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Shoprite's weak sales could indicate that Pick n Pay may be taking market share, an analyst believes. 
Shoprite posted turnover growth of only 3.3%, to R145.6 billion, on Wednesday morning.
Its share price was slaughtered on Wednesday.
Shoprite’s weak sales performance could indicate that the long-suffering Pick n Pay may be taking some of its market share, an analyst said on Wednesday.
 
Earlier on Wednesday, Shoprite reported a trading update for the year to end-June. Turnover rose only 3.3%, to R145.6 billion.
 
Gryphon research analyst and portfolio manager Casparus Treurnicht said the update shows that the past six months were clearly horrible for Shoprite.
 
The group previously reported turnover of 7.4% for the first half of the year, which means that turnover must have lost considerable momentum over the last six months.
 
By comparison, Pick n Pay’s South African sales grew by 8.0% in the three months to end-February. 
 
After bleeding customers in recent years, Pick n Pay has reduced its labour force by a tenth and streamlined operations. It has also invested in logistics and new stores, and within six months, over R1 billion had been extended to new Pick n Pay credit card holders. And in the past year, Pick n Pay invested R500 million in price cuts to become more competitive. 
 
"I believe Shoprite took some strain due to Pick and Pay getting more competitive but just as important, Shoprite suffering from a much weaker than expected economy," says Treurnicht. 
 
The trading environment is extremely tough, as is evident from Statistics SA latest retail sales number, also released on Wednesday: retail sales rose only 1.9% in the year to May.
 
Shoprite also faced hard times in some of its African markets. Its latest trading update had to account for the effect of hyperinflation in Angola. 
 
By late afternoon, Shoprite’s share price was down more than 5% to R208.89, though it recovered slightly to above R211. Treurnicht thinks that the share, which is still trading at a price-earnings ratio of more than 20 times, is still expensive.
 
“I think we’ll see the retail sector sell off in general but also Pick n Pay starting to outperform Shoprite. Pick n Pay grew sales between 5% and 5.5% consistently over each half for the last two years. It seems [Pick n Pay CEO Richard] Brasher has a clearly-defined strategy.”
 
 
Credit: Fin24
It would take Facebook just 18 minutes to pay off the £500,000 (almost R9 million) fine proposed as a punishment by the UK's data watchdog for the Cambridge Analytica scandal.
 
The Information Commissioner's Office (ICO) has suggested fining Facebook the maximum penalty for the way it mishandled user data and failing to safeguard people's information.
 
But the company makes so much money per minute from advertising that the penalty is barely a drop in the ocean.
 
Facebook made $4.8 billion (R64 billion) in net profit in the first three months of 2018, according to its own figures.
 
According to Business Insider's calculations, that means Facebook makes around $37,037 (Just shy of R500,000) a minute, which means it would take just less than 18 minutes to pay the fine.
 
Here is the calculation:
Q1 2018 (January, February and March) had 90 days.
Each day has 1,440 minutes (24 x 60).
Therefore in Q1 2018 there were 1,440 x 90 minutes, which equals 129,600.
$4.8 billion divided by 129,600 equals $37,037.04 profit per minute.
As of this morning, £500,000 is worth $663,575.
$663,575 divided by $37,037.04 per minute equals 17.91 minutes, or 17 minutes, 55 seconds.
 
Historically, the ICO hasn't had much power to issue a robust fine to companies which mishandle people's information. The £500,000 figure was the maximum penalty under the UK's data protection laws.
 
But now Europe brought in much stricter privacy laws in May, the GDPR. Importantly, these laws give regulators like the ICO much sharper teeth when it comes to issuing fines, with a maximum fine of €20 million (R316 million) or 4% of a company's global turnover.
 
Facebook made around $40 billion in revenue in 2017, meaning its maximum fine under the new laws would be $1.6 billion.
 
Facebook still has a chance to respond to the ICO before the watchdog makes its final decision. The company is expected to make its case later this month.
 
Source: Business Insider

Absa unveiled its new look on Wednesday, including a colour scheme that claims a wider spectrum of red. The bank has effectively been chained to the staid Barclays brand for more than a decade – so when Barclays ditched it, it decided to make deep changes.

