STOKvELS

SToKvELS gET BETTER DEALS AT WHOLESALERS

Buying your groceries in bulk quantities from a local wholesaler can help you get a discounted price, which of course would translate into a tremendous saving for you. This is a valuable habit to note especially in today’s economic climate where global food pricing is sky-rocketing and severely affecting poor consumers and underprivileged households. Usually most wholesalers and food distributors trade at discounted prices to consumers purchasing in bulk quantities. This would also be a potential opportunity for groups of people who have been saving in the form of stokvels or ‘buying clubs’ to spend their money on end-of-year groceries. Marketing Director of Makro, Chris Nezar says stokvel groups are able to negotiate better pricing deals for their individual members through bulk buying at Cash and Carry wholesalers. He says stokvel members, as a group, can also negotiate a better deal with transport contractors if transport is required for the delivery of purchased groceries. Nezar says the group must consider bulk buying if they have a need for the product in bulk quantity and if there is a cost benefit from buying in bulk, “but members have to collectively agree on what they want to purchase. There is no individual choice for members.”

Consumers buying at Cash and Carry wholesalers can get a wide range of fresh stock, product discount coupons and Nezar says that Makro stores have extended their shopping hours for stokvel pre-orders. He says their stores provide pre-orders for stokvels and have a secure shopping environment with electronic funds transfer facilities which are safer than cash payments. The butchery facilities at Makro also provide more options for meats than just pre-packaged. For instance you can get a cut to order where the butcher can then slice the roast into chops suitable for your family dinner. Additionally, butchers can provide other services like trimming fats, slicing or grinding meat and then repackaging it to be freezer-ready at no additional charge. But he advised stokvel groups to place their orders in advance and as early as possible. Nezar says stokvels are an important and integral part of saving because they have processes that encourage group members to be disciplined about savings. “Group pressure ensures that members do not miss their monthly saving contributions,” he adds. According to the Shopper Engagement Study conducted by the Point of Purchase Advertising, shoppers are more empowered than ever before to make informed and responsible buying decisions. But surprisingly it turns out that more shoppers are utilizing instore marketing and branding cues to make an overwhelming portion of their purchasing decisions. As a result of this finding, it’s clear that retailers and brands that fail to provide the in-store marketing and education the shopper needs, risk pushing shoppers into the arms of retailers and brands who are embracing in-store marketing. If you’re not utilizing in-store marketing to put your product on display as a wholesaler or retailer, you’re likely losing out in the battle at the shelf to get your product into a shopper’s basket. The study found that nearly one in six brands purchases are made when a display with that particular brand is present in store. Overall, a clear pattern emerged suggesting that displays in general are best targeted to a core group of loyal, female stock-up shoppers, even when she shows elements of high degree of pre-store planning in the form of list making and circular use. Belonging to a grocery stokvel group could help you to avoid unplanned shopping because you cannot buy what you want as an individual but all members must agree collectively on what to purchase.

Buyers guide Some products are cheaper AT CERTAIN TImES OF THE YEAR For discounted prices, follow sales cycles and build a shopping calendar.

General Shopping • Compare prices by shopping around for the best prices. • Familiarize yourself with • • seasonal sales. Do not buy things simply because they are on sale. Regardless of bargain prices extra expenses are just that – yet another drain on your resources. Be a smart shopper by buying quality • when it counts. Delay gratification – giving yourself more time to think about a purchase means you’ll make a more informed, less impetuous decision. Make your Lunch Get into the habit of rustling up your own food and you can easily pocket half of that cash, using the other half to buy your groceries in bulk quantities at a supermarket.

Downgrade your Brand

Purchases Going for the cheapest is a bit over the top but how about dropping a brand level on everything you can and the overall price drops by roughly 30 %. Often you only pay for the branded packaging. Watch Less TV Do you really need 300 channels – going down a tier in your DSTV service can save you some cash too.

Cell Phone Know your cell phone – match your usage as closely as possible to a plan so you don’t pay for service you don’t use.

Swap Toys If you have children, instead of buying them lots of expensive toys consider swapping toys with friends and family. Children often lose interest with their toys but love new toys. By swapping you can increase the frequency of new toys without spending any additional money.

Be a Late Trend Follower It’s tough to have to wait when the newest mobile phone or games consol has just hit the market but if you can hold back from buying them until at least six months after the new technology is launched you could save up to 50%.

Get Healthy Your health will directly impact the cost of life insurance and in some cases you can reduce your health insurance and avoid unforeseen bills if you get healthy.

