Celebrating people
Over the past four decades, South AfricaÔÇÖs number one retailer has worked hard to uplift local communities and develop its own people. More recently, it has also implemented a major re-branding across its stores, as Becky Done finds out from Pick n Pay CEO Nick Badminton.
Grocery chain Pick n Pay started back in 1967 when founder Raymond Ackerman, now the companyÔÇÖs chairman, bought four stores from a local businessman in Cape Town. Today, Pick n Pay is South AfricaÔÇÖs number one retailer, comprising 20 hypermarkets, 162 supermarkets and 127 Family Franchise stores, with an annual turnover of R45 billion (Ôé¼4 billion).
The company also owns Score stores, which it is now undertaking to convert to the Pick n Pay brand and specifically, to its Family Franchise store format, where a local community member is owner-manager of the store. Prior to the conversions, the Score stores had been making a loss for around five years; now, turnover for that arm of the business has doubled. The company is currently approaching its fortieth such conversion, and aims to complete the project within the next two years.
Franchising for Pick n Pay, which began with just six stores in 1994, is about far more than selling a business format, explains CEO Nick Badminton, who has worked his way up the company since he joined as a trainee store manager, aged eighteen. Franchised stores are all about giving back to the many communities in which Pick n Pay operates.
ÔÇ£About three years ago we looked into the make-up of our franchisees and less than five per cent were from previously disadvantaged backgrounds,ÔÇØ explains Badminton. ÔÇ£So we decided to convert as many of the Score stores as we could into black-owned franchises.ÔÇØ Thus the companyÔÇÖs university-linked Franchising Academy was born, which began recruiting black applicants to attend a two-year course preparing them for the role of franchisee.
In total, almost 200 franchisees now own a share in a Pick n Pay Family Franchise store, some of which are new, some of which are ex-Pick n Pay corporate stores, and some of which are Score stores converted into Pick n Pay franchises. The Franchising Academy works to promote growth within rural or disadvantaged communities, with funding coming from banks and partnerships being set up between established franchisees.
The conversion of Score stores to Pick n Pay has also facilitated sensitive brand extension into the more underdeveloped areas of South Africa, such as Soweto, Johannesburg. ÔÇ£The Pick n Pay brand wasnÔÇÖt yet in Soweto,ÔÇØ explains Badminton. ÔÇ£But we did have six or seven Score stores there, so we decided we would convert these to one hypermarket and the rest of them to the franchise format. This was our way of putting back into the community and letting black people own Pick n Pay. It was our gift really, back to that community.ÔÇØ
The response to the franchise programme has been extremely positive. ÔÇ£ItÔÇÖs been amazing actually,ÔÇØ says Badminton, ÔÇ£especially if thereÔÇÖs previously been a corporate-owned store in some of these areas.ÔÇØ
When a franchisee is ready to open their store, they typically invite the community to an opening ceremony. ÔÇ£We do a marketing campaign beforehand, and then the black franchisees go all out to ensure they engage with the community, so that everybody knows the franchisee is the owner of the store,ÔÇØ explains Badminton. ÔÇ£And what happens is, you get this emotional connection to the brand. WeÔÇÖve had some incredible openings where you see the connection of all the elders of the community coming into the cocktail party, very proud of the franchisee who now owns the store and very proud of the brand.ÔÇØ
It is something that Badminton believes cannot be achieved in the same way with a corporate-owned store, where store managers might come and go, sometimes up to several times per year. ÔÇ£These franchisees are there for the long-haul. TheyÔÇÖre owners, for anything up to ten or fifteen years. ItÔÇÖs been one of the best things that weÔÇÖve done in the company,ÔÇØ he enthuses. ÔÇ£ItÔÇÖs helped us understand our customers better. They do get a better service, because for the franchisees, thereÔÇÖs something different about having their own business. ThereÔÇÖs no doubt that it depicts the brand better.ÔÇØ
But itÔÇÖs not just through franchises that Pick n Pay gives back to South African communities. It also donates seven per cent of its after-tax profits to community development programmes, is partnered up with many charities and sponsors numerous community and sporting events, such as the annual Pick n Pay Argus Cycle Tour and the Knysna Festival. Money generated from the Cycle Tour is distributed among community organisations and initiatives such as schools, children's homes and skills development programmes. Funds raised can total several million rand each year. ÔÇ£ThatÔÇÖs the reason we sponsor the race,ÔÇØ says Badminton. ÔÇ£We will only do things where we are able to put back into the community.ÔÇØ
For a company focused around people, training is understandably core to Pick n Pay, and at the forefront of its strategy going forward, with a particular emphasis on shop floor training. ÔÇ£Every single member of staff who comes into our business will be trained to the extent that they can flourish. We want to celebrate the growth of people within the company.ÔÇØ The company has already provided thousands of its employees with training in basic skills such as reading and writing, as well as accredited training in specific retail skills that leads to a diploma. ÔÇ£The next thing for us to do is to put even more effort into the shop floor training,ÔÇØ says Badminton.
More specific training, which Badminton says will have a greater ÔÇ£Pick n Pay effectÔÇØ on the shop floor, will also fit in with the Pick n Pay re-branding, a process which started in 2006 and to which the company has committed funds of around R110 million, including capital expenditure. Always a bold move for any well-known brand, the new look has been well-received by Pick n PayÔÇÖs customer base, says Badminton. ÔÇ£When you hear what our customers have to say on what weÔÇÖve achieved and what they like about the new brand, I would estimate that less than five per cent didnÔÇÖt like the change.ÔÇØ
With the external re-brand well underway, ÔÇ£now we start on the internal work, which is how we behave as a brand,ÔÇØ says Badminton. ÔÇ£This isnÔÇÖt just about putting a new logo on the front door; the real work starts now, in focusing on how we get people who love the brand inside the company to help grow it.ÔÇØ
And there is clearly no shortage of people inside the business who love the Pick n Pay brand. A company-wide passion for equality and fairness inspires loyalty from its employees; and having climbed each rung of the organisation, Badminton is clearly not immune to that sort of inspiration himself. ÔÇ£This year IÔÇÖll have been at Pick and Pay thirty years,ÔÇØ he says. ÔÇ£I couldnÔÇÖt ever imagine moving jobs and working for someone else. I couldnÔÇÖt do it. If you leave Pick n Pay, you leave to retire, or to do something completely different. IÔÇÖve been CEO for just over two years and I must say, it comes with its challenges but I feel privileged to be here. I really do.ÔÇØ