Absa is even changing the voice that answers those who phone into its call centres, on top of 27,000 different forms and a total of some 500,000 "artefacts". Absa on Wednesday morning finally showed the world the new logo it has been so secretive about (although that leaked) and the colour scheme it will now be using (though that too leaked).

But in coming months customers will find changes to the massive bank's identity will run far deeper than that, down to the way it answers the phone.

Absa has recorded more than 10,000 individual items for the interactive voice systems used in its various call centres, says group marketing head David Wingfield.

Watch: A secret rehearsal of Africa's first ‘drone fireworks’ for Absa's big reveal today
"We are going for a friendlier tone, with slightly younger voices and different intonation," he tells Business Insider South Africa.

Those recordings are on top of the 27,000 different forms Absa uses that will now have to be replaced – and the 345,000 branded pens, notepads, lanyards and pieces of clothing it had made to introduce the new look.

In total Absa will be replacing some 500,000 different "artefacts", says Wingfield, ranging from TV ads to the signs used inside branches.

Those changes will take some 10 months to complete, with three branches and 15 ATMs scheduled to be rebranded per day.

Using friendlier, younger voices alongside a more "digital" logo is all part of moving away from Absa's past, says Wingfield, which has kept its brand shackled for more than a decade.

British bank Barclays first moved in on Absa a decade ago, and it has not changed its look and feel since.

After Barclays dumped Absa in a shakeup of its global approach, the local bank decided it needed to leapfrog all the changes that had come to the world – and marketing – since then.

"The old Absa and Barclays were much more austere and serious," says Wingfield. "The world now is younger, digital. That's what we're trying to capture."

Along the way, Absa expanded its colour range around the "passion red" of its logo. Using everything from pink to orange "makes us more playful," says Wingfield, but it is also just sensible. Every cell phone and computer screen will display a slightly different shade of red anyway; trying to keep to a pure brand colour is a lost cause.

So Absa's logo button will always be either "passion red" on white, or white on red, but there will be many other warm hues in its branches and in some of its ads.

Including all the forms and all the signs used in some 620 branches scattered throughout the country.

With that kind of scale and spread there will be "something of a lag" until each instance of the Absa brand is updated, says Wingfield.

 

Source: The Insider

SBV is offering a R1 million reward for information on a cash-in-transit heist that left two guards dead in Tsolo, Eastern Cape, on Friday.

It said in a statement that it took exception to loss of life and was offering the reward for information that would lead to the successful arrest and conviction of those involved.

Police spokesperson Brigadier Vishnu Naidoo previously told News24 that the guards were loading money at an ATM machine near a supermarket when a group of armed men pounced on them.

Naidoo said the suspects fled with an undisclosed amount of money in a hijacked van.

 

SBV said two of its guards were killed. The driver of the van was unharmed.

Counselling was being offered to those affected.

The company was also offering R100 000 rewards for information on heists that took place in Pietermaritzburg and Hammanskraal on Monday.

Security company Fidelity said on Saturday that despite figures indicating a reduction in cash-in-transit incidents during the month of June, it could be a different story for July.

"This week alone, there have been four cross pavement incidents and three vehicle attacks – one of these occurred in the Eastern Cape and two in Bloemfontein which is worrying as the crime could simply be dispersing into other areas," said Wahl Bartmann, CEO of Fidelity Security Group, in a statement.

Police officials on Friday welcomed the reduction of cash-in-transit robberies in the June figures, saying the implementation of the South African Police Service's nationwide stabilisation programme was paying off.

"These robberies have been reduced significantly by 61% in the month of June 2018, compared to the month of May 2018," Police Minister Bheki Cele and national police commissioner General Khehla John Sitole said in a joint statement.

More than 40 suspects had been arrested since June 4, 2018.

"Four of these suspects rank among the top 20 of identified suspects wanted for similar crimes," the statement read.

Cele and Sitole noted that despite the reduction in incidents, there had been several robberies and attempted robberies on cash-in-transit vehicles in the past week.

