The Pick n Pay Group today launched a comprehensive new strategic plan, which Group CEO Pieter Boone described as the “biggest and most important change in Pick n Pay for many years”.
The goal of the four-year plan is to deliver Group turnover growth at a compound annual rate of 10% – resulting in market share growth for the Group of at least 3%. The Group has also pledged through the plan to increase its profit before tax (PBT) margin to above 3.0% by FY26.
The five key elements of the new strategic plan are:
A new customer value proposition (CVP) for Pick n Pay
After almost a year in customer research, with over 7,000 customer interviews, the Group will be “redefining its relationship with the Pick n Pay customer”. Pick n Pay will be organised into two customer-facing brands, each designed around specific customer needs. The new CVP is currently in a testing phase, but the core elements are:
- Pick n Pay “Project Red” stores will be organised to deliver low prices and great quality. They will have a range of around 8,000 SKUs, with an emphasis on essentials, a strong fresh offer, and excellent service
- Pick n Pay stores will offer a depth of range, and an emphasis on quality, innovation and freshness. These stores will have a range of around 18,000 SKUs, giving customers great value, linked to best quality. They will cater to customer aspirations, including through a fully-integrated omnichannel offer
These two Pick n Pay brands, together with the Group’s Boxer business, will cover the market in a way that meets specific customer needs, and will appeal to the entire South African customer demographic.
Accelerating Boxer Growth
Boxer is already the leading limited-range discounter in Africa, offering price-conscious customers high-quality products at fantastic everyday prices.
The Group plans to double Boxer’s turnover by FY26 through a combination of new store openings (200 over the next three years), and consistent like-for-like growth in existing stores.
This is great news for customers across the country who are seeking exceptional value, and great news for the growth of our Group.
Achieving Omnichannel and Digital Leadership
Pick n Pay has concluded a commercial services agreement with the Takealot Group which will see the launch of a dedicated Pick n Pay on-demand food, grocery, and liquor offer on the Mr D app, which currently enjoys over 2.5 million active customers. The service will launch in August 2022, and will be available nationwide by the end of the current financial year.
The Group sees this new offer as a decisive initiative in its plan to grow significantly in the fast-growing online food and grocery market. The new offer will benefit from Pick n Pay’s expertise in food and grocery, and its nationwide store network. Takealot will bring its industry-leading technology, and unrivalled delivery network. Pick n Pay’s market-leading Smart Shopper loyalty programme will be integrated into the offer, with customers able to earn points when shopping for Pick n Pay groceries on the Mr D app.
Project Future Phase 2
Project Future is the Group’s modernisation and efficiency plan, with savings directed into giving customers lower prices and better value. Phase 1 of the plan delivered R1 billion in savings over two years.
Project Future Phase 2 will reduce costs by a further R3 billion over the next three years. The Group is confident that substantial efficiencies can be achieved in areas including store productivity, supply chain and working capital, commercial buying, goods not for resale, modernisation of support offices, and a more sustainable and efficient store state.
Winning through People
Key to the overall plan is a goal to build a future-fit, high-performance team, delivering consistently every day for customers. The Group has an intensive people plan in place to achieve this, including new initiatives on talent planning, recruitment and retention, training, mentoring, and development, effective hybrid working, and innovative staff engagement. Greater diversity is also a priority, building on momentum achieved in recent years.
Commenting on the Strategic Plan, Group CEO Pieter Boone said that the goal was to unlock the full potential of the Pick n Pay Group.
“I have been CEO of this great company for just over a year. Day after day, I have become more convinced about the potential of this business. With my team, we took time to face the unvarnished truth about our market and our business. We know what extraordinary strengths we have, but are also very clear on the things we need to change.
“Our colleagues, our national network of stores, our community of loyal franchise partners, are amazing assets, as is the strength of our brand. But we can do much more, and the exciting plan we have built will enable us to accelerate the momentum we have built over the past year.
“I am hugely excited by each element of the plan. Through our new customer value proposition for Pick n Pay, we will give customers a more tailored and personal experience, better prices, and more exciting stores. Boxer is already a phenomenal business, and our pledge to open 200 new stores will be great news for customers in search of the best value in the market. Our commercial agreement with the Takealot Group will transform the market for on-demand grocery, with over 2.5 million customers on the Mr D app benefiting from a dedicated Pick n Pay food and grocery offer, and Takealot’s unrivalled delivery network. Project Future is improving our business day by day by making it leaner, more productive, and more modern – with the savings pledged towards even better prices for customers.
“It is a comprehensive and balanced plan, and a significant new chapter in the Group’s history.
“In taking the plan forward, I have full confidence in my team, which is significantly different from the past, has spent a lot of time building the plan with me, and is fully aligned on our priorities. I can tell you they all have the will and the skill to take the Group to its full potential.”