Retailers score with Pick n Pay

The group said yesterday that stores that had been trading for more than a year under the Pick n Pay brand were growing sales at an average of 34% a year.

“While the conversion process has not been without its challenges, the overall process has been an incredible success,” Pick n Pay franchise director Chris Reed said. “And the footprint of stores will continue to grow into the future.”

The stores could prove to be a thorn in the side of competitor Shoprite, which had penetrated markets such as Soweto long before Pick n Pay.

“It is very impressive,” Absa Asset Management analyst Chris Gilmour said. “A 34% growth in this kind of environment is phenomenal.”

Pick n Pay's emerging market division, which focuses on developing black entrepreneurs for the group's franchise division, has been converting three Score stores a month on average into Pick n Pay Family Franchise stores.

Since inception, two years ago, 52 stores had been converted, and 10 stores were sold to a master franchise holder in Botswana and will be converted to Pick n Pay stores over the next year.

Nineteen stores were converted into Boxer stores, also a subsidiary of Pick n Pay, while 40 stores were sold to third parties and 14 Score stores were closed.

“There is no getting away from it, when you convert from Score to Pick n Pay you will undoubtedly get better sales growth,” Gilmour said. “It takes a bit of time for that to happen, though.”

Pick n Pay said last year the Score conversions had a target of more than R2bn in turnover in that year. But Reed could not confirm if this target was met. “We confirm that the group is pleased with what we were able to achieve, given that the country has been in the grips of a recession,” he said.

The group said it could not comment on turnover yet as it did not do segmental reporting.

Source: Business Day