Grocery Support Software
The software we develop will be used by companies and ordinary people to purchase digital vouchers from all the food companies for their employees when they are paying out wages. This software platform will become a strategic tool to help the Homecare Foundation and Child Protection organizations to support the vulnerable.
The Grocery Support Software is a simple solution to help thousands of lower income people. It will also help reduce risks of possible farm murderers where we believe that farm attacks might be related to the misconception that large amounts of cash could be on the farms..
Benefit for Food Companies
Food companies benefit when they reduce the number of cash-intakes. It is COSTLY to transfer cash via security companies and thereafter to bank the cash into their bank accounts!
Everybody gains if software can reduce cash handling costs.
The cost savings is conveyed to low-income people which result in them getting access to more groceries.
It will only be possible to support millions of low-income people if we use advanced technology to interact with the different food companies.
South Africa’s unemployment rate in the first quarter of 2015 was at its highest level since 2003, Statistics SA reported in May 2015. The results of the first quarter showed that the working age population was 35.8 million, which included 15.5 million employed, 5.5 million unemployed and 14.8 million not economically active people.
Our main focus is to support the employees in the tourism industry. In the next section of Tourism, we discuss all our support strategies. One of the most important focus points is to help labourers in the tourism industry gain additional groceries. We will also share funds that is currently ending up in European based companies with wage earners in the tourism industry… almost like a type of shareholding scheme where booking commissions is shared with staff and not with European based companies.
According to information we gathered from STATS SA on a report about Tourism Accommodation in February 2017, the accommodation companies received R22,7 Billion for accommodation From January till December 2016. (This is only for accommodation and exclude other costs such as restaurant meals etc.)
The Homecare team believes that at least 85% of accommodation bookings were done via the internet. We forecast that for 2017 book year, the income grew approximately 9%. (It is due to price increases and additional growth in tourist support)
We estimate that the Hospitality industry lost R2.7 Billion for the 2017 book year in booking fee commissions that in most cases end up in companies abroad. We know that it will be possible to secure at least 60% of these booking fees and use it to help the employees working at companies in the accommodation industry. We however need specialized technology to execute such a business plan,
We explain on this page that we aim to work with at least 50 000 Low-income people. The technology however must be able to support millions. The following industries / groups will in future get access to our support:
Agriculture (Employ more than 800 000 according to Agri SA)
Agriprocessing (Employ more than 183 000)
Automotive (Employ more than 6 000)
Domestic workers (According to Business Tech, in 2015 the number exceeded 1 million)
Fuel stations (Petrol attendants – more than 19 000)
Hospitality Industry (Employed more than 679 500 in 2014 – Our main focus)
ICT and electronics
Private Security Companies (According to Google searches, 450,000 registered active private security guards and a further 1.5 million qualified (but inactive) guards)
Textiles, clothing and footwear (dropped from 200 000 to 19 000)
There is a large number of people who relies on the SASSA grants to pay their basic needs. The software structure is also being developed to help churches so that they can order vouchers on behalf of their congregation members. This will reach a large number of the 14.8 million not economically active population. The largest church group in Southern Africa is the ZCC church.
Zion Christian Church
The Zion Christian Church, also known as Boyne, is the largest African initiated church operating across Southern Africa. The church's headquarters are at Zion City Moria in Limpopo Province, South Africa. According to the 1996 South African Census, the church numbered 3.87 million member.
According to the church, they have more than 16 million members… we believe this include their children.
The technology we develop is also advanced in the sense that when churches help the poor, the pastor receive groceries out of the network under their management.
In short, our business model to work with only 50 000 Low-Income people across all the industries including domestic workers is a reasonable target. Our focus is to support approximately 66% of staff in the Hospitality Industry. This might be the largest number of Employees (Approximately 450 000) and they will on average receive an additional R500 per month towards groceries out of Booking Fee Commissions that will be shared with the staff.
Domestic workers are the lowest paid people in our country.
We need to look at the circumstances of domestic workers and take everything into consideration.