 

Source: News24

Absa is relaunching its brand next week. Last week it applied for new trademarks.
This is it's new (if still officially unconfirmed) logo – though we still don't know what it is doing with all the colours suddenly popping up.
Absa is due to relaunch its brand next week, but trademark filings show what its new logo will look like.

Absa applied for two new trademarks on 27 June, which now form part of public records, first spotted and reported by BusinessTech.

Absa has been using the word "digital" a great deal during 2018, and the new registrations have a distinctly digital feeling to them.

Absa has been dropping pointed hints towards its new identity since March.

It has also been using a range of colours in internal presentations since March – which seemed to have no meaning until similar colours started appearing on an in Absa headquarters in Johannesburg this week.

How the colours relate to the new identity is not clear, and as before Absa has resolutely refused to comment or answer questions.

However, Business Insider South Africa understands that staff in South Africa have been briefed about the new banner under which they will be working, and have kept the plans quiet to date.

Absa CEO Maria Ramos said in March that the new approach "will have something new and something old" "with an identity fit for the modern, new and forward-looking businesses we are creating."

"We are bringing Africa into Absa," she said.

 

Credit: Business Insider

Domestic sales figures in June 1028 have exceeded industry expectations but export sales continue to disappoint, reports Naamsa.

Vehicles sales by the numbers

New vehicle sales at 46 678 units show an improvement of 1346 vehicles (3.0%) from the 45332 vehicles sold in June 2017.

Overall, export vehicle sales at 26 790 vehicles reflect a decline of 4805 units (-15.2%) compared to the 31 595 vehicles exported in June last year.

Industry break down

Overall, out of the total reported Industry sales of 46 678 vehicles, an estimated 38 498 units or 82.5% represent dealer sales, an estimated 11.0% represent sales to the vehicle rental Industry, 3.7% to industry corporate fleets and 2.8% to government.

Car sales

The new car market in June 2018 at 29886 units registered a marginal improvement of 1261 cars or a gain of 4.4% compared to the 28 625 new cars sold in June 2017. Naamsa said: "On the back of fleeting replenishment the car rental industry contribution had recovered substantially by 15.1% during the month."

Bakkie market

Domestic sales of new light commercial vehicles, bakkies and mini buses, at 14261 units, declined during June, 2018 by 58 units or 0.4% compared to the 14 319 light commercial vehicles sold during the corresponding month last year.

Naamsa comments on June sales

Naamsa said: "The improvement in domestic sales, particularly new car sales, was encouraging given recent weak economic growth and investment numbers. It appeared that the new car market had been supported by improved business and consumer confidence.

"However, the decline in the leading indicator of the Reserve Bank over the past two months – suggested a challenging economic environment going forward. Normally new vehicle sales during the second half of a calendar year tended to show improvement on first half sales and this reinforced NAAMSA’s expectations of a modest annual improvement in 2018 domestic sales volumes compared to 2017.

The SA car market future

The organisation said: "Naamsa continued to project growth in export sales over the balance of the year. However, the industry’s export performance was likely to be affected by current protectionist policies in the United States which had increased the risk of a global trade war and this could impact on international trade flows, including vehicle exports."

Consumer watchdog Summit has withdrawn all assisted and initiated court and National Credit Regulator (NCR) cases it brought against Capitec.
 
The principle contention in these cases was against Capitec's Multi Loan product, which the bank discontinued in February 2016.
 
Summit Financial Partners' CEO, Clark Gardner, told Fin24 on Friday that it was a tough decision to settle with Capitec.
 
"Summit has always been about the consumer. The last six months or more, Summit and Capitec have been talking about how to improve the industry," said Gardner.
 
"Our view has been, after much deliberation, that it is in the best interest of consumers for Summit and Capitec to work together. None of the cases of complaints we had lodged had been decided on by the courts yet."
 
He said Summit and Capitec would now work on improving the unsecured lending industry in South Africa, in order to see how debt relief can be provided for consumers.
 
