2017 is an important anniversary for Pick n Pay. It was 50 years ago this year that my father bought three small stores in Cape Town, and began to pursue his dream.
That dream was to build a new kind of retail business. One which made the customer the most important person in the relationship. To achieve it, he had to fight. He had to fight high prices, and the entrenched relationships which maintained those high prices. He had to fight for all his staff to be treated equally, so that they could work as a united team to give customers the best service of any retailer in South Africa. He had to fight entrenched attitudes in government and society. He had to fight for change, and came to play a key role in the defining change which plotted the course to the modern South Africa.
Raymond Ackerman’s partnership with South African customers and South African society enabled Pick n Pay to become South Africa’s best-loved food retailer. He has retained that passion to this day.
My father was constantly supported from the beginning by my mother Wendy. I am delighted to say that both my mother and father are with us today. I would like us to acknowledge our debt to their vision, tireless dedication and extraordinary contribution.
Over the past seven years, my role as chairman has been to achieve Pick n Pay’s turnaround by returning the company to its roots as a consumer champion.
The path over this period has not always been easy but our direction has been clear. We are now a more centralised business, a more efficient business, with better service and more innovation.
We have picked up pace and have pursued a clear plan under Richard Brasher’s leadership over the past four years. This is demonstrated in the Result today.
I want to thank everyone in Pick n Pay for their contribution to achieving this result.
We have improved our offer, modernised our stores, centralised our supply chain, and controlled our costs, delivering consistently better returns for shareholders as well as a better shopping trip for customers.
This turnaround is being delivered against an increasingly challenging backdrop. Customers at all levels are struggling in the face of high inflation, rising unemployment, and low income growth.
Political disruption has made the situation even more difficult, creating even further uncertainty at a time when our economy is under considerable strain and unemployment remains stubbornly high. We are really concerned about the impact the recent downgrades may have on inflation. This, with any interest rate increase, would directly affect consumers already struggling to balance household budgets with little if any room to manoeuvre.
Despite an anti-business rhetoric, companies like Pick n Pay are doing everything we can to support consumers and sustain South Africa. We have invested over R5 billion in new and refurbished stores over the past four years. We have created over 10 000 new jobs. This last year alone, we have paid R470 million in company tax, collected R770 million in VAT and paid R810 million in employee-related taxes. This is a considerable contribution to the fiscus.
In difficult times, it is important that business as a whole takes responsibility by setting out what it believes is in the interests of the South African economy. Not in pursuit of narrow advantage for the companies concerned. But in the interests of achieving sustainable growth from which all will benefit – by delivering more investment and more jobs, greater stability in prices, higher spending on health, education and other priorities.
As the chairman of a company which has always welcomed every South African and which has always fought for every person in society, nothing is more abhorrent that the claim that businesses like ours represent only a narrow interest in society.
It is actions rather than words which will defeat the voices of divisiveness. So business must redouble its work in partnership with stakeholders – including government – to achieve the societal goals we are seeking.
That is why as well as chairing Pick n Pay, I am proud to serve as co-chair of the Consumer Goods Council of South Africa. The CGC’s members between us contribute about R500 billion to annual GDP – or over 18 percent of the total. The industry employs more than 2.9 million people, or about 23 percent of total employment in our economy. The sector is ready and willing to partner with government to drive economic growth. This can only be achieved in an environment of mutual trust, respect and transparency. We are also working hard in areas such as public health, responsible advertising, crime prevention, reducing waste and improving consumer protection. Combined with my role as co-chair of the global Consumer Goods Forum, I am determined that South African business should make its contribution to progress at home and internationally.
In difficult times, Pick n Pay can do no better than draw on the strong roots which my father laid down for our company half a century ago.
His determination to put customers at the heart of our business. His determination to fight high prices and bring South African consumers the best prices and best service of any retailer in the country.
Globally, the retail industry is trending towards a lower cost and more efficient operating environment to enable more value for customers and more investment in communities. At a time when struggling consumers are demanding consistently lower prices and better value, there can be no better or more important goal for our company and for society.
I am excited by the progress we are making and by our determination to do more, which Richard will say more about in his presentation.
Our plan is entirely consistent with the founding values of our company.
Read also: Pick n Pay cuts prices of 1 300 food items
Consumer sovereignty demands that we help customers more in tough times. We have sought to do so over the past seven years and are now accelerating our plan.
By becoming more efficient we create the headroom to lower our prices, deliver better value and help the communities we serve. We have become more efficient. But there is more to do and I am excited by our plans.
At the heart of our company is the maxim that doing good is good business. There is no more important time for us to demonstrate this.
In its 50th year, Pick n Pay is in good heart and has strong energy for the future. The customer is our cause and we are setting about it with determination.
BUSINESS REPORT ONLINE