Live Closer to Work Pay more for the house, an appreciating asset, rather than on petrol and maintenance on a car.

Groceries • Always shop on a full stomach. You are drawn to junk food when you • • shop hungry. Always shop with a list – it keeps you focused on what you really need. Go for fresh food – pre-packaged food generally costs more and is not good • for you. Buying non-perishables in bulk quantities can save money on your monthly shop. Food Shopping • Stop buying processed food at the supermarket rather make food • • • from scratch. Buy only what you need in perishables. Buy in bulk – single packs often cost nearly as much as multi-packs. Buy family pack items, these often work out cheaper than smaller packages and can be divided and frozen for later use.

Don’t Let your Eyes be Bigger than your Tummy Buy only what you need for the week and avoid stocking up with food which could spoil quickly.

If you run out of food mid-week, it’s not a big deal to make a second trip to the supermarket.

Cook at home and bring your leftovers for lunch. Car and Insurance • Keep your tyres properly inflated – you’ll prolong their life as well as save • • • on petrol. Regular maintenance of your car will make it last longer. Make it part of your routine to check the cars oil, water and tyres regularly. Always keep up to date on your car insurance – remember each year your cars’ value will decrease, so amend the retail/market value on your insurance to ensure that you pay the right premiums for your car insurance. Household Insurance Update your household inventory for insurance purposes. Check on replacement costs; grade your household goods correctly to ensure you are not over insuring your household items.

Electricity Bill Savings • Electricity is a problem in South Africa and the costs keep soaring, so you have to do what you can to keep your electricity bill down. • Switch off the TV when no one is • watching. Turn off the lights when you are not • using them. Buy energy efficient products/ appliances (this also saves the • • environment). Unplug unused appliances – only have chargers plugged in when you are charging things. Wash your clothes in cold water and hang them outside to dry rather than using the tumble dryer. Banking • Eliminate unnecessary fees. • Avoid ATMs outside your banking network. • Check with your bank to make sure you have the best type of account for • your needs. Sign up for automatic bill paying to avoid late fees because that can tarnish your credit reputation.

STOKVEL Culture Stokvels for COmmuNITY upLIFTmENT

Members of the Boksburg Vosloorus Food & Beverage Association during one of their gathering in Vosloorus.

The social economy is one of the top 10 job drivers in South Africa and the sector is set to assist in the New Growth Path. This is government’s economic strategy, with a target to create at least five million jobs by 2020 through various economic activities that would direct surpluses to the social economy.

In 2011, Yogi Nambiar completed case studies on social enterprises in South Africa which were produced by the International Labour Organisation (ILO) in association with the African Social Entrepreneurs Network, Belgian Embassy and the University of Johannesburg.

The ILO defines social enterprises as organisations driven by a social mission that apply market-based strategies to achieve a social purpose. They include non-profit organisations and cooperatives that use business models to pursue their mission and organisations that make profits for social upliftment in the communities.

The stokvel concept has expanded to include a range of offerings that cover a broad spectrum of life needs. Money generated from stokvels can be put to good use by either starting or growing an existing business. Although to make a serious difference it may be necessary to join one in which contribution premiums are high. The following is the remarkable story about the rise of the Bondtitis Burial Society commonly known as the Bondtitis Benefit Scheme. Bondtitis is the name of a group in Marimba Gardens, a suburb outside Vosloorus, comprising mostly of former Soweto residents who acquired mortgage bonds for themselves. These elite “black suburbs” were created by the apartheid government in order to develop home ownership and foster a sense of belonging and political stability in black communities.

The name Bondtitis was adopted in the 1980s when bond rates had increased to a level which saw most of the group’s members reeling under the strain of bonds. They were no longer able to pay mortgage bonds or higher purchase accounts. When Bondtitis Burial Society started operating in 1992 they had 25 members. Later they approached an insurance company to form an underwriting relationship which saw them forming a special scheme that would also be applicable to other burial societies as well. Today the Bondtitis Benefit Scheme is a registered co-operative that consolidates the membership of 42 burial societies to provide an integrated and more sustainable service. They have an annual turnover of approximately R300 000, with three full-time employees. principal members across the Gauteng and Mpumalanga provinces. Bondtitis also have the responsibility of disbursing claims and are underwritten by Capital Alliance.

Highlighting the Bondtitis’ long-term vision, Patrick Mavuso, the chairman of the group said: “In terms of expansion, Bondtitis wants to service bigger groups such as trade unions and church groups. It also aims to become an intermediary for businesses with blue collar workers, offering them the same burial society membership services.”

