,

notes that the new branch is currently

responsible for servicing about 300 sites in

the Mpumalanga region. “Together with

our banking partners, we continue to strive

to financially include as many people as

possible, particularly in developing and

underserviced areas where communities

have the most to gain from an extended

banking footprint”.

Dedicated to run the branch in line with

ATM Solutions’ internal ethos of “Having

fun... making money... and doing good,” du

Plessis says that the team is committed to

making each client feel valued. “Personal

interaction based on service excellence,

complete customer satisfaction and trust

will continue to be the cornerstone of our

service offering,” he concludes.

Retail sales expected to grow 4.5% in 2012The Bureau of Market Research (BMR) at the

University of South Africa (Unisa) forecasts

an annual growth of 4.5% for formal retail

sales in 2012.

Retail trade projections are expected to

be moderate as higher retail inflation will

erode the purchasing power of consumers,

should economic growth, in particular, lose

momentum. Although retail inflation is

anticipated to increase by 4.5% in 2012,

it is expected that inflationary pressure

will remain contained. In the short- to

medium-term, rising household income

and a stable interest rate environment will

support consumer spending and ultimately

moderate retail trade sales growth.

On the downside, the greatest risks for

retail sales lie in the area of consumer

confidence, job market conditions and

negative development in especially the

Euro zone. In addition, should weaker

international activity transpire, domestic

retail activity could suffer further adverse

effects.

The BMR anticipates that retailers will

be reasonably successful in maintaining a

fairly positive trading environment in 2012

driven by positive GDP and employment

and labour compensation growth, despite

expected volatility in the international

and local economy during 2012. The BMR

growth prospects are most likely to result in

formal retail trade volumes valued at R664

695 billion for 2012. Real growth in retail

sales for 2012 is anticipated to be led by

sales in clothing and accessories, footwear

as well as glass, crockery, cutlery and

kitchenware, sport and recreation requisites

and hardware (all ranging between 4.7%

and 4.9%). In 2012 total retail sales will

probably conform to seasonal trends

followed in the past 10 years with roughly

47% of retail sales occurring in the first and

53% in the second half of the year.

Producer price inflation eases Producer price inflation – or the increase in

factory gate prices – eased to 9.8 percent

year-on-year in December, Statistics SA

says. “

This rate is 0.3 of a percentage point

lower than the corresponding annual rate

of +10.1 percent in November 2011,” the

agency reported.

The lower annual rate was driven by

decreases in mining and quarrying, other

manufacturers, wearing apparel, and

electrical machinery and apparatus. The

decreasing rate of inflation was partially

counteracted by increases in electricity,

basic metals and food at manufacturing.

PPI for December was lower than

expected, with economists expecting it to

hold steady at 10.1 percent, according to

Reuters.

The PPI measures the cost of a basket

of goods needed by a typical commodity

producer and measures inflation at factories,

mines and farms. (Source: Sapa)

PeoPle on the move

New face at Rainbow Chicken Ilse Gravett-Hultzer

has joined Vector

Logistics as supply

chain director. She

will have overall

responsibility for

the Vector supply

chain, as well as

the warehousing

and distribution

operations and will

be based at Vector’s national office in

Westville.



Issue 1, 2012Website: www.supermarket.co.za

EDITorIAL

Managing Editor: Stephen Maister (BCom)[email protected]

PA to Managing Editor: Ivana Arrigoni [email protected]

Editor: Laura Durham (BJourn)[email protected]

Writer: Michel [email protected]

Production Editor: Nina [email protected]

ADvErTISIng

johannesburg: 011–728-7006Stephen Maister: 082-604-5606Helen Maister: 082-601-3055 John Knust: 082-787-9896

Durban: 031–312-6810Marlane Williams: 083-447-3554Fax: 086-528-0907

Advertising email: [email protected]

Advertising bookings:Ivana ArrigoniFax: [email protected]

CIrCuLATIon AnD SubSCrIPTIonS

Yashik MaharajFax: [email protected]

