Johannesburg - Earlier this year Pick n Pay set out on a partnership with the Gauteng Department of Economic Development (GDED) to help the owner of a small independent grocery shop in Diepkloof regenerate his store and turn it into a thriving neighbourhood convenience store.
According to Pick n Pay, this pilot store demonstrated that a large national retailer can have a positive role to play in townships by working hand-in-hand with spaza shop owners to modernise their independent stores.
On Thursday the GDED and Pick n Pay announced the opening of the second of these stores – Emabheleni. A further three are set for opening before the end of the year.
Emabheleni is run by entrepreneurs Wonder Mbhele and her son Nkululeko.
The Emabheleni Market store started trading in Rockville in the 1930s and for the last 40 years has been run by the Mbhele family. In recent years the trading environment has become more difficult, with an economy under pressure and new entrants competing for the local market.
With the help of some of its suppliers, Pick n Pay has worked with Nkululeko on a total store refurbishment which now boasts new refrigeration and IT systems. The store will have up to 1 200 lines of edible and non-edible groceries, fresh produce and perishables.
In a new development for the conversion model, the store will also include a bottle store and will offer a full value added service range, including money transfers, ticketing, airtime and data, bill payments and the sale of prepaid electricity, giving Nkululeko new sources of revenue.
Customers will benefit from the fact that the store will be linked to the Pick n Pay Smart Shopper loyalty programme so they will be able to earn and redeem Smart Shopper points at the store.
“This opportunity means a lot to my family. We felt we had hit a glass ceiling and the partnership with Pick n Pay was the perfect vehicle to help us break through. Pick n Pay is helping us deliver a value added service to our community and I know the community is just as excited as we are," said Nkululeko.
"Our business is centred on the community and now we’re able to provide and offer services we previously couldn't. We are delighted and very excited. We have also increased our staff from 8 to 12.”
First in the programme
The first in the pilot programme, Solly’s Monageng Market, opened in February and has shown great promise. Solly has benefited from Pick n Pay’s retail know-how, while Pick n Pay has learnt much about trading in this community environment and the unique expectations of customers.
Since the conversion of his store from spaza shop to neighbourhood convenience store, Solly has increased turnover by 200% and has evolved from being a subsistence business to making a profit after salaries have been paid. He employs six people, including his daughter Nelly as store manager.
Solly has also benefited from tailored business mentoring and advice from Pick n Pay franchisee and local entrepreneur Bonnie Sachane. Bonnie owns the Pick n Pay family store in Protea Glen, Soweto, and is a successful entrepreneur in his own right. Bonnie will extend his support to Nkululeko and Wonder too.
Solly has also made an impact on the local community. He has held a supplier day in which local community entrepreneurs presented their products, some of which – like green vegetables, achar and bakery products - he now purchases directly for sale in his store. Emabheleni store intends to do the same.
Pick n Pay Deputy CE Richard van Rensburg said this is a really workable public/private sector partnership on a micro scale between Pick n Pay and the GDED.
"The GDED has been enormously helpful in identifying key entrepreneurs with whom we can partner and the model is working extremely well as a project to help in the revitalisation of townships," said Van Rensburg.
“Our goal is to help independent traders make the very best of their hard work, entrepreneurial spirit, community commitment and convenient location. In assisting them to grow their businesses, we jointly bring the Pick n Pay offer closer to customers and at the same time, we both play a greater role in growing our economy."
Leah Manenzhe, acting CEO of Gauteng Enterprise Propeller, the funding agency for the Department of Economic Development in Gauteng, said the partnership with Pick n Pay is the practical implementation of Gauteng’s township economy revitalisation strategy. It aims to radically change the structure of the Gauteng economy and unlock the potential of different sectors in order to revitalise and rebuild the productive capacity of the township economy.
“The partnership is indicative of the producer-driven value chain philosophy we have adopted which gives us the potential to build relationships and transfer skills between township entrepreneurs and established retailers and can only be growth-enhancing in the long run to township SMMEs," said Manenzhe.
“As the provincial government, we plan to open a total of five similar shops across the province through this partnership in the 2016/17 financial year. We call on all private sector industries to support this township economic revitalisation programme.”