{"id":610722,"date":"2022-07-26T13:57:31","date_gmt":"2022-07-26T11:57:31","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=610722"},"modified":"2022-07-26T13:57:31","modified_gmt":"2022-07-26T11:57:31","slug":"big-changes-at-pick-n-pay-and-its-already-seeing-results","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/610722\/big-changes-at-pick-n-pay-and-its-already-seeing-results\/","title":{"rendered":"Big changes at Pick n Pay – and it’s already seeing results"},"content":{"rendered":"

Retail group Pick n Pay says that it has successfully converted six of its stores to the new ‘Project Red’ format, with plans to accelerate the rollout over the next year.<\/p>\n

In a strategy presentation to investors in May, Pick n Pay announced that it would be splitting its operations into three distinct brands to operate across different market segments – less affluent, middle market, and more affluent.<\/p>\n

Under the ‘Ekuseni customer value proposition (CVP)’, the standard Pick n Pay brand will be shifted to the more affluent market, while the group’s Boxer stores will keep its position in the less affluent market.<\/p>\n

The new brand, codenamed “Project Red”, would be launched to compete in the middle market, it said.<\/p>\n

And in an operational update for the 52 weeks to 3 July 2022, the retailer said it has already upgraded six stores to the new Project Red format, noting that it has seen “exceptionally encouraging initial results”.<\/p>\n

“Weekly sales of the initial five pilot CVP stores – whose longer sales history provides a more accurate underlying read – grew by 18% on average since launch. This excludes the first 3 weeks of trading post the upgrades, where sales growth was considerably higher but supported by re-launch promotional activity,” it said.<\/p>\n

“Weekly sales of the initial five pilot CVP stores – whose longer sales history provides a more accurate underlying read – grew by 18% on average since launch. This excludes the first 3 weeks of trading post the upgrades, where sales growth was considerably higher but supported by re-launch promotional activity,” it said.<\/p>\n

The group said that sales growth at these stores was driven by increases in both traffic and basket size, and growth in the identified ‘power categories’ of each format has been particularly pleasing.<\/p>\n

“The Net Promoter Score (NPS) of the upgraded stores has improved by more than 25% on average in the 6 weeks since launch. Ekuseni is targeting 20% growth in the NPS score across Pick n Pay company-owned\u00a0supermarkets over the term of the plan,” it said.<\/p>\n

The group said that the initial upgrades showed that strong results are achievable with limited capital expenditure per store given the right format and execution.<\/p>\n

“This has given us the confidence to accelerate the plan,” it said.<\/p>\n

New format<\/strong><\/p>\n

Project Red stores aim to deliver low prices and great quality, according to the group’s May presentation. They will have a range of around 8,000 stock-keeping units, with an emphasis on essentials, a strong fresh offer, and excellent service.<\/p>\n

The new store brand aims to cover a wider range of items with a focus on fresh produce and products, following a more low-price strategy, elevating essentials aimed at the middle market.<\/p>\n

Product ranges will focus on fruit and vegetables, fresh and frozen meat, cold drinks, and a bakery. The key differential in these stores will be bulk offerings and more floor space given to bulk displays and a strong drive for promotional pricing to remain competitive.<\/p>\n

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