STOCK TAKE | Chicken Licken eyes everyone's souls and Shoprite has fans in Singapore

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Chicken Licken eyes everyone's soul

The chickens are restless

Chicken Licken, which nestles under the wing of Golden Fried Chicken – and has been described by the courts as "a manufacturer and purveyor of fried chicken of the golden-coloured variety" – has once again lost its battle for someone’s soul.

This time, it was fighting Soul Souvlaki, a Greek restaurant with a footprint of two, squawking in court (as is its right) about how it has "Soul" and "Soul Food" as registered trademarks.

Once again, the court has sent Chicken Licken back to its grease traps (it needs to pay its opponents' legal fees) after concluding that there was sufficient difference between "Soul" and "Soul Souvlaki" not to confuse the fast-food chain’s customers. (Soul Souvlaki is clearly a trademark, but it was seeking to make that official.)

Chickens (Gallus gallus domesticus) are, in fact, territorial animals, descended from dinosaurs after all (theropods, which includes velociraptors) and Chicken Licken is indeed aggressive, with the courts at one point describing its lawyers as "ever-vigilant".

And it has spent a wing and a leg on fighting numerous small businesses, including surf lodge Soul House and vegan outlet Oh My Soul Café, among others, but its use of the courts to assert itself in the pecking order hasn't been that successful.

Chicken Licken was hatched back in the early 1980s and its founder, the late George Sombonos, was the son of a Greek immigrant. The purveyor of deep-fried dead fowl itself needed to fend off larger rival KFC, which has a very similar product offering, and who apparently took issue with its name, given the Colonel’s catchphrase is "finger-lickin' good".

Chicken Licken’s presence in townships also meant it established a loyal customer base among SA’s black population, then under the boot of apartheid, and so it seems a natural fit that it would seek to leverage itself as soul food, especially as the cuisine, with roots in US slavery, became more prominent during the civil rights era in that country.

The origins of deep-fried chicken, meanwhile, are a little more contentious, with arguments that its roots are in West Africa, or that it could have come from Scottish immigrants (Scots are famous for deep frying things), with the first known recipe apparently dating back to the 1740s, from a British cookbook.

All this is very interesting, but at the end of the day it's about trademark law, and perceptions, and fair competition, but also numerous humorous moments in court papers (perhaps unintentionally), including "veganism is not known for the ostentation associated with African cool".

But there is clearly a lot of irony in a small business owner being sued by a multibillion-rand corporation, that on one hand is seeking to monetise how soul food helped support African identity, but then at the same time looking to strip identity from others. Guess the fried bird branding business is a bit of a zero-sum game. Also, Chicken Licken itself is likely to argue, though it wasn't given an opportunity to state its position by this writer, that chickens don't have souls (would be a bit awkward). Does Chicken Licken?

Shoprite's Singaporean fan

GIC goes shopping on the JSE

Recently, the Singaporean sovereign wealth fund GIC – the world's fifth largest, with $690 billion (R12.7 trillion) in assets – warned of rising inflation risks and said that it was factoring in the potential for a global recession.

In light of these risks, GIC said it will "stress test" its portfolio – which apparently did not prevent it from piling money into an African company battling daily power outages and food inflation.

On Thursday, Shoprite confirmed that GIC now owns a stake of more than 5% - from 3.8% at the end of July. At current prices, that means GIC bought shares worth a cool R1.6 billion.

GIC is no stranger to the JSE. It has previously invested in local stocks – including Bidvest, African Rainbow Capital Investments, Transaction Capital and Pepkor – for some time. 

Still, it is batten-down-the-hatches time on global markets and the fact that GIC would still see more value in Shoprite - whose price-earnings ratio of above 20 makes it pricey on the JSE - is a strong vote of confidence.

The retailer deserves it.

After monstrous growth, it is still grabbing market share, with sales now almost double that of Pick n Pay, while its Checkers brand continues to eat Woolworths' high-end lunch. Checkers Sixty60 has revolutionised grocery deliveries in the country, while every minute, 1 800 people are swiping their Xtra Savings cards. The group wants to open a record 275 new stores this year, which will only entrench its dominance.

Its aggressive appetite to conquer non-grocery markets makes it exciting to watch. Shoprite plans to grow its money market client base nearly sixfold to 15 million over the next five to six years, while it is now also selling holiday packages, and launched its own cellphone operator a few months ago, which already has more than 100 000 users.

GIC's increased investment is also a small vote of confidence in SA. After all, you can't get more South African than Shoprite – last year, the company arrested 200 people for armed robbery, after all. It is grappling with other local issues too, including inequality.

Earlier this year, it launched a staff BEE share scheme which will increase black shareholding in Shoprite Checkers to more than 19%. The cost of the scheme was blamed for a recent sell-off in its shares. This presented investors with a longer-term outlook – like GIC – with a golden opportunity.

Quote of the day

"This is a huge shock. If you compare this to the 1970s, and you compare this year to single years in the 1970s, and also government policies comes into play there in terms of energy markets. This is a bigger shock than in any year in the 1970s."
Bank of England governor Andrew Bailey

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Public-sector capital expenditure decreased by 3.0% between 2020 and 2021, to R198,2 billion, representing the fifth consecutive year of decline.

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Investec share price gain in October. The announcement of share buybacks helped to recover a 11% fall in September. (Source: Anchor Capital)


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