The JTrain consortium has been chosen as the winning bid in the tender to build the Jerusalem light rail Blue Line, the Ministry of Finance, Ministry of Transport and Jerusalem Municipality have announced. The JTrain consortium is comprised of construction company Danya Cebus (TASE: DNYA), public transport company Dan and Spanish infrastructure company COMSA. The project will be built using the Public Private Partnership (PPP) method with JRail building, operating, maintaining and financing the project.

The Jerusalem light rail Blue Line project will include building and laying the tracks for three lines extending over 31 kilometers from Gilo and Talpiot in southern Jerusalem to Ramat Eshkol and Ramot in the north of the city. The line will include a two kilometer underground section from Jaffa Road in the city center beneath Geula and Mea Shearim to Sanhedria. There will be 53 stations along the line including three underground stations. The project also includes a new light rail depot in Malkah to accommodate 66 new light rail trains manufactured by Polish company PESA. JTrain estimates that the project will cost NIS 9 billion to build.

According to the announcement, the Blue Line will begin operations in stages between 2028 and 2030, although sources in the industry believe that this is an over-ambitious target date.

30% difference from the other bids to maintain lines

There has been criticism of the slowness of the examination of the bids and the delay of one year in announcing the results. The examination included a technical phase and a financial phase and the delay was due to the aggressive offer by the winning group, with scrutiny focusing on its ability to realize its economic plans. The difference of the winning group’s proposal was from the other bids to maintain lines. Another threat to the timetables lies in the widespread protests of part of the ultra-orthodox public against the construction of the lines.

There were also those surprised by the choice because in Jerusalem, Shapir and CAF are responsible for the construction of the other lines, and some believed that the tenders committee would prefer continuity and uniformity.

JTrain will operate the Blue Line for seven years with an option for another 18 years, while maintaining the network for 25 years.

The Jerusalem light rail Red Line between Pisgat Zeev and Mount Herzl began operating in 2011 and is currently being extended to Hadasah Hospital in the south and Neve Yaakov in the north. The Green Line between the Mount Scopus and Givat Ram campuses of the Hebrew University and Gilo is under construction and is due to be completed in 2025.

Published by Globes, Israel business news – en.globes.co.il – on September 21, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Africa’s largest retailer Shoprite’s Uniq clothing store promises quality at lower prices, and is letting go of some margin to deliver that promise to consumers.

This strategy, it says, will allow it to undercut the Woolworths Group on price for clothing of similar – or better – quality.

“We think we are going to be, price-wise, similar to or just below Woolworths but with better quality … we think we will be selling the same level of quality as a Country Road but priced a little bit similar to Woolworths, so that’s kind of how we are pitching our price-points,” clothing specialist for Uniq, Michael Coles, tells Moneyweb.

Read: Shoprite opens its first apparel store, with one eye on PnP Clothing

“We are giving up a little bit of margin. But that’s how we do things. The whole idea here is for our business to be margin accretive. We are not looking to [achieve] the margins that Woolworths is doing or Mr Price is doing. We’ve got a [more] conservative approach as long as it’s margin accretive,” adds Coles.

This strategy, he says, will benefit all stakeholders, including the customer and the shareholder.

The Shoprite Group ventured into the clothing business earlier this year with the launch of its first Uniq store in Canal Walk, Cape Town.

Since then, nine more stores have been rolled out across the country, including Ballito Junction Mall and Galleria in KwaZulu-Natal, Table Bay Mall in Cape Town, Secunda Mall in Mpumalanga, as well as Dainfern Square and Menlyn Park in Gauteng.

The latest opening at The Zone @ Rosebank in Gauteng brings the store count to 10, with the group announcing plans to open eight more stores by the end of the year.

‘Solid strategy’

Sasfin senior equity analyst Alec Abraham tells Moneyweb the strategy Shoprite has set out with the Uniq brand is solid. This is especially true considering the range it offers that is anchored in quality essential and functional wear – a segment of the market that may be underserved as other retailers pursue trends.

He adds that with consumers under pressure, many, like those in the wealthier income groups, are being forced to buy down. Uniq fills that gap by being the next landing spot for shoppers priced out of more expensive branded clothing but who still like quality.

Read: How mighty Shein is hurting TFG, Mr Price, others

“I think Woolworths, in their machinations of trying to move upmarket and maybe trying to be more fashionable to try and contend with the threat from Zara and H&M, they have muddied up that space a little bit, and I think they’ve actually created a gap for a quality player that can come in and possibly fill that gap. I think that’s probably what Shoprite has identified, and is trying to fill it.”

Man behind the brand

Coles, the main man behind the new clothing segment, has a long history in the clothing business, specifically businesses that leverage grocery retail dominance.

He has worked for the group’s main competitors, and credits himself with growing the Pick n Pay Clothing business, having started as general manager in 1995 when clothes were only offered in Pick n Pay Hyper stores. Later, in 2002, he led the charge in opening clothing stores across the country. Today, Pick n Pay has about 300 standalone clothing stores.

Coles later joined Woolworths, as GM of the Fashion, Beauty and Home division between 2019 and 2021. He steered the division through the challenging pandemic period, which saw a drain of consumer spending on office wear at the height of the work-from-home phenomenon.

