It was a sunny southern hemisphere spring day in October 1931 when businessman Max Sonnenberg and his son, Richard, opened the doors of a small shop in Cape Town’s city center. Allegedly housed in the dining room of the old Royal Hotel on Plein Street, within spitting distance from parliament’s back entrance, the store promised to bring value and affordability to South Africa’s white middle class.
Timing was far from ideal. The Wall Street Crash two years before had submerged the world in a frothing whirlpool of economic turmoil. South Africa too, was affected. Despite hardship dominated by poor economic growth, tumbling exports, and mass retrenchments, the store was a success. It did so well that it captured the entrepreneurial imagination of serial businessman Elie Susman who had made his fortune from cattle, banking, and retail.
Having a genuine eye for business opportunities, Susman was taken aback by the success he saw, prompting him to financially back the opening of a second store in Durban. More branches followed suit and soon Woolworths was deeply embedded in South Africans’ day-to-day shopping lexicon.
Since the 1930s, Woolworths has morphed into a multi-billion-dollar holding company, comprising the familiar Woolworths food and clothing brand, as well as Australian brands Country Road and David Jones. The latter, a denim retailer, was bought last year for $2 billion. The acquisition proved to be a massive boost for Woolworths Holdings Limited (WHL), which saw its profit over the first six months to December 28, 2014, jump by 29%. Sales increased by 55%, to $2.56 billion. Without the David Jones business, sales would have grown by only 12.5%.
The David Jones acquisition also led to an expansion of WHL’s footprint, to 1,200 stores in 15 countries worldwide, including Australia. The 633 Woolies branches in 12 African nations, including Botswana, Namibia, and Kenya, however remain the company’s backbone. This number is likely to increase.
“We want to grow our footprint by some 10% per annum for the next three or four years,” says Group CEO, Ian Moir, adding that a lot of attention will go to the food side of the business. “Our food footprint has more than doubled since 2010.”
While WHL has been doing well, things have not always looked bright. The retailer was badly affected by the economic crisis of 2008/2009, which sank South Africa into its first recession in 17 years. Moir says the attitude of the company, which only comprised food and clothing at the time, towards its customers, was one of the culprits.
“We had become complacent, arrogant, and too expensive, and we were not listening to our customers. As a result, our sales plummeted during the recession,” he says.
The downturn forced Woolworths to rethink its strategy.
“Someone once said that one should never let the benefits of a good recession pass by,” says Moir. “The Woolworths of today sees the customer as king, not the product. That is the big difference. If the customer thinks we are wrong, then we are wrong. If the customer thinks our prices are too high, then the prices are too high. That has been the biggest transformation since the recession.”
Complaints are taken seriously, says Moir.
“We used to be known as arrogant and not wanting to listen. Today, we reply to all complaints, queries, and criticism through our customer communications and social media teams. I even get some of them.”
The Woolworths approach has been well received in South Africa, as well as in other African countries such as Botswana and Namibia. Here the brand is still growing substantially. In some countries however, Woolworths didn’t manage to get off the ground. Nigeria is one of them. Last year the company decided to pull out of Africa’s largest economy for the second time.
“We were losing money hand over fist. Nigeria is a very difficult market for any apparel retailer to make money in. Firstly, the Nigerian retail market is largely informal, with very few shopping malls. The rental of the shopping malls that do exist, is very high,” says Moir.
“Doing business is very difficult, generally speaking, from traveling around to getting goods in the country,” he says, adding that Woolworths uses the same suppliers regardless of the location.
“We made a mistake by going into Nigeria, despite having the right partner,” Moir confesses. “It was the second time we tried it, and we won’t be trying it for a third time. Nigeria just doesn’t work for us.”
Moir doesn’t see Woolworths’ Nigeria adventure as wasted time. Making mistakes, he says, makes you grow.
“You, as a business, can always get better, and you will always make mistakes and there are always things to learn. My biggest fear is complacency in a business. If you think you won’t make mistakes, then you will fail.”
In other countries, business is going well. Moir says this is a result of the way Woolworths treats its employees.
