Pick n Pay opens second store in Mauritius

The company opened its first Mauritian store in Bagatelle's Mall of Mauritius at the end of September and said one more store opening in the country was on the cards for 2012.

"We are set to continue along this expansion path in a planned and deliberate way," Pick n Pay's head of group enterprises, Dallas Langman said.

Pick n Pay's expansion into Africa has been made easier with the establishment of a centralised distribution system.

The company was the last of the country's big grocers to roll out centralised distribution when it opened an expanded warehouse in Longmeadow in July.

Pick n Pay's strategy into Africa has mainly been through partnering with locals and the franchise route where local experts own the franchise in their own communities.

However, there are instances such as with stores in Zambia, where the company will develop corporate-owned stores.

The Mauritian stores will be run by franchisees who are familiar with the Mauritian market, providing Pick n Pay with further significant insight into this market, it said.

Mauritius has, in three decades, transformed from a mono-crop sugar dominated economy, to a services-orientated one, with a growth rate of 3% per annum.

According to the World Economic Forum's latest Global Competitiveness report the country was one of two sub-Saharan African economies in the top half of the Global Competiveness Index rankings.

Located off the southeast coast of the African continent, Mauritius is ranked 54th on the index this year, up one place since 2010, and is the second-highest ranked country in the region after SA.

"The country benefits from strong and transparent public institutions, with clear property rights, strong judicial independence, and an efficient government," the report noted.

Pick n Pay's expansion into Mauritius follows its first store opening in Mozambique in June and its second store opening in Zambia in March.

"We have received official notification from the Indigenisation Board of Zimbabwe that the purchase of a further 24% of the Zimbabwean operation TM Supermarkets, has been granted," Langman said.

He added that the company had expressed a strong interest in the new Mall of Zimbabwe and that its investment would be via TM Supermarkets.

"It will be a Pick n Pay-branded store but our investment is still via TM Supermarkets," Langman noted.

Earlier this month, Pick n Pay reported that headline earnings per share had plummeted to 54.7 cents for the six months to end-August, from 90.17 cents in 2010, on the back of start-up costs for its Smart Shopper loyalty programme and investment in its centralised distribution system - initiatives taken up by the group as part of its turnaround strategy in the face of increased competition.

Over the next six months, Pick n Pay aims to open five more stores in Africa - among SA's big retailers, the Cape Town-based company has the smallest portfolio outside SA, while rival Shoprite (SHP) has the largest.