Remember that most likely more than 80% of the domestic workers have families, meaning that they are not the only persons that earn wages.
They usually have children under their care. It is a fact that most domestic workers work to earn a wage, but they also rely on the Social Grants from Government to help them raise their children [Child Support Grant (12,196,981 beneficiaries). R380 per month to the main caregiver of a child 18 or younger. The applicant must earn less than R45,600 (if single) or R91,200 (combined income if married) per year.]
The minimum wage for domestic workers is R2 545.22 per month. The domestic worker will usually have access to her husband's income (might be a wage as well) plus on average 2 times R380 per child under her care. The immediate family might combined have access to more than
R6 000 cash per month. The domestic worker might one day ask her employer to convert up to R2 200 per month on her behalf into digital vouchers to support her family. It could also be that she will ask her employer for a percentage of support, and her husband will ask his employer to order a number of digital vouchers. (They might use the SASSA Grants for other expenses.)
It is with today's food costs almost impossible to provide to a family of 4 with less than R2 200 per month. R2 200 will barely be enough to purchase the basic essentials plus electricity. Remember that people buy clothes, medicine, food, cleaning materials and alcohol from retailers. They also pay for their airtime (phones) when they visit Shoprite, Spar etcetera.
We also need to take other aspects into consideration. In most cases, the person that buy groceries for the family do this on almost a daily basis. Remember that these people do not own their own vehicles. They use taxis as transport and they tend to purchase a small number of items more regularly. Taxi owners/drivers do not allow a passenger to load large bags into their vehicles. They need the space to transport people. To back this statement, we can use information published by the Shoprite group: https://www.shopriteholdings.co.za/
We are the largest supermarket retailer on the African continent. Our Group is a R141 bn turnover business, with a staff complement of more than 148,000 people. We serve local communities with the lowest price promise. 35 million people shop in our footprint of more than 2,811 outlets every day.
There are numerous food supplying groups (Pick n Pay, Spar, OK, numerous smaller independent companies and Spaza shops) who also have clients on a daily basis. The number of people inside food stores is much more than 35 million people per day!
Most salary earners with vehicles might visit food stores on average 6 times per month. Salary earners can purchase more products per visit and transport it home with their vehicles. (Wage earners who will be supported do not have this privilege to purchase in the same way most readers do.)
Wage earners also have additional costs to purchase groceries. If they withdraw cash from ATM machines, the cost is R8 per transaction (native machines via Capitec = lowest compared to all banks). Let’s say the person responsible to purchase groceries visit stores 20 times per month and withdraw cash only 10 times per month. R80 of the funds they received are then allocated to bank fees, due to their circumstances. Most of the wage earners prefer not to carry large amounts of cash on them, fearing robbery. There is unfortunately a lot of people who are not well educated regarding financial management. Wage earners with debit cards might also pay with their cards. The debit costs per transaction = R1.50. This will result in R30 per month on banking fees.
Most likely the largest unnecessary costs is the "Cash Send" costs. Wage earners often send cash to their family members for groceries. These costs is R10 per transaction. We need to help the poor save costs that should have been allocated to groceries.
There are Three benefits:
The domestic worker can earn an additional 4% on their grocery spending. It may not seem to be a large amount, but if you consider that the domestic worker needs to make a living with almost nothing, then every sent they can save or earn additionally will help. The Homecare team can pay out an additional R88.00 (4% of R2 200) per month towards the domestic worker when we support them with the gift vouchers. The gift cards also have no banking costs, hence using it will not befall additional costs for the person. A number of wage earners will gain an additional R80 and others R30 per month (Saving on bank costs).
Having a voucher instead of cash is also beneficial. It is sometimes risky for people to go to shops with cash. Chances of getting robbed especially for older domestic workers is real. In this project, the domestic workers will transfer the amount on their digital vouchers onto gift cards. They will then be able to provide the Employer the gift card numbers. The gift cards create an audit trail. If the card is stolen and the robber use it at the till inside a food store, the police can use TV surveillance to catch these robbers. The Food companies can determine at which till and on what date & time the last transaction occurred on the card. It will actually reduce crime on poor people.