“Our salaries are competitive and our benefits are better than elsewhere.”
Based on feedback from employees, the jobs portal, Indeed.co.za, gives Woolworths four out of five stars as an employer with staff discounts and incentives lauded. It, however, says salaries are too low and work hours too long.
The brand’s strength, according to Moir, is associated with value, principles, integrity, and sustainability.
The company donates $79,000 to educational causes every week. Moir also says the company is committed to environmental sustainability, such as minimizing water consumption and reducing the use of genetically modified organisms (GMOs).
Despite its good intentions, Woolworths has faced the wrath of environmental activists more than once, and for a multitude of issues, including the treatment of pigs, the use of GMOs and claims the company’s free-range milk was not free-range at all.
“That type of activism is good for us as it forces us to do the right thing,” says Moir.
“That is why we, apart from selling free-range eggs, want to ensure that free-range eggs are used in all Woolworths branded products, down to the cake mix. This was a tough process. You are, after all, dealing with large suppliers of which you are not the only customer. As a result, you can’t do things as fast as activists would want you to. It takes years sometimes.”
Environmental activist, Caroline Hurry, however, claims the company won’t speak to her.
“They refused to answer any of my questions in writing. In the beginning, when I started investigating their practices in relation to animal cruelty, they suggested I call them for ‘a little chat’. But being a journalist, I insist on answers in writing. I have also found that the soy in their bread had the second-highest GMO content in the country… Woolworths doesn’t label all their GM food. At best, the label says ‘may contain GMO’. I have now been blocked on Twitter, by the very account that told us to ask questions,” says Hurry.
While he has sympathy for environmental activists, Moir is no fan of the Boycott, Divestment and Sanctions (BDS) campaign, which calls for the active isolation of Israel and for the country to end its occupation of Palestine. In South Africa, BDS has its teeth firmly sunk into Woolworths. Their objective is to force the retailer to stop selling Israeli products – 0.4% of its total offer.
“These protests were very unpleasant for our staff and customers, with pig heads being left on our shelves and people charging through stores, knocking over our goods, destroying them even. We have had protestors lying on the floor, pouring blood over themselves. A court order has stopped this.”
Despite the court order, the protesters claim their actions were costly for the retailer.
“The campaign is successful and growing. An independent report, released by Wits University, states that WHL has lost close to $3 million, since the start of the #BoycottWoolworths campaign in August last year. A survey among 300 people has shown that 84% of respondents said they stopped shopping at Woolworths shortly after we called for boycott,” says BDS coordinator, Muhammed Desai.
Despite a few setbacks, Woolworths has grown from a small store in Cape Town to an international retailer – a story of shopping bags
Enterprise And Traceable Tea From Tanzania
How this Tanzanian entrepreneur’s tea startup is weathering the Covid-19 storm.
When Tahira Nizari started her social enterprise Kazi Yetu in Tanzania’s bustling city, Dar es Salaam, with her business partner and husband, Hendrik Buermann, almost two years ago, she didn’t anticipate the sheer scope of her big idea.
But she also didn’t expect that, because of an employee’s exposure to the coronavirus in April, she and her entire team would be quarantining for two weeks, stalling work in a year that she had projected growth for her company. With the pandemic’s onset, she lost most of her customer base in Tanzania, albeit temporarily, and was forced to come up with a game-plan and quickly pivot.
“It’s been an economic recession overnight, more or less,” says Nizari.
With family roots in Tanzania, and armed with formal degrees from Dubai and Canada, and experience in economic inclusion in the non-profit development sector, Nizari aimed to set a benchmark in the agribusiness sector in Tanzania through value-addition and by employing local women in her factory based in Dar es Salaam to produce “a traceable product” for the local and international market.
“Right now, tea is just exported in bulk completely (from Tanzania) and then all the jobs thereafter in that value chain are done abroad. So what we said was ‘let’s redistribute that job creation, let’s bring it back to Tanzania and let’s create a facility in which we can hire workers all locally and have a product that is 100% made in Tanzania’,” says Nizari. After extensive research in multiple target markets, both locally and abroad, building relationships with 250 Tanzanian farmers, setting up a factory exclusively employing local and previously-unemployed women, and many iterations of the seven blends of its flagship Tanzania Tea Collection using local flavors and spices, Kazi Yetu was ready to expand its scope in 2020.
