Stocktake
Stocktake

Stocktake: Retail Masterclass discount offer for readers

Flux Trends has a special discount for Retailing Africa readers; a potato glut threatens SA producers; and Unilever promises to do better.

Flux Trends has a special discount for Retailing Africa readers on its Retail Masterclass this week; a potato glut threatens South African producers; and Unilever agrees to a range of measures to try repair the damage to its brand after protests and a global outcry over its racist TREsemme ads in South Africa.

Restarting business

RetailingAfrica.com is offering discounted tickets to a Flux Trends Masterclass on the retail industry. As the country adjusts to an opening up of the economy, business owners are realising that reopening for business is no longer a guarantee of instant recovery. As Flux has observed in the past four months, the Great Staggering is going to be not only a challenging period, but will also last longer than we thought. Too much has changed: thriving businesses have had to close; approximately 3 million jobs have been lost in South Africa; consumer mindsets – as well as disposable incomes – have shifted; supply chains have been altered and new communication channels have to be navigated. Many companies have no choice, but to change or readjust their business models, as was highlighted in a recent Flux Trends business solutions masterclass.

Flux Trends is hosting three interlinked masterclasses in September 2020, all of which are key to reviving or re-thinking business models, specifically for B2C companies, and addresses the challenges that will play out in the next six to nine months – a crucial period for business survival and recovery. The first one is Retail on September 16; followed by Marketing on September 23; and Innovation and Entrepreneurship on September 30. The crucial question retailers need to ask is: ‘How relevant is my product or service now, and how does it fit into a changed consumer mindset?’ Five months of lockdown have radically altered consumer behaviour. It is not only personal priorities that have been reassessed, but how imposed forays into ecommerce have changed shopping habits. These changes have in turn had a ripple effect on logistics and supply chain management.

Book now for the Retail Masterclass on September 16 with Flux Trends, using the promo code for Retailing Africa readers: RAALINEA and receive a R50 discount on the R300 price.

Unilever promises action

A week can be a long time in politics and retail; and Clicks and Unilever certainly took the consumer and political backlash head on as the TREsemme racist ad story went global. Unilever ended up meeting with the EFF after its protest action at Clicks stores and retailers moved TRESemmé from their shelves. Unilever made promises about tackling systemic racism within the organisation – a promise that Government says does not go far enough, calling for the global multi-national to source South African products and promote South African products internationally. This is what Unilever said after its meeting with the EFF last week: “We were shocked to discover that we had supplied images for the Clicks website that portrayed black hair as inferior. This was racist and we apologise unreservedly. We immediately began an investigation to understand what happened. At the same time, we began reviewing all the marketing campaigns and images in our South Africa portfolio to make sure they match our commitment to celebrate all beauty and promote diversity and inclusion. Going forward we will be:

  • Setting up a new Diversity and Inclusion Assets Committee, representative of our consumers, to ensure future advertising campaigns and publicity materials reflect our values.
  • Setting up an Advisory Board with internal and external experts to review how our hair care products in South Africa can offer consumers the solutions they want in positive and empowering terms.
  • Working with the new Advisory Board to develop programmes to deliver immediate support to black hair stylists and small professional salons.
  • Reviewing our mandatory diversity and inclusion training; accelerating our training on unconscious bias for all staff.
  • As agreed with the EFF on 10 September, we have asked our retailers to remove TRESemmé from shelves for 10 days.
  • We want to reiterate our sincere apologies to all South Africans and to the offence caused to black women in particular. We also apologise to the Clicks group. We will learn from this failing and we will accelerate our efforts to support the transformation of society, represent all communities and celebrate all beauty.

We sincerely hope all brands, and advertising agencies especially with their patriarchal and exclusionary power dynamics, take notes to start transforming internally to eradicate the systemic racism that still festers in most corporate environments.

This week in numbers:

R8.5 billion

The Potato and Vegetable Processors Forum (PVPF) which includes McCain Foods South Africa, Potato South Africa (PSA), Natures Garden and Lamberts Bay Foods, is lobbying the Government to institute a temporary prohibition on imports of frozen potato chips from the European Union as a consequence of market conditions impacted by COVID-19. Since 2000/01 potatoes accounted for approximately 45% of total vegetable crops produced in South Africa and contribute around R8.5 billion towards the economy. These numbers, however, are under threat due to a surplus of frozen and processed potato products in Europe, as a result of a decreased demand brought on by the COVID-19 pandemic worldwide, and significantly depressed prices. Cognisance must be taken that over and above the normal farm support that EU farmers receive, there were also special COVID-19 support measures afforded to potato producers.

André Jooste, CEO of Potato South Africa (PSA), says that the local potato industry has already suffered significantly from a decrease in demand as a result of COVID-19 related regulations, such as the closure of restaurants and fast food outlets, restricted trade and movement of informal traders. “The result was a significant drop in prices far below break-even prices for producers and a build-up of stock levels in the processing sector. A further blow due to low priced imports from other countries could be catastrophic.” As an indication of the size of the markets and potential severity of a surge in low prices imports, the EU produced 52 million tons of potatoes in 2018, of which 73.7% is produced in only six countries. In 2019 it was responsible for 68% of global export trade (including intra-EU trade) of French Fries. Volumes exported by the EU increased from 4.5 million tons in 2015 to 5.7 million tons in 2019; while exports are dominated mainly by two countries responsible for 81% of export trade. In comparison, South Africa produces approximately 230,000 tons of French Fries annually. The potential volumes available to be imported could have a detrimental effect on the South African market for years to come. New Zealand, Australia and the United Stated have shared similar concerns.

QUOTE of the week:

“The in store experience is often overlooked, as once shoppers have found the store, there’s generally no one there to help them on the floor, and besides, if they manage to find a desired size, the chances are it could be out of stock because the store is trying to minimise stockholding. Then to add to that, throw in a global pandemic that forces one to fear human exposure… It is key for retailers and brands to start tailoring their propositions accordingly. They need to define what their overall brand experience is; and what specific retail experiences are on hand to deliver for these different formats, balancing consistency, convenience, sales support, and product interaction.” – Michael Smollan, Chief Growth & Innovation Officer at Smollan, writing in RetailingAfrica.com.

 

*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: news@retailingafrica.com.

 

Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.

 

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