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Shoppers walk past a Truworths shop with advertisements on its windows at the Sandton shopping mall in Johannesburg, file. Reuters/Siphiwe Sibeko/File Photo
Shoppers walk past a Truworths shop with advertisements on its windows at the Sandton shopping mall in Johannesburg, file. Reuters/Siphiwe Sibeko/File Photo
 

The launch of Primark suggests that Truworths – which also owns Identity, YDE, Uzzi and Earthchild – hopes to tap into the growth opportunities present in the budget clothing market focused on lower-income consumers.

Subdued economic growth and the financial impacts of the Covid-19 pandemic on consumers are driving a retail preference for value purchases over premium goods. Nedbank’s Tasmika Ramlakan stated that this has been especially evident in the clothing category, where value players such as Mr Price and Pepkor have generally performed better than their mid-market and premium competitors.

Mr Price Group has concluded an agreement to acquire family-owned value retailer Power Fashion, which currently has 170 stores located across southern Africa…

26 NOV 2020


In its interim results report, Truworths said that the new Primark brand will offer “good quality at great value and highly competitive prices yet reasonable margins”, and will be strategically aligned with “suppliers that can react and respond with short lead times”. The merchandise mix will focus on carrying a wide range of volume basic and coordinated fashion items that are seasonally appropriate, and available in multiple colourways.

In terms of brand positioning, Truworths said that Primark will be a youthful, fashionable, commercial and aspirational value-brand, with an energetic and vibrant store experience to reflect these qualities. The company added that Primark will depict “a strong sense of current social values”, including local production, sustainability, recycling, charity and community involvement.

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Credit: Massmart
Credit: Massmart
 

The deal sees Black-owned Devland Cash and Carry, which owns and controls several firms that are active in the retail and wholesale trade of groceries and related products, acquire certain Masscash stores located in various parts of the country.

“Devland is owned and controlled by two historically disadvantaged persons (HDPs) while the target stores are not owned by HDPs. As such, the merger will also have a positive effect on the promotion of a greater spread of ownership, in particular to increase the levels of ownership by HDPs and workers in the grocery market,” said the Tribunal.

Masscash operates wholesale businesses for the lower segments of consumer groups, such as Jumbo Cash and Carry, Trident and Shield, while its retail division includes Cambridge Foods.

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How loyalty and rewards will drive shopper behaviour in SA's retail main market
 

1. Increase in sign-ups to rewards and loyalty programmes


It is no secret that a very large portion of our country’s economically active consumer base is facing even harsher and more overwhelming financial pressures than ever before. As such, 2Engage anticipates an increase in sign-ups to rewards programmes that deliver tangible and instant benefits for consumers.

2. Increased redemption of rewards


As people try to stretch their hard-earned income as far as possible, with rewards and discounts or cash-back for loyalty becoming an ever more significant motivating factor to purchase certain products and engage in certain behaviour, 2Engage expects to see an increase in the redemption of rewards by loyalty programme members as they “cash-in” on their loyalty to certain brands and demand fulfillment of their rewards.

3. Face-to-face interaction trumps online


In a world that has rapidly adapted to being online-friendly for customers in the mid-upper ends of the consumer market, face-to-face interaction for brands who wish to engage consumers in the independent mass market will remain incredibly important this year.

In a recent survey conducted within the independent mass market by Retail Engage and bonsella, subsidiary companies of 2Engage, 85.73% of respondents said that they contacted the loyalty brand via an “in-store agent”. Whatsapp, telephone, Facebook and email communication channels all showed single-digit results for the same question.

4. Price to remain the #1 driver of store choice


The modern South African consumer is more conscious than ever of factors such as price and convenience. In the survey mentioned above, 42.5% of respondents said that “store prices” are the reason why they shop at a specific store, with 30.14% of respondents saying that rewards benefits were their primary motivator. 2Engage predicts that this will continue and says that the gap between these reasons and others, like location, is most likely to widen as the year progresses.
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