PICK N PAY AND THE CORONAVIRUS OUTBREAK

Like all other companies, institutions and individuals, Pick n Pay is seeking to navigate its business, customers and colleagues through the Coronavirus outbreak. The safety and well-being of people are our top priorities, and our actions are always guided by the expert advice of bodies such as the World Health Organisation, the South African Department of Health, and the National Institute for Communicable Diseases (NICD).

We wanted to keep you informed about our goals in this crisis, which can be summarised as follows:

  • Protecting the health of our colleagues, customers and partners by maintaining the most rigorous hygiene standards across our stores, offices and supply chain, and supporting the national goal of minimising person-to-person transmission through "social distancing" measures
  • Maintaining the resilience and continuity of our business in the face of significant challenges. We recognise and accept the huge responsibility placed upon us – alongside other national grocery retailers – to maintain national and public confidence in the supply of food and essential goods to consumers through a period of unprecedented disruption, uncertainty and anxiety
  • Upholding our values: ensuring that our business is always responsible, effective, and steadfast in its support for customers, communities and partners during the crisis, and can play a trusted and effective role in the period that will follow the crisis.

We set up a crisis Steering Committee at the beginning of the outbreak. It meets daily. In a fast-moving situation, we are reviewing, updating and supplementing our actions constantly.

Protecting our Customers and Colleagues

We have taken the following key steps:

  • communicating, underlining and reinforcing across our business the imperative that all staff must follow a rigorous and effective personal hygiene regime, in particular washing our hands often with soap and water for at least 20 seconds
  • setting out a clear protocol to be followed to ensure that no colleague should be at work if they have the symptoms of coronavirus (cough and fever), and the steps they must take to isolate and protect themselves in these circumstances
  • strengthening the already rigorous cleaning regime in our stores, including sanitising all till points regularly throughout the day, and sanitising our trolleys frequently
  • enabling and encouraging customers (alongside staff) to sanitise their hands in our stores, by making sanitising wipes and sprays available and visible.

We implemented a number of social distancing measures prior to President Ramaphosa's statement of 23 March 2020, and have reinforced them in light of his declaration of a nationwide lockdown to take effect from midnight on 26 March 2020:

  • the national lockdown does not apply to those involved in the production, distribution and supply of food and basic goods, who have a crucial role to play in ensuring that the nation continues to be supplied with food and groceries. Our store colleagues have a vital role to play in continuing to work throughout the crisis, provided they are fit and well. To protect and support them and our customers, we have introduced a number of social distancing measures – for example ensuring appropriate distances between customers when queuing
  • we have switched many of our essential office staff to working from home, and have implemented stringent social distancing measures in the office, such as reorganising workspaces to ensure distancing, and replacing physical meetings with Zoom
  • we have prohibited all local and international work-related travel, alongside any personal international and non-essential domestic air travel.

Maintaining the Resilience and Continuity of our Business

Awareness of Coronavirus in South Africa, particularly after the first confirmed cases in the country were announced in early March 2020, led to a heavy and sustained demand in our stores for personal hygiene and household cleaning products. This heightened demand extended to other food and household products after the President's declaration of a State of Disaster on 15 March 2020. Demand was further heightened after the President's announcement of a nationwide lockdown on 23 March 2020.

Experience from other countries suggests that we will have to manage several more periods of heavy demand in the coming weeks, particularly around month-end paydays, and following further government announcements on additional measures required to contain the spread of the virus.

We are taking the following steps to maintain the resilience and continuity of our business, in particular the availability of products for our customers:

  • working very closely on a daily basis with our supplier base – which comprises many trusted companies with whom we have built strong relations over many years – to maintain supplies and keep our stores stocked. In the main, our suppliers are reporting that their production and distribution of goods remains resilient. Over 90% of food and essential grocery products sold in our stores are grown or manufactured domestically, which provides confidence in the underlying security of supply
  • communicating regularly to customers about our determination to keep our stores open and our shelves well-stocked – in particular during the nationwide lockdown. We are encouraging customers to resist the temptation to buy more than they need. We have also given an assurance that we would never increase the prices of key products just because they are in particular demand during this Coronavirus outbreak
  • due to the nature of their work, store colleagues are not able to work from home. Over the course of the outbreak, some of them will inevitably need to be away from work to deal with personal and health issues. We will always do our best to maintain staffing and service levels, but will appeal to all our stakeholders to be understanding about this challenge
  • we have introduced temporary limits in some categories on the number of products that customers may buy. We keep these under constant review
  • we are complying fully with the terms of the Consumer and Customer Protection and National Disaster Management Regulations, published on 19 March, which require businesses to develop and implement reasonable measures to ensure the equitable distribution of goods to customers, and to maintain adequate stocks of goods.

Upholding our Values

In line with the pattern in other countries, the Coronavirus outbreak is very likely to intensify in South Africa in the coming weeks. As additional measures to combat the spread of the virus are introduced, conditions are likely to become more challenging.

We embrace the huge responsibility placed on our business to ensure that – whatever the challenges – we keep our stores open and supplied with a sufficient quantity of the food and groceries that people will need. We are also finding new ways to support the vulnerable in society during this crisis, for example by being the first retailer in South Africa to introduce dedicated shopping hours for the elderly to enable them to shop in a quieter atmosphere, with less risk of person-to-person contact than at other times.

It is too early to assess the full impact of the Coronavirus outbreak in this country and beyond, and it is therefore not yet possible to determine the likely implications for our business beyond the immediate term. We believe that the underlying demand for food and other groceries is likely to remain strong, although it may be subject to short-term fluctuations in demand, as we have seen in recent weeks. The challenge is likely to be less about maintaining demand and more about mitigating and overcoming potential disruptions in the way that customers are able to shop in our stores, in our workforce numbers through raised levels of staff absence, and any disruptions in our supply chain.

Rest assured that our contingency planning in each of these areas is robust, and is continually being strengthened as we gain more facts and build on our experience day by day.

Richard Brasher
CEO
Pick n Pay Stores Limited

25 March 2020