When I started to prepare my contribution to this newsletter, it hit me that we are already in the fourth quarter of the year. It made me wonder where the year had gone and whether we have achieved what we had set out to achieve.

Although generally not given to negativity, I have to admit that 2019 has been a difficult year. This is not something I say in passing, the industry sector, competitors included, demonstrated it to good effect. For example, Choppies, the Botswana- based groceries and general merchandise retailer which arrived in South Africa amid great fanfare a mere four years ago, found the going too tough. It recently announced its intention to withdraw from the South African market.

Even the performance figures of our well- established South African competitors with listings on the stock exchange show that it’s tough out there.

Unfortunately, this unhappy state of affairs could evolve into a self-fulfilling prophecy. Short-sighted management cut down on marketing, reduce staff and succumb to the widespread sense of despair. It is easy to see that the resulting job losses will exacerbate the situation further.

I am pleased to say that we at OBC didn’t fall into this trap. Instead of throwing up our hands in despair, we continue to work a little harder, hustle a little more and generally go out of our way to keep our customers happy. There was certainly no magic involved. We simply accepted prevailing market realities and responded appropriately. Some examples follow.

Our footprint continues to grow

The latest addition to the OBC family is located in Barberton, Mpumalanga. This brings the total number of stores we have opened this year to 14. Our brand’s arrival was well received by the local community and early trading results indicate that it will do well.

We have intensified our focus on franchisee support

For the past decade, our franchisee support infrastructure has provided support well above franchise sector averages. This was recognised by none other than FASA who named us Franchisor of the Year for two years running. For me, this was no reason to sit on our laurels. I firmly believe that improvements are not only possible but absolutely necessary. That’s why we split our existing team of area managers into two distinct groups:

Paul Ornelas’s heavy work load has been alleviated and his title changed to National Franchise Manager. He and his team of field service consultants (FSCs) will focus exclusively on franchisee support. Our purpose remains to grow and nurture successful entrepreneurs and this realigned focus of our support team will go a long way towards achieving this.

Victor Domingues was appointed National Manager: Corporate Stores. He and his team of area managers (AMs) provide focussed support to corporate stores.

We deliberately kept the number of franchisees one FSC is responsible for below internationally accepted numbers. This will enable them to focus on the real needs of the franchisees under their care and add real value to their operations.

Another ongoing initiative is the group- wide adoption of TradeLink. It is a cutting- edge combination of POS, inventory control and enterprise management system that has been tweaked to our specific requirements. After extensive testing at our corporate stores, we released the system to franchisees. The roll-out commenced last year and is expected to be completed by mid-2020.

Having TradeLink at their disposal enhances franchisees’ ability to control business performance and simplifies matters for them but there is more.

In addition to the features mentioned above, extensive work has been done to enhance our franchisees’ customer relationship management (CRM) capabilities. The OBC Club Card links right into this.

The Herding Cats platform, first announced at the recent Franchisee Conference, is a development that will ease franchisees’ administrative burden considerably. It is currently in the development stage but when ready for roll-out, it will:

  • Serve as a communications platform for critical messages;
  • House critical documents like legal contracts and certificates and track critical dates related to them;
  • Simplify access to an updated version of the operations manual;

Provide access to a library of essential information which will include the latest legal and compliance requirements. The launch of the Herding Cats platform is scheduled for the beginning of next year.

We work closely with our suppliers

The warehousing and distribution facilities at our DC are future-proof (at least for now.) In combination with our sound cashflow position, this enables us to purchase goods in bulk when the time is right.

Our two buying gurus, Johan van Wyk (dry goods) and Miguel de Freitas (refrigerated goods) utilise this competitive advantage to best effect. Firstly, they forecast demand and plan ahead to pick up branded quality products at bargain prices wherever possible. Secondly, they play an important role in ensuring that goods reach the stores in peak condition and on time, every time. This goes a long way towards keeping the retailers’ worst enemy, stock outages, at bay.

Our ever-growing range of OBC- branded products further strengthen our competitive advantage. Franchisees benefit because we pass on the savings resulting from bulk applies throughout the year. Our time- honoured slogan, Giving You More – and More… reinforces this message to good effect.

The Thola Zonke campaign is a more recent addition to our marketing arsenal. It leaves consumers in no doubt that their local OBC store offers them all the food essentials they will ever need under one roof. In other words, it’s a place where You Can Get It All: Great Service, Great Quality and Value for Money.

The campaign has been well received and I am confident that it will:
• Increase the number of feet that enter our stores;
• Increase the ticket value per customer.

 

Keeping the pipeline filled

On 23rd/24th October, I attended the conference of the SACSC (South African Council of Shopping Centres) together with the OBC franchise and property development team.

This annual event brings shopping centre developers together under one roof. I have found over the years that it is definitely worth attending because it keeps me and members of my team up to date with developments in the sector. It also offers opportunities to network and form useful alliances.
By way of example, OBC Riba Crossing, scheduled to open next year, can be traced back to an encounter I had with renowned shopping centre developer Mike Nkuna at this conference four years ago.

A challenge to franchisees and branch managers
I want to end my contribution with a challenge to you. Being out there in the market place, you have first-hand exposure to what consumers really want. To make this information count for something you need to pass it on to us but there is more.

Weatheadofficedonotclaimamonopoly on useful ideas. Instead, we firmly believe that many heads are better than one. That’s why we’d welcome your inputs towards shaping our brand’s future direction. It will guide us towards range development and the formulation of improved marketing campaigns. This in turn will result in increased sales and enhanced profitability at store level, so I really look forward to hearing your ideas.

Let me just add that some of the initiatives discussed above are covered more fully in dedicated articles elsewhere in this newsletter. Be sure to check them out!

Before I sign off, let me provide an answer to the question I posed in the opening paragraph of my contribution. For ease of reference, I will repeat it here: “When I started to prepare my contribution to this newsletter, it suddenly hit me that we are already in the fourth quarter of the year. It made me wonder where the year has gone, and whether we achieved what we had set out to achieve?”

Yes, there were some ups and downs but I dare say that overall, we did not do too badly. At group level, we will have added 15 new stores to our network before the year runs out. This number excludes the first two stores in the Kingdom of Eswatini (formerly Swaziland), which constitute our first foray beyond South Africa’s borders.

Expansion of our footprint isn’t just good for the OBC Group (Pty) Limited but has a direct and highly positive spin-off for franchisees. Adding extra stores translates into additional marketing funds and increases our purchasing volumes. This enhances the standing of our brand as well as our buying power, for mutual benefit.

In closing, I wish you an excellent holiday trading season. In this context, although we take every precaution to be geared up for anything that may come our way, peak demand combined with some suppliers being on summer recess could cause some interruptions of service. I’d advise you to plan ahead and get your orders in early, just to be safe.

Warm regards,

Tony Da Fonseca

CEO, OBC Group (Pty) Ltd.