The last benefit (most likely the most important one) is the fact that funds earmarked for groceries will not be wasted on items such as drugs. The domestic worker will know that funds send home can only be utilized to pay for groceries/products supplied by retail companies. It often happens that when domestic workers send cash to their family members at home, that these cash is spent on drugs.
The Grocery spending focus points, enable us to target a larger number of “Lower income” people.
We believe that Domestic workers and gardeners will gain about R170 per month. It might seem to be a small amount, but for the poor, it will be a substantial benefit.
The people we target for the project plan (Hospitality & Tourism industry employees) will gain much more. We will share booking fees (approximately an additional R45 million per month) with these people so that they can buy additional groceries without receiving wage increases.
It is important to be impartial towards the different food companies. The Homecare platform enables all the food companies in the country to offer their gift-cards to lower income people... We will not benefit one group above the rest.
It might seem to be a simple software platform we are developing… on the contrary, it is actually the most challenging software structure we as a group has been working on since 2011, when we started software development to support Caretakers of Motor Neuron patients.
The technical challenges are that we work with people who only have access to phones that can receive SMS messages. (There is still a large number of people who do not have smart phones or data phones)
We also develop the software to award points towards the phone users on their grocery spending. The points are then converted into additional vouchers. The challenge furthermore is that the staff have family members in townships that must receive these vouchers. It is not only the employee that will receive the voucher on his/her phone.
We can go into depth regarding all the technical development challenges, but we want to keep it short.
The first difficulty is that Food companies offer different discounts on volume sales.
The current discounts we receive from food companies is as follow:
Pick a Pay
Orders between R0 and R25 000 = No discount
Orders between R25 001 and R50 000 = 2.5% discount
Orders above R50 001 = 5% discount
Shoprite group (Shoprite, Checkers & USave) (Initial offer)
Orders between R0 - R2 500 = 2% discount
Orders between R2 501 – R50 000 = 2.5% discount
Orders above R50 001 = 5% discount
Shoprite group (Shoprite, Checkers & USave) (After Steinhoff challenge)
View latest offer on this link: New discounts
Orders between R0 and R9 999 = No discount
Orders between R10 000 and R99 999 = 2% discount
Orders between R100 000 – R499 999 = 3% discount
Orders between R500 000 – R999 999 = 4% discount
Orders above R1 000 000 = 5% discount
Orders between R20 000 – R500 000 = 2.5% discount
Orders between R500 001 – R1 million = 3.75% discount
Orders above R1 000 001 = 5% discount
Orders between R0 – R500 000 = No discount
Orders above R500 001 = 3% discount
The software can build up points per food company group the employee or his/her family support. We can only allocate the points based on the National Order we manage for a specific day. Wage earners are able to place orders from more than one food company. There might be a scenario where we only order vouchers to the value of R980 000 from Shoprite group on a specific date. The software then needs to adjust the point allocations for that specific day.
Important Information about our positioning with Food Companies
The Homecare team receive up to 5% discount on bulk orders. We will obviously manage the process on a weekly basis so that we ensure we reach such targets. We have to convey 4% towards low income people. Note that at present, we can only receive 3% discount from Spar. (The reason for this is that we didn’t had our National Head Office meeting with the Pinetown Spar team yet.)
We use discounts that food companies offer to organizations such as FNB, Pretorium Trust etcetera for bulk business. Pretorium Trust and FNB caters for High LSM People. Our project caters for the poor.
The reality is that we will be the Food supplying company’s best business partner. We do not take the 5% discount out of the income structure of the food companies… Pretorium Trust for example, might give their members at the end of the year a 5% cash kick-back on their grocery spending. Pretorium Trust basically make their money by collecting payments from their member base, pay the food supplying companies a month later, and keep the 5% in their investment accounts where they earn interest on a large amount of funds during the year.
The problem is that the Pretorium Trust member can use their 5% kick-back on any expense at the end of the year…. Pay for fuel, holiday accommodation etcetera.