"We are really taking it seriously, and want a healthy unsecured lending industry in the country," he said.
 
Summit's primary concern with Capitec's Multi Loan product was the manner of the agreement, according to Gardner.
 
"To Capitec's credit, it stopped the product soon after our case had started, and the regulator also gave them a clear bill of health. So we concluded a forward-looking agreement where we will clean up the industry together from within.
 
"I am happy that we can be a positive force for change and consumers will come out far better."
 
"Both sides believed they had strong arguments. So, instead of continuing [to pay] high legal costs on something that is going nowhere in the courts, we decided to use our combined efforts on positive initiatives that will benefit the consumer," said Du Plessis.
 
"We will spend our money and resources on a programme to improve consumer financial literacy and consumer debt relief solutions. There is generally a lack of financial education in the market. Both Capitec and Summit believe we can help to address this."
 
He said Capitec does not believe there was anything "wrong" with the Multi Loan product, although it has since been discontinued.
 
"We now offer a credit card and a facility product to fulfil the needs of our clients," he explained.
 
The initiative with Summit will include programmes to improve consumer financial literacy, providing effective consumer debt relief solutions and building consumer financial capabilities.
 
Source: News24
Cape Town - The South African Human Rights Commission has said that economic challenges that prompted the VAT and fuel levy hikes announced in the budget could have been averted if the government had earlier demonstrated better management of the economy and clamped down on corruption. 
 
“Public and private sector corruption, according to the Auditor General, a fellow Chapter 9 Institution, costs the nation billions on an annual basis,” it said.
 
The commission, a national institution established to uphold constitutional democracy and human rights, said it believed a “significant portion” of the economic challenges facing SA could have been avoided had the state “demonstrated better management of the economy and demonstrated an intolerance toward corruption, inefficiency and maladministration”. 
 
In his maiden budget delivered on Wednesday, Finance Minister Malusi Gigaba announced that VAT would increase by one percentage point from 14% to 15%. 
 
The current zero-rating on foods including maize meal, brown bread, dried beans and rice would remain, and “limit the impact on the poorest households”. 
 
The SAHRC said it was “deeply concerned” that the VAT rate would go up, saying it was a tax that impacts the poor the most.
 
According to the budget, it is expected to bring in R22.9bn in additional revenue in the 2018/19 financial year. 
 
“Further, the SAHRC is also concerned with the increase in the fuel price through the introduction of a 52 cents per litre fuel levy,” it said. “This increase in fuel price particularly impacts on the poor as it affects the price of public transport and the price of goods as the vast majority of goods sold to the public are transported on the road.”
 
The commission also acknowledged that the budget was a “complex and difficult balancing act”, saying it was “fully aware” of the difficulties in limiting expenditure while collecting revenue through taxes and stimulating economic growth. 
 
Going up  
 
Gigaba had argued that the government was doing all it could to reduce the impact of the VAT hike on poor households, noting that the state was also boosting social grants payments and increasing the bottom three tax brackets.
 
He said plans to spend R57bn over three years on fee-free tertiary education for students with a family income below R350 000 per annum was another “important step forward in breaking the cycle of poverty and confronting youth unemployment”.
 
“Labour statistics show that unemployment is lowest for tertiary graduates,” he said.“Higher and further education and training is being made accessible to the children of workers and the poor.”
 
Source:News24
In 2014, the South African government announced a new direction in housing policy. The aim was to phase out smaller low cost housing projects of a few hundred units and focus exclusively on megaprojects – new settlements made of multitudes of housing units combined with a host of social amenities.
 
Given the uneven access to housing that resulted from apartheid, housing delivery has been a major focus of since 1994. Government’s 20 year review - 1994 to 2014 - reported that 3.7 million subsidised housing opportunities were created, undoubtedly a remarkable achievement.
 
Nevertheless in 2014 the then Minister of Human Settlements, Lindiwe Sisulu, became extremely concerned that house production had been falling. And, a backlog of 2.3 million families remained. The Minister favoured megaprojects (also referred to as catalytic projects) as a way of getting delivery back on track.
 
