Woolies’ Bizarre Gauteng Boycott

Johannesburg is ZA’s commercial capital, and yet some companies seem to believe that they can hide under the shadow of Table Mountain, snubbing the very large analyst and media communities in Gauteng.

I was frankly rather annoyed when I confirmed this week that there would not be a face-to face presentation of Woolworths’ latest financial results in Gauteng.   Instead those of us who are not within spitting distance of the sea, or of Parliament, and who wish to checkout Woolies’ updates, were offered written stuff, webcasts and conference calls.

This is really below par. The company is an important player in the retail economy, has had important reputational issues with the protests against the Israeli produce it stocks, and it is just not possible to have those chummy chats with someone on the other end of a conference phone line, or to really read the body language. And for many, a trip to CT for the live show is just too time-consuming and expensive.

But what do I know?   Here are the views of a few of our experts:

Chris Gilmour from Absa:

Woolies stopped presenting to a Jo’burg audience last year, after many years of successfully presenting in their store environment to enthusiastic audiences. This is the latest in a depressing line of Cape-Town based companies which take the view that face-to-face presentations will only be performed in Cape Town. This practice began a few years ago when Truworths stopped presenting in Johannesburg. Clicks followed in quick succession, and now Woolies. Foschini last presented in Jo’burg, to my almost certain knowledge, sometime in the early 1990s. Interestingly and refreshingly, Spur will be presenting in Jo’burg at the end of this month after only presenting in Cape Town for many years. Hopefully this may herald the beginning of a turnaround in thinking. The only large Cape Town-based retailers that make presentations in Jo’burg are Pick n Pay and Shoprite.

So what IS the thinking that deprives Jo’burg investors of presentations by most of these Cape-based companies? Cost is obviously an element, as taking a large contingent of management up here to present is expensive, not just in direct costs such as venue and catering but also in management time. Allied to the cost factor is the fact that almost all of these companies’ shareholders are Cape Town-based. Only a tiny fraction of financial institutional money is Jo’burg-based, and these investors will make individual arrangements to see the companies shortly after the results release. The big losers are the Jo’burg-based private clients, but I guess the companies concerned feel that a webcast is sufficient for their needs.

Simon Brown from justonelap:

Agreed that a conference call is not nearly the same as in person. That’s why we have lunches. If just using the telephone was perfectly fine then we’d never leave the office (and life would be a bunch more boring). But further, the financial hub of SA is Johannesburg, not Cape Town. Sure, they get the Mining Indaba – which in itself is strange as they do zero mining in Cape Town 

Conclusion:

Woolworths is an important listed company, which makes a hell of a lot of money in Gauteng. I have always detected a smugness in its media relations team, which is annoying, but tolerable if journalists are granted the right degree of access, and frequent interaction with management. However, it seems that the very large investor community, and other stakeholders, are being short-changed by this reclusive retailer. Its stance would be more credible if all other listed companies took the same view about their Gauteng stakeholders, but they don’t. Time to swap my Woolies card for a red card.

Tweet of the Day:

Fake Dispatch (@Fake_Dispatch): Janitor at the Large Hadron Collider finds several new particles while sweeping up after a party.

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