Read:
Shoprite’s R215bn sales boom
Pick n Pay’s secret weapon
Woolies delivers record earnings after Australian disaster

With all this history in the business, he tells Moneyweb it was important for him to deliver something different for the group.

This difference has come with a strong emphasis on technological innovations in stores, such as the self-service-only checkout, sleek and luxury-leaning store design, and creating a brand identity separate from the group’s core grocery business.

“We are differentiating ourselves by virtue of the fabrics that we pick and by virtue of the fact that we will offer only core shapes but with an acknowledgement of fashion.

“But the most important thing is we’ve got technology that tells us what the customer likes and what the customer doesn’t like,” says Coles.

He Coles notes that Uniq stores will continue to grow as standalone stores – targeting about 500m² of space – with no overlap planned with the grocery offering.

“No department store, but if we find bigger sites, we will take them. For example, if we can get 700m² at Sandton, we won’t say no, and then we’ll find some additional categories just for Sandton to make it unique to other brands. But we will approach that as we go.”

Competitors like Pick n Pay and Woolworths have merged their different divisions – food, clothing and appliances – into large format hyper/supermarket stores over the years. Retailers like Makro and Game have also used this department store layout, which sought to give consumers the one-stop shop benefit.

Read:
Apparel, grocery retailers boost trading density growth at malls
Could Woolworths’s fashion turnaround strategy finally be taking shape?
Traditionally cash-based Mr Price sees rise in credit purchases

Although still offering this version of shopping convenience to consumers, Woolworths has recently begun creating more distance between divisions with the opening of smaller W.Edit stores.

Profit?

According to Coles, existing store sales have largely met the group’s expectations, falling mostly within or above target, with only a few still building momentum.

The first three years of Uniq’s existence will be about pursuing growth and establishing its position in the “value luxury” market. After that, says Coles, the business will focus on pursuing profit.

He adds that the business saw relatively high setup costs and it should take about 18 months to two years to recover these.

“We are in the fortunate position now of not having comparative sales, so unlike the other retailers, they are comparing themselves to how they did before … and are taking action accordingly. We are fortunate that we don’t have to worry about last year’s sales because there are none, so everything for us is new and free turnover if you like.

“I think our ‘managing’ issues will start probably two to three years down the track when we start getting proper traction in terms of sales densities, turnover and stocking up the stores to a certain level. I think we will start worrying about those metrics in due course,” Coles says.

For Abraham, the three-years-til-profit target Uniq has set for itself leans a little too much on the ambitious side, more so in light of the current poor economic conditions, which find consumers’ discretionary income wanting.

“It seems a little ambitious given the fact that we are in such a tough economy. Maybe that would’ve been realistic when we had decent growth in the economy,” he says.

“Three years could be done, but you’re going to need to build up scale very quickly, very efficiently, and you’re going to take market share. I think a lot has to go right for them to achieve profitability within three years.”

Read:

As I watched Chancellor Rishi Sunak unveil the government’s new Net Zero targets, I couldn’t help but feel a pang of disappointment. It’s a day that will go down in history as a black mark against British business, and one we will rue for years to come.

Sunak’s announcement marks a disconcerting shift in priorities that could have catastrophic implications for British businesses. It’s a stark departure from the UK’s previous commitment to sustainability and the long-term benefits it brings, both economically and environmentally.

For many businesses, this new policy feels like a sudden pulling of the rug from under our feet. We’ve been striving hard to align our strategies with the initial Net Zero targets, investing significantly in greener and more sustainable practices. Now, the goalpost has been moved, and the consequences for businesses are grave.

With this change, businesses will face mounting challenges. The financial burden of adopting new practices to meet these new targets, combined with the uncertainty surrounding the specifics of the policy, will place enormous strain on SMEs. This could result in job losses, reduced competitiveness, and potential business closures.

The impact extends beyond the immediate business sphere. Consumers are increasingly demanding sustainable and ethical businesses. A shift away from our previous environmental commitments could potentially damage our reputation in the eyes of consumers, both domestically and internationally.

The Importance of Sustainability

What Sunak’s announcement overlooks is the long-term benefits of sustainability. Prioritising sustainability isn’t just about protecting the environment; it’s also about creating a resilient and future-proof economy.

Green practices stimulate innovation, create jobs, and open up new markets. They make us more competitive on a global scale. By turning our backs on these benefits, we are effectively sabotaging our own future.

A Call to Reconsider

This policy change is more than a mere adjustment of targets. It’s a clear message about where our government’s priorities lie. It’s a decision that underestimates the resilience and adaptability of British businesses, and one that sidelines the importance of sustainability.

As businesses, we must not let this announcement deter us from our commitment to sustainability. We must continue to innovate and find ways to reduce our carbon footprints. We need to keep reminding the government and the public why sustainability should be at the forefront of any economic strategy.

It’s a dark day for British business, but it’s also an opportunity. An opportunity to stand up for what we believe in and to show that we won’t be swayed by short-term political decisions.

Let’s use this as a catalyst to engage in deeper discussions about the kind of future we want for our businesses, our economy, and our planet. Today, more than ever, we must reaffirm our commitment to sustainability and the long-term benefits it brings. Only then can we hope to navigate the challenges that lie ahead and emerge stronger on the other side.