The Homecare Software do not take cash out of the equation. We receive 5% discount and we immediately transfer 4% discount to the wage earner which he/she immediately use to purchase additional products from the specific food company.
The Nett effect is that the Food Company then give the Homecare team only 1% of funds we generated, which we re-invest into food vouchers as well… It will only be a tiny amount that we will use for expenses such as salaries and office space.
If you furthermore take into consideration that food companies pay up to 2.5% on card fees when people purchase groceries with their credit and debit cards towards banks, just to get the funds into their accounts, then our support where we EFT funds into their bank accounts which result in no costs to the food companies for payments, make us their best business partners.
A huge benefit for the food company is that the company receive funds into their accounts up to 4 weeks prior to the product being sold. There are companies that will only pay their staff once a month, and vouchers are therefore paid for in advance.
The largest benefit in our opinion is the fact that the Homecare team will bring in a large portion of the R2.7 Billion that is lost to accommodation booking companies abroad. We honestly believe that it will be easy to secure 60% of these funds. R1.64 Billion will be invested into groceries that we use for staff, patients etcetera. We actually implement action plans to secure more income for the food companies. This will only be the funds we manage. If we successfully grow the tourism sector, then small businesses increase income, which is also a huge benefit for food companies.
Our strategy is to fist complete the testing of the Grocery Support Platform before we embark on our meeting with SPAR national head office. The information we discuss on this website is confidential… There is no food company that is fully aware of our plan to re-invest funds back into their grocery structure.
We only completed our negotiations and we tested the initial structures based on offers we received from food companies. We must remain IMPARTIAL and we will always allow the public to choose their own food suppliers.
Spar might change their offer to also be competitive with the other groups once they have seen how the Homecare team, in partnership with companies work towards a better South Africa. They will also help the poor better, especially if they understand that they help the public directly and they benefit on huge cost savings.
The Grocery Support Software will be used by thousands, most likely millions in South Africa. The Homecare Board plan our financial support on a small group of South Africans. Note that we will interact with thousands of employers (people supporting their domestic workers and gardeners). The Homecare team does not necessarily plan for any financial contributions out of these residents. We plan our financial income out of the domestic workers working for the public.
The Homecare business plan which include the Enjoy Life phone app and the Grocery Support software platform is based on interaction with 950 000 South Africans. We need to be very "Conservative" in our business plans. (We do not build our business plan on interaction with millions.)
Our business plan includes 750 000 people who qualify for Child Care Dependency Grants from SASSA. (The combined household income in our project plan allows these people to collect social grants.) The 750 000 will be a combination between Hospitality employees and people working in other sectors. It will even include the people who are not economically active in the labour sector. The Enjoy Life app is however programmed to support the High-Income people with support services that will help them to "Enjoy Life".
Note that we calculate Avg Grocery Spending per family on a low amount of R2 200 per month. We do not use large amounts in our business plan. Most wage earners also need to buy pre-paid electricity and these costs is also included in our "Grocery budget". Our research amongst wage earners in the Western Cape revealed that families (4 people in household) pay up to R400 per month for electricity. We work on R1 800 to be used for groceries and clothes. 4 Persons in one household struggle to live on such a low budget!
We will raise R14,1 million per month if we only support the 750 000 Low-income people via the Grocery Support software platform. These fees will be generated mainly out of the Hospitality and tourism industry. It is also funds that we will generate without relying on the growth of the tourism industry. Accommodation companies already pay their staff salaries/wages. These staff will start the project with a 4% growth in grocery income, and will within months gain additional groceries via the software that share booking fees amongst staff. The Hospitality industry staff will gain far larger amounts than our estimated R170 per month that a household where both parents are minimum wagers will gain. We forecast that a cleaner in a hotel will gain abut R500 additional groceries via the software structure we develop.
We know that our Grocery Support targets can grow enormously if we support people across numerous industries. This will result in more funds that we can share with bedridden patients and Child Protection branches..