“We were following our business plan… but we were really cautious and risk-averse (in 2018 and 2019). And then, we said, ‘you know what, when 2020 hits, it’s going to be growth’.”
Nizari was planning on reaching up to 4,000 farmers, buy machinery from China, grow the local B2B customer base, permanently employ all the women at the factory and begin to export on a larger scale after the launch of Kazi Yetu’s online store.
But when the coronavirus hit the local and international markets, things started looking very bleak, especially since Kazi Yetu is currently fully self-funded.
Not only did it lose almost all of its monthly income, but the farmers stopped meeting in groups for the training, so the supply chain was disrupted.
“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution.”
The factory also had to introduce safety protocols for employees at work and at home, as well as reduce the number of people working at any given time in order to adhere to social distancing.
An employee’s father also died of the coronavirus, which forced Nizari to ask everyone involved with Kazi Yetu to quarantine at home for 14 days.
“So what we said was, ‘look, we don’t want to risk their safety, but we also don’t want to risk their economic well-being’. So we just paid all of them their full-time salary,” says Nizari.
“Generally, our operational costs have been really hard to cover right now… but it’s okay, because it made us pivot.”
It inspired Nizari to expedite Kazi Yetu’s plans to export, kickstart the online store sooner than anticipated and build up stock to send to Germany, rather than just focus on the Tanzanian market, which is temporarily quite small. Exporting has been an issue, given limited shipping at the moment, but the European market proved to be a pleasant surprise for Nizari.
“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution,” she says.
Slowly, the factory is moving back to normal operations and Nizari is trying her best to ensure a steady income for the employees. Kazi Yetu is also now available on local delivery applications in Tanzania, so people can order tea to their doorsteps.
Looking ahead, Nizari hopes to scale up exporting through the online store and retailers, whether in Europe, or also in markets like South Africa where products from sub-Saharan Africa are popular, and North America where innovative African products are in demand.
“We want our product to be competing with products made in Europe, and for example, Sri Lankan tea, Indian tea and Chinese tea. We want Tanzanian products to be well-regarded,” she adds.
Since the teas are traceable, which is a unique selling point, Kazi Yetu is also working on an app that uses blockchain to allow customers to access data on the tea they purchase, from the farm level, all the way to their cups. This way, they will know first-hand the impact the product has.
In addition, Nizari is working on a farm-hub model to build Kazi Yetu’s supply chain by helping them produce better raw products through a no-interest investment that can be paid back with their final product over time.
“The whole ‘economy versus safety’ debate… it’s something we have to think about moving forward… You can’t just operate as a business that makes money, you have to think about… the well-being of your workplace, the well-being of everyone in your supply chain… And I think this is where social enterprises really come in,” Nizari adds.
And a hot cup of locally-produced tea can certainly help take forward any such deliberations.
– By Inaara Gangji
Farmer Forays: ‘Creating A New Line Of Business’
Nigerian agripreneur Shola Ladoja, the founder of Simply Green, says the pandemic-induced lockdown brought with it logistic adversity, but also more local sales.
With the marauding coronavirus disrupting lives and businesses in Nigeria, the financial stability of a majority of the country’s 200 million inhabitants has been severely affected.
The significant toll it has taken on economic activities has forced many small and medium enterprises to reimagine new ways of staying afloat. Covid-19 is also set to radically aggravate food insecurity in Africa. In spite of Nigeria’s dependence on oil, agriculture remains an important cornerstone for its economy, providing employment for millions especially in the informal sector.
The threat of starvation is so present that in a public address in May, Nigeria’s President Muhammadu Buhari, urged Nigerian farmers to produce enough for the country to eat, saying that the country has “no money to import” food.
But every cloud has a silver lining. The food shortage has presented some agripreneurs in Nigeria with serendipitous opportunities.
