Lockdown | Even as an essential service, we won't emerge unscathed, says PnP CEO


Despite being able to operate during the current lockdown, Pick 'n Pay says no business is going to emerge on the other side of the coronavirus pandemic unscathed.

The retail group has been selling food and other essential items since the lockdown began, but the items it cannot sell include some general merchandise, cigarettes and alcohol, while sales of clothing and footwear only resumed recently.

CEO Richard Brasher said these "off-limit" products make up 20% of Pick n Pay's revenue.

'No one got wealthier'

"I think there's sometimes a feeling that because we are essential services, because we are open, that everything we sell is available, but it's not…Also just general reduction of consumers' overall ability to spend is also a feature here. No one actually got wealthier during this crisis," said Brasher.

He said the products that the group could not or still cannot sell, save for tobacco, are margin accretive, meaning they contribute a great deal in increasing Pick n Pay's profits.

"They were quite successful categories. They were higher than average," said Brasher about the contribution of alcohol and tobacco products to Pick n Pay's bottom line.

The additional costs of sanitising its stores and temporary closures of different franchises when staff tested positive for Covid-19 were also eating into Pick n Pay's bottom line, he said.

"It's always a challenge. When the first case is cited [in Pick n Pay stores], there's always a lot of noise and emotions around it. Sadly, more people will get [the virus]," he said.

While this presents an ongoing challenge, Brasher said store managers have become "sleek" at cleaning, sanitising and tracing people who have had contact with the concerned staff member as soon as a positive case is confirmed.

"Clearly it's disruptive. It's disruptive for staff. It's disruptive for customers, but that's the price of it," he said.

Consider the economy

The retail group's chairperson, Gareth Ackerman, said while businesses understand the challenges faced by government now, it needs those in charge to consider the strain put on the economy.

"My plea is in charting the way forward, the government gives due emphasis to the impact on the economy, on livelihoods, on companies that provide jobs and on the tax revenue which funds the work of government," said Ackerman.

Brasher said government has been engaging the business community, more than it ever did before. However, clearer communication would be welcome.

"I have to say business is being engaged. But it's a bit difficult, on occasion, getting super clarity about what you can and can't sell. And when you can and can't do something," he said.

Shopping patterns changing

As SA is now more than six weeks in lockdown, people have stopped panic buying of white rice and toilet rolls – which saw 186% and 82% increase in sales respectively in the weeks preceding the lockdown.

They are now into paints and brushes (288% sales increase), play dough, frozen pizza and non-alcoholic beer, which have all either more doubled in sales volumes since March 27 or are close to doubling.

Pick n Pay has also recorded a 200% increase in customers actively transacting online for home deliveries, as more than 144 000 new customers registered on its app.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot