The Pick n Pay Group developed its strategic turnaround plan in 2014. Its objective is to restore the business to a position of long-term sustainable growth. In promulgating the plan, the Group explained that a sustainable recovery would need to be achieved in a planned, considered and balanced way over a number of years, avoiding short-term actions which might weaken the business in the longer term.
The strategic focus of the business is to:
- Grow sales in line with or ahead of the market by providing great value, service and innovation for customers: Focus here is on delivering a first-class fresh, convenience and grocery offer, which gives customers unbeatable prices, value and service. The business is also developing a strong multiplatform and multi-channel retail offer, including standalone clothing and liquor stores and a burgeoning online business. In addition, the Group aims to continue to build its Boxer business into a thriving national limited-range discount format, and to continue to grow sales outside South Africa in a planned and prudent way.
- Achieve high levels of operating efficiency and lower costs to enable maximum reinvestment in the customer offer Focus here is on completing the centralisation of the Group’s supply chain and other services, reducing the cost and improving the accuracy and responsiveness of distribution. The Group also aims to improve the efficiency and cost-effectiveness of its employee costs, both in stores and in its head office structures, while minimising increases in rentals, rates, electricity, water and other charges.
- Restore underlying profit margin to an historically sustainable level: Focus here is on improving the efficiency of the business in all areas, including by completing the centralisation of supply chain operations, increasing productivity in stores and ensuring that support office functions are delivered to benchmark levels of effectiveness and efficiency.
The business devised a strategic long-term recovery plan in 2014, recognising that a return to sustainable long-term growth could not be achieved overnight.
The three stages of our strategic plan
Click or tap on stages below for more information
The end of the 2015 financial year marked the substantial completion of Stage 1 of the turnaround plan. By the end of 2015 the Group had achieved the following:
- Strict control over capital and operating spend
- Improved working capital management
- A clear plan on centralisation
- A leaner and more efficient store operating model
- The closure of unprofitable stores and the commencement of a strong opening and refurbishment programme
- A strengthened senior management team
- Customer innovation, including the introduction of the Brand Match programme
Stage 2 is organised around seven business acceleration pillars. These pillars represent the seven material growth opportunities that can substantively affect the Group’s ability to create value over the short, medium and long term. The pillars provide the senior management team with clear priorities, objectives and lines of accountability, and all are underpinned by our commitment to doing good in the communities in which we operate.
The key indicators of completion, and a positioning of the business for Stage 3 - sustainable long-term growth are the following:
- A track record of consistent sales and profit growth over a number of years
- An employer of choice that delivers opportunity for all
- A continuing growth strategy
- Collaborative and enduring relations with a strong and diverse supplier base
- Continued innovation in-store and in our customer offer
- An operating model that benchmarks internationally
- Strong customer loyalty and advocacy
- A resource efficient business which is a positive force for good in the countries in which it trades