Former Statistician-General Pali Lehohla was speaking at the National African Federated Chamber of Commerce and Industry’s (Nafcoc) 60th anniversary event in Durban.
Image: Doctor Ngcobo/Independent Newspapers
Organised black businesses must urgently consider acquiring the struggling retail giant Pick n Pay and redefine the landscape of retail ownership in South Africa, former Statistician-General Pali Lehohla said on Thursday.
Pick n Pay, a leading South African retailer, is currently facing significant challenges, including financial losses, store closures, and a portfolio review.
In 2024, the company reported a loss exceeding R3 billion, the first annual loss in 57 years, attributable to factors such as store writedowns and declining sales volumes.
As part of its turnaround plan, the retailer is closing 32 supermarkets, phasing out the QualiSave brand, and transitioning underperforming stores to the Boxer brand.
Lehohla was speaking at the National African Federated Chamber of Commerce and Industry’s (Nafcoc) 60th anniversary event in Durban.
Nafcoc is a representative organisation for black business owners in South Africa with more than 2 million members and associates, spanning nearly all sectors of the economy, including mining, energy, transport, agriculture, retail, and tourism.
Lehohla emphasised that it was incomprehensible that black South African households, who collectively possess an estimated annual spending power of R3.6 trillion, remained mere consumers without ownership stakes in major retail players.
"The average annual household consumption expenditure in South Africa is approximately R143 691. This reflects a skewed financial focus that shapes the country’s household economy. If nothing changes, this power will be trapped in perpetual poverty for generations," he said.
Lehohla further highlighted the robust spending power of South Africa’s black middle class, which amounts to R400 billion per year.
“There are about 3.4 million black middle-class individuals in South Africa with this significant spending capacity.”
The Pick n Pay Group is currently making “encouraging progress” on its turnaround, including a forecast 50% full-year decline in trading losses from its core Pick n Pay Supermarkets segment, and the worst of the group losses were behind it.
South Africa’s second biggest grocery chain’s loss for the 26 weeks to August 25, 2024, widened 44.8% to R827.4 million and the headline loss per share weakened further by 16.3% to 136.60 cents, down from 117.48 cents. Group turnover was higher by only 3.7% to R56.1bn.
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