South African retail king’s interesting views about Pick n Pay
Former Shoprite chief executive Whitey Basson said Pick n Pay is doing better than many people expect despite making mistakes in the past.
Basson shared his view about his former retail competitor during an interview with Mia Spies at the Toyota Stellenbosch Woordfees.
Pick n Pay experienced a challenging time for many years and lost significant market share against Shoprite since 2008.
The situation reached critical levels after Pick n Pay became technically insolvent, and Sean Summers was asked to return as chief executive to fix the retailer.
Summers launched a successful capital raise through a rights offer and listing Boxer to strengthen Pick n Pay’s balance sheet.
These interventions, along with Summer’s leadership, have helped Pick n Pay slowly improve its financial situation and operational challenges.
When Basson was asked why Pick n Pay was struggling nowadays, he said the company was doing better than many people think.
“Pick n Pay is not struggling that much. Many things they set out to do, they achieved, and they are doing fine,” he said.
However, Basson highlighted that Pick n Pay had significantly fallen behind Shoprite caused by social issues.
He explained that Pick n Pay founder, Raymond Ackerman, who was the driving force behind the company’s success, started to step back as he got older.
As Pick n Pay was essentially a family business, it was difficult for talented employees to make it to the top.
Another problem was that Pick n Pay focused on things which were not linked to the health of the business, like global warming.
“There was so much emphasis at Pick n Pay about non-business-related issues that it caused problems,” Basson said.
“For example, when there was a problem with the tomatoes in stores, it took a back seat to superficial issues like global warming. This is where they went wrong.”
However, despite the challenges Pick n Pay faced for 15 years, the company still has excellent assets.
“These assets include great stores and locations, better than Shoprite, and can be turned around easily,” he said.
He added that Pick n Pay is now doing relatively well and will continue to do better than they did over the last decade.
Basson revealed that during Pick n Pay’s struggles, he was approached by the banks to take a stake in the company and fix it.
However, he declined. “I still have many friends in Shoprite and do not want to be seen as their competitor,” he said.
“I was not willing to create a strategy for Pick n Pay, which I know the guys at Shoprite will struggle to compete against.”
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