The efforts of Bondtitis coincide with the National Treasury’s micro-insurance policy framework that encourages and facilitates the provision and distribution of good value, low-cost products that suit the needs of low-income consumers. These are provided for by a variety of market players who compete for the market, treat their policyholders fairly and are able to manage the risks of providing insurance.

Some of the few best practices and lessons learned from the Bondtitis business model are that co-operatives are built on a sense of collectiveness, responsibility, belonging, commitment and pride within the memberships. They fill the need to offer a high standard of client service just as any conventional company would do.

Andrew Lukhele

Grocery stokvel groups have long been credited for having taken proactive action by guaranteeing food security for their members’ families through facilitating bulk buying, writes Andrew Lukhele.

In 2011 the Department of Social Development launched the Food for All Campaign as a measure to address incidents of extreme hunger and malnutrition as well as a vehicle to restore the dignity of many underprivileged South Africans, including children, who experience hunger.

Through this campaign the department aims to deal with unfortunate incidents of this nature by: • Increasing awareness of the plight of people facing food insecurity and malnutrition in South Africa. • Continuously galvanizing all relevant and willing stakeholders to respond to the plight of food insecurity and malnutrition. • Aggressively targeting wards where malnutrition is excessively high.

Food prices are rising rapidly and economists are painting a bleak picture for consumers. Ensuring food security by containing and reducing the cost of food is affected by “relatively low levels of competition” in the food retail sector and inefficiencies in distribution that resulted from South Africa’s declining transport infrastructure. Rapidly rising food prices are also undermining poor South Africans’ human right to be free from hunger. Very steep hikes in administered prices are putting sufficient quantities of safe and nutritious food out of reach of the majority of the impoverished households in the country.

Various retail sector suppliers saw opportunities in gaining the loyalty of the stokvel market. Some suppliers have been offering large discounts on bulk buying for stokvel parties or for purchases for other special events such as Christmas. Sometimes they even invite the stokvel groups to come and spend their year-end savings in their stores and then suppliers, among other incentives, reward the three groups that spent the most money during the festive season with vouchers to a pre-determined value. Some stores even deliver the goods free of charge, catering for the fact that some stokvels found it difficult to transport their bulky purchases. However, stokvels often fall prey to suppliers limiting the number of items they wish to purchase, mostly because they buy bulk groceries intending to share these amongst all the members. This practice is prohibited and stokvels need to know that it’s their rights to buy any number of items that they desire without any prohibitions from a supplier.

You have a right to high quality goods and services. Suppliers are not allowed to vary the quality of the product or services in a discriminatory manner. Consumers should be treated equally, irrespective of gender, race, socio-economic status or their geographic locations. Stokvels fall prey to suppliers and service providers offering them all sorts of discounts and persuading them to sign up with their companies for the year-end, celebration and holiday outings. Many of these companies will send you e-mails, SMSs or constantly call you during odd hours and even on weekends. We all know that these kinds of offers are designed to rip people off – many of us are aware of that, so stokvels have the right to refuse unwanted SMSs, telephone calls, letters or e-mails. You have the right to protect your privacy and confidentiality in respect of unwanted or unsolicited correspondence. Stokvels should protect their privacy by not giving out their personal details over the phone. Stokvels and burial societies are prone to companies marketing, supplying or entering into agreements to supply goods or services at prices or terms that are unfair, unreasonable and unjust. This practice is prohibited and as stokvel you have the right to be protected against this practice and conditions.

However, there are other major weaknesses in doing bulk purchases from retailers and wholesalers instead of direct distribution channels. Direct distribution means that the producer or manufacturer sells his or her merchandise directly to the consumer at an affordable price. Through direct distribution producers can sell products cheaply because the overheads are low and there is no middleman to add costs to the selling prices.

Grocery stokvels speak to a basic physiological need and they account for 20% of the total 11.4 million stokvel membership. According to a survey conducted by African Response 64% of grocery stokvels make bulk purchases from various retailers and wholesalers once a year but a significant amount of purchasing is happening throughout the year as well. Indeed the idea of co-operative bulk buying through stokvels is fast gaining ground. No one feels the importance of bulk buying more than women because these are people who have to look after children and take care of households. This means that they have to deal with all the financial burdens, the rising prices and the education of their children.

Lukhele is the founding president of the National Stokvels Association of South Africa and author of the book Stokvels. He writes in his personal capacity.