Large human settlement projects weren’t entirely new to South Africa. Several were already at an advanced stage of construction in 2014. What was new in this announcement was the idea that all housing would be delivered exclusively through the construction of megaprojects across the country. From 2014 to 2017, the Department of Human Settlements developed a list of 48 catalytic projects which was finalised last year.
 
In a recently published academic paper we argue that the policy was underdeveloped. The megaprojects approach moved swiftly from announcement, to discussion documents and frameworks, to the creation of lists of large scale projects. Most of this process occurred behind closed doors, with little consultation. And there has been little space to examine the limitations of the megaprojects approach – as well as the merits of alternatives, such as smaller urban infill projects.
 
Nevertheless the paper attempts to account for the uptake of the megaprojects idea within the human settlements sector, and understand the motivations and agendas of those who promoted it.
 
Rationales for megaprojects:
 
In a broad sense megaprojects are glamorous because they are much more visible and impressive than diffuse small-scale projects. As a result, politicians can brand their delivery more effectively. Megaprojects convey a sense of decisive action in which the state can flex its muscle in big hit interventions.
 
South Africa is focusing on new megaprojects to address its housing gap but it’s being urged to look within existing cities. Shutterstock
More specifically, champions of the megaprojects approach believed that large scale projects could deliver more houses quicker. When announcing the policy in 2014, the then minister of human settlements, Lindiwe Sisulu, stated that megaprojects would help deliver 1.5 million units by 2019.
 
Some advocates of the megaprojects approach, notably the Gauteng provincial government, were particularly attracted to the idea of creating whole new “post-apartheid cities” which could meet the “live, work and play” needs internally. Starting afresh with new settlements would be a way of designing urban spaces to avoid the inequalities and inefficiencies that beset existing cities. They would also bring major projects to poor areas that had little else to drive any significant economic growth.
 
Megaprojects were also intended to solve a variety of governance problems. In particular, it was extremely difficult to manage the 11 000 human settlement projects that were at various stages across the country. Consolidating these into just a few dozen projects was a way of focusing government’s attention and reducing administrative burdens and costs.
 
The megaprojects approach also seemed to be a way of managing the division of work and some of the tensions between different spheres of government and various departments. With some local authorities having taken on more responsibility for housing projects, national and provincial government considered megaprojects to be a way of bringing housing under more centralised management.
 
Concerns:
 
Some critics are less concerned about the scale of the projects than the fact that they could be poorly located. That’s largely because better located land is more expensive. In addition, there isn’t a great deal of well-located land that is large enough to accommodate new settlements of this scale.
 
The history of attempting to construct new towns shows how difficult it is to create new urban centres with enough jobs for the people who live there. There is a fear that megaprojects will be no different and once the construction jobs run out, residents would have to bear the cost of travelling long distances to jobs outside the settlement.
 
Megaprojects on the urban periphery are also counter to the plans expressed in a wide variety of policy documents to curb urban sprawl and densify existing cities. Peripheral locations also have other challenges. If new projects are located far from sewage, water, electricity and roads then these would have to be laid out great financial and environmental costs.
 
Other concerns have focused more directly on the huge scale of new projects. Big projects take many years to get off the ground, and so delivery can sometimes be suspended for a long time.
 
Towards a balanced policy:
 
In a recent parliamentary address, the new Minister of Human Settlements Noma-Indiya Mfeketo stated that catalytic projects “worth more than half a Trillion Rand” had been initiated. Yet she also announced that the budget had suffered a “massive cut” as a result of the fiscal challenges facing the state.
 
We believe that the moment should allow for some reflection on the now four year old megaprojects direction. This reflection should consider whether all housing should be delivered in megaprojects as originally intended by this policy, or whether a range of project sizes should be encouraged to facilitate, in particular, urban infill projects within existing urban areas.
 
Planned megaprojects should be evaluated with respect to their location, total cost to the state and long term sustainability. While some are reasonably accessible, others are peripheral, with marginal economic opportunities at best. South Africa cannot afford to construct housing in spaces that have few economic prospects and limited benefits for urban residents and the country.
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