Pick n Pay to face off with Shoprite
|Published
Customers at Pick n Pay in Carlton centre in Johannesburg. Photo: Leon Nicholas. Customers at Pick n Pay in Carlton centre in Johannesburg. Photo: Leon Nicholas.
Recognising the strong buying power of emerging markets in Durban’s outer lying suburbs, Pick n Pay has acquired a property in Chatsworth which will see it go head-to-head with competitor Shoprite’s store on the opposite side of the road.
It has taken Pick n Pay longer to gain entry into such markets, but analysts believed it would catch up.
In its interim results last October, the retailer announced ambitious plans to open 225 stores within 18 months, but had only opened two stores so far due to builders’ holidays.
It was likely to start a construction and property development programme this month.
Absa Investment equity analyst Chris Gilmour said although it might have taken Pick n Pay longer to realise the potential in the middle to low-income earner markets, “the retailer is sure moving quickly and was catching up with its competitors”.
“Their main focus, back in the 1960s, was to open stores to what previously had been regarded as affluent urban areas,” Gilmour said.
However, over the years this mindset had changed, Gilmour said, especially with Pick n Pay buying the Boxer and Score supermarket businesses. “These two chain stores are in low-income areas and it is clear that Pick n Pay wanted to get into this kind of market and was gradually doing so.”
Pick n Pay had previously said all sites mentioned as part of the store expansion programme had already been secured. It would open 119 Pick n Pay supermarkets and the rest would be Boxer supermarkets, small-format and express stores. Pick n Pay has invested about R180 million in the total development project at Chatsworth. The development, which is in the format of a shopping centre, will include other shops and ATMs and will be formally opened on April 25.
Pick n Pay store and development director Izak Joubert said: “Founder of Pick n Pay, Raymond Ackerman, has said that over the years numerous attempts were made to secure a suitable site for development, and we are very pleased that this has now come to fruition.”
Gilmour said all other retailers were struggling to secure prime locations for their stores.
Like most of its new retail outlets, this store will have its bakery and fresh produce at the entrance. At a size of 5 635m2, the supermarket will have 30 percent of its groceries as fresh produce. The store will also use green technology with its skylight roof accompanied by a lighting control system to save energy.
The Chatsworth store would also have a spice bar and different delis in order to cater for the different markets in the area. Close to 200 new jobs would be created with about 70 percent of the staff sourced from nearby communities.
Joubert said: “Pick n Pay constantly looks at store design and maximising new technology in order to ensure that new buildings are up to date with the most advanced technology possible, especially when it comes to sustainability.”
Pick n Pay Stores fell 0.6 percent to close at R41.75.