There was no substance to reports that British retail giant Tesco was talking to Pick n Pay about a possible transaction, Pick n Pay chairman Gareth Ackerman told Business Report on Friday.
Ackerman was speaking after the group’s annual general meeting, which was again a lengthy affair involving considerable input from the company’s shareholders.
In the wake of the Walmart transaction with Massmart, “all the global retailers are coming to South Africa to see what’s happening”, Ackerman said. He noted that Tesco had visited Pick n Pay and met with some executives but stressed there was no substance to reports about a possible transaction between the two groups.
During the meeting, chief executive Nick Badminton acknowledged that the arrival of Walmart in the country (through its acquisition of Massmart) represented a major challenge for Pick n Pay and said it was why Pick n Pay management had accelerated its transformation process. Badminton said Pick n Pay was going through a learning process with regard to distribution systems and said that he realised Walmart had a world-class distribution system.
“But we are learning fast.”
Shareholder Michael Florence referred to Walmart’s undertaking that it would invest R100 million in local suppliers over three years and asked what if any investment Pick n Pay had made in its suppliers. Walmart’s undertaking has become a condition of the Competition Tribunal’s approval of the Massmart deal.
Suzanne Ackerman-Berman, who heads Pick n Pay’s corporate affairs and social responsibility, said the Pick n Pay Foundation had funded socially responsible projects for 30 years and invested tens of millions of rands developing local suppliers in just the past few years. “R100m is not much in terms of what Walmart is investing,” she remarked.
She added that an important part of the foundation’s work was the development of small entrepreneurs as suppliers.
The meeting also heard that Pick n Pay had saved R30m on travel during financial 2011 as a result of a decision to increase the use of video-conferencing for executive meetings.
One of the few tense moments in an otherwise engaging meeting followed activist shareholder Theo Botha’s question relating to Pick n Pay Stores paying expenses relating to its holding company, Pick n Pay Holdings.
Botha suggested that this was a contravention of the Income Tax Act.
Ackerman responded that the situation Botha referred to had subsequently been changed, that the amounts involved were not material and that the issue was closed. - Business Report