27-05-2025
After the Bell: Pick n Pay and the great recovery
One of the big factors that will draw customers to a supermarket is the prices on offer. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price. Some of the numbers are brutal for Pick n Pay.
I wonder if you and your family had a particular supermarket chain that you almost grew up with? A place that seemed the natural place to shop?
As a child growing up in the 1980s and then becoming more independent in the 1990s, it was obvious: Pick n Pay was the place to go. When I first looked for a place to rent in Joburg on my own in my mid-twenties (having previously lived in house-shares in London), I saw it as a sign that one place was near Killarney Mall.
It had a Pick n Pay as an anchor tenant and I remember feeling almost nostalgic when I went into the store for my first big shop. I must have spent hours of my life there (and even more getting out of what was, at the time, Joburg's Worst Designed Parking Lot. A title now owned by Victory Park).
Woolworths was still growing and, being in my twenties, was a place my parents went to and not me.
It was with a shock a few months ago that I realised my children have hardly ever been into a Pick n Pay store. They have grown up in the era of Checkers. And it happened without me really paying much attention.
Checkers Sixty60
There is a massive Checkers near where we live now, and we went to it several times, but what really sealed the deal of course was the Checkers Sixty60 delivery service. During the pandemic, we came to rely on it.
By the way, much of the backroom work on that service was not done by Checkers at all. It was bought — I hope for a large amount — from Zulzi. And its founder Donald Valoyi has the most amazing story to tell about how he went from running a delivery service to students from two rooms in Fourways to creating Zulzi and then Checkers Sixty60 (in my interview with him several months ago, he did not want to say much about his contract with Checkers).
In the meantime, Pick n Pay simply declined, and there seemed to be no reason to go back.
Sean Summers does appear to be changing that. Yesterday, the group announced that it had reduced its losses from R1.4-billion in the previous financial year to R237-million now.
That's still a loss though, and there is a lot more work to be done.
One of the big (and obvious) factors that will bring customers to a supermarket is price. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price.
Some of the numbers are brutal for Pick n Pay.
For Shoprite Holdings, internal selling price inflation averaged just 1.9% for the six months to the end of December last year.
That's tiny. Even in these difficult times, you might hardly notice the price of food going up by under 2% in a six-month period.
Now one of the reasons a group like Shoprite can do that is because it has built up so much momentum it is able to put pressure on the suppliers that want access to its market.
But its systems are also working, and working well. And it seems down to how workers at Checkers feel about their jobs.
At my local Checkers, I was putting some (wine) bottles into a trolley recently when a worker dashed over with a box. Before I could even greet them properly, they were packing the box. It was just a good example of how invested this person has become in the Checkers story.
Competing on price
For Summers, he has to deliver a turnaround for Pick n Pay while also competing on price. And that is going to be a really tough task.
Interestingly, he is now 72. And yet he is clearly relishing the challenge.
I'm sure it is the private dream of many of us that, as you start to mature in years, some company somewhere urgently needs you. It must give him a tremendous sense of purpose.
I think, and I hope, that at the end of it, despite my family's current reliance on Checkers (yes … and Woolies), that he succeeds.
If he does, the book of how he did it, of how a big company like Pick n Pay was able to recover in a really tough competitive and trading environment, might be really important.
