Until December 2007 the retail group had virtually no presence in South Africa's largest metropolitan area, but that changed in December of that year when entrepreneur Titus Malambo opened the first Pick n Pay Family Franchise store in Bara City.
The Bara store was the first Score store to be converted to a Pick n Pay Family store following the group's announcement in October 2007 that it would convert approximately 70 of its under-performing Score stores to Pick n Pay franchise, creating a new generation of black entrepreneurs in the process and, in many cases, doubling the number of employees in each store and doubling turnover.
Since the inception of the conversion programme, Pick n Pay's Emerging Market division, which focuses on developing and growing black entrepreneurs for the group's Franchise Division, has been converting an average of three Score stores a month into Pick n Pay Family Franchise stores.
In Soweto, since the highly successful launch of the Bara City outlet, three additional Pick n Pay family stores opened in Kliptown, Orange Farm and Protea Glen in 2008 and, to date, all report that business has basically doubled.
This month, two more stores Dobsonville and Protea North opened their doors. Owners Simba Mazhande (Dobsonville) and Lungile Dichabe (Protea North) said while it was early days, they were confident of emulating the success of their colleagues.
Pick n Pay CEO Nick Badminton said that while the focus of the group was on its customer heartland within LSM 8-10, the company's strategy of expanding the company's reach and footprint by bringing the best of Pick n Pay to LSM 4-7 was paying dividends.
"Our figures show that 52% of PnP shoppers and 40% of spend is now from LSM 7 and below, while there has been a significant improvement in loyalty within LSM 4-7.
"Judging from research at our disposal, we can say that our customer base is growing well within this segment. Over the period 2007-8, the number of Pick n Pay shoppers within the LSM 4-7 segment grew from 4.1 million to 4.8 million, an increase of 18%.
Loyalty is also very pleasing; this is illustrated by the fact that within LSM 4-7, 2006 saw 29% of Shoprite's regular customers shopping at Pick n Pay vs 48% in 2008.
In the case of Checkers, 36% of their regular shoppers were shopping at PnP in 2006 and 61% in 2008.
In the case of Spar, 20% of their regular shoppers were shopping at PnP in 2006 versus 51% now."
Badminton says the conversion of the stores into Pick n Pay Family Franchise stores has been a major success story in South African retail, providing not only jobs but establishing a new pool of retailing skills for the future.
A total of 29 are now completed and next year, the company plans to convert a further 25 stores to complete the conversion programme, with the only stores remaining to be converted in the 2011 financial year being a few in Botswana.
The company has converted nine Score stores to Boxer and plans to convert a further four stores to Boxer in F10.
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