ADMInISTrATIon

Finance Director: Lydia Maister [email protected]

Accounts: Yashik [email protected]

ConTACT uS Phone: 011-728-7006Fax: 011-728-6182 or 086-528-0754P. O. Box 46066, Orange Grove, 211915 Grove Road, Cnr 3rd Avenue, Mountain View, 2192

To SubSCrIbE

To receive Wholesale Business, please send details of your company, your position and your postal address, together with your subscription (see rates below) and make payment to:

Wholesale Business Magazine ccP O Box 46066, Orange Grove, 2119

Subscription rates

South Africa – R350.00 (incl VAT)

Southern Africa – R490.00 (Namibia, Botswana, Swaziland, Lesotho, Mozambique)

All other countries (airmail) – R1 120.00

CIrCuLATIon PoLICyWholesale Business has a print order of 15 000 copies. Our trade readers are the owners, directors, executives, managers and buyers of cash and carry wholesalers and their retail customers; franchised and independent convenience stores; garage forecourt stores; and urban and rural grocers and superettes.

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.

Wholesale Business is published by WB Magazine cc Reg No. 2007/152622/23

Printer: Typo

CIRCULATION AUDITThis publication’s circulation is audited to the exacting standards laid down by the Audit Bureau of Circulations. This guarantees advertisers that the circulation stated below is delivered as follows:

Grocers, defined convenience and forecourt stores, wholesalers & DCs:Controlled Free 12 901Paid Subscribers 91Total 12 992

*The above ABC audit guarantees the quantity of copies distributed. Further information on reader circulation profiles and reader research is available on request.

Audit Period: July–December 2011.

CalendaRDiary of leading trade fairs, exhibitions and events of interest

to readers of Wholesale business and their suppliers.

For more on these or other events, contact us on (011) 728-7006 or visit our website at www.supermarket.co.za

LoCAL 2012Date Event Place

15 February Sign Africa, Africa Print & Visual NelSPruiT Communications Africa Expo Roadshows

industry professionals can see equipment, media and business opportunities.

21 February Energy Indaba JohANNeSBurGAn event for energy professionals from across the globe and is rapidly gaining momentum as the energy business forum in Africa.

22 February Enterprise Risk Management Africa JohANNeSBurGA platform for risk and compliance practitioners to learn, share and debate on strategies and best practices in the global financial turmoil.

29 February Loyalty & Rewards Conference and Exhibition JohANNeSBurGThis highlights customer service, customer retention, partnerships, implementation, technology, branding and measurings.

2 March The 2012 Property Outlook JohANNeSBurGJoin our panel of experts as we discuss various property sector issues.

6 March Web 2.0 Conference JohANNeSBurGThis will ensure that we are on top of Web 2.0, social media, social business, and social media marketing, before the Web 3.0 takeover.

8 March SARCDA International JohANNeSBurGA premier toy, gift and décor retail trade show with international as well as local exhibitors.

12 March Retail World Africa & JohANNeSBurG Online Retail World Africa

optimise online retailing as an important part of multi-retailing channel strategies to capture new sales and growth.

12 March Cards Africa/Prepaid Cards Africa/ JohANNeSBurG Mobile Commerce World Africa

Banking and finance fraternity meet to debate the future of smart cards, payments, transaction and new applications.

14 March Mobile Money World JohANNeSBurGThis will help you understand the business model and target a new customer base.

14 March Sign Africa, Africa Print & Visual DurBAN Communications Africa Expo RoadShows -

equipment, media and business opportunities. Showcase products for the sign, display, digital graphics and wide format industries.

InTErnATIonAL 2012

22 February PLMA’s Annual Roundtable Conference BArCeloNAidentify opportunities in private label, learn about the latest trends and competitive challenges.

28 February EuroCIS DuSSelDorFinnovative technology solutions linking providers with retailers – and retailers among themselves.

1 March International Food Technology Trade Fair iSTANBulA food processing technologies fair for both the domestic and overseas food industries.

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