Shola Ladoja is the founder of Simply Green, which is a farm-to-table company specializing in vegetables, fruits, juices, spices and herbs. The border lockdown has meant that many of the retail and supermarket chains can no longer import foreign produce into the country.
But this hurdle created a new opportunity for Ladoja.
“[Previously], I tried to get my juices into local stores in Nigeria but they all turned me down and most of them wanted to buy imported juices. The lockdown meant that they had to buy a local brand like mine because they could not get them from abroad anymore. We are now able to sell a lot more during this time than previous years,” says Ladoja.
On the logistics side, however, Ladoja has also felt the pinch of the pandemic like most business that require consistent movement of goods and services. The lockdown scenario prevented his workers from coming in and as a result, the company’s daily delivery of juices, has come to an abrupt stop.
Ladoja has had to start thinking outside the box to make ends meet.
“We have come up with a fruit and vegetable box, which we sell directly on our website to our customers. So, they can now buy lettuce, kale and carrots, which we have never done before. So, this period has forced us to think about how we can expand the business and this time we actually created a new line of business, which was not in the plans for this year,” says Ladoja.
According to the United Nation’s Food and Agriculture Organization (FAO), even before the Covid-19 crisis, farmers had not been able to satisfy the demands of Nigeria’s population.
“I feel like the government should give out grants and loans and support for small businesses so that they don’t crash. I have friends who have complained they are going to shut down their businesses because they haven’t been paid for two months. A lot of people cannot sell their produce in Lagos because the markets are closed which is going to affect a lot of farmers at this time,” says Ladoja.
Nigeria used to import over a million tonnes of rice from Thailand annually. That number has been significantly reduced with the implementation of high import taxes. This has led to an abnormal increase in food prices in Nigeria since the onset of the coronavirus with the UN estimating the number of people facing acute food security stands to rise to 265 million globally in 2020 as a result of the economic impact of the pandemic.
Nigeria has substantially increased domestic rice production in the pandemic but is still a long way from reaching the levels needed for the country to sufficiently feed itself. Coupled with the decline in global oil prices, it is safe to say the adverse economic impact of Covid-19 on Africa’s most populous country is going to be felt for a long time to come.
All For Grooming Future Leaders
Katlego Thwane has had to dip into his own savings, with the Covid-19 crisis, to fund his noble cause, teaching the underprivileged in a South African township.
He is in his twenties, yet turning around the destiny of underprivileged young people around him.
Katlego Thwane, a 28-year-old born and bred in South Africa’s lively township of Soweto, is an educator and founder of the Atlegang Bana Foundation here that caters to primary school learners who struggle to keep up at school and need additional help.
“Our foundation also provides for needy learners from underprivileged backgrounds. One of my biggest campaigns at the foundation every year is to give confidence and motivation to learners for the year ahead,” says Thwane.
He has bagged numerous awards and accolades for his work, as a 2017 Young Community Shaper, 2018 Lead SA hero and featuring on live television show Big Up on SABC Mzansi in 2018.
Growing up, he was a “naughty boy”, as he describes himself, but says many are now astonished at the serious, ambitious young man he has become.
“Teaching has always been a passion of mine. I love seeing change, transformation and grooming leaders, and value their education while being innovative in taking our country forward.”
Thwane has recently established a clothing brand, BANA, under the Atlegang Bana Foundation. He is also currently handing out food parcels to the needy in his community, in partnership with Hollywoodbets.
“The virus has affected us immensely with many parents losing their jobs or taking salary cuts, we are not receiving the financial support as before. This has led to me [dipping] into my own personal pocket and [using it] to buy tutors data for teaching virtually,” says Thwane.
Most schools continue operating online because learners haven’t as yet returned to school, however, this has come with its share of setbacks.
Makosha Masedi, a parent of a Grade 4 learner, says her challenges come with network issues and understanding the tasks given to the child.
“Some of the programs that the work is loaded on to is not friendly for all devices, so submitting and retrieving becomes a problem, as also understanding some of the work,” rues Masedi.
But Thwane powers on, hoping for a better tomorrow, for himself and his country.
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