We are confident that in a spirit
of cooperation, our suppliers will be able to exercise
meaningful restraint with respect to food price
inflation. We have been most encouraged by their
response.
Despite the current turmoil in world markets and the
associated tightening of economic conditions, the
results continue to reflect a vigorous and
well-performing company, and I remain resolutely
confident about our future. South Africa has recently
experienced an unsettling political and economic
climate, and it will take steady nerves and reliable
political instincts to see us through the year ahead. If
we are able to adopt an uncompromising approach to
crime, corruption and poor service-delivery, our country
is assured of a prosperous and safe future. I simply
cannot bring myself to believe that a nation conceived
amid the hopes of millions and born in a unique wave
of global goodwill would fail to match those
expectations.
I have been profoundly moved by the rise of
President Obama and see no reason why South Africa
should not, in its own moment of need, produce a similar movement of hope and optimism. I look
forward to a future in which a re-energised
combination of citizens’ hope, politicians’ idealism
and an engaged business sector is able to create the
kind of society we know we deserve and to which we
all aspired in 1994.
At an operational level, we have continued to
invest in the business including the Longmeadow
distribution centre, with phase I now complete.
I have no doubt that this important element of
our centralised distribution strategy will benefit
Pick n Pay and our customers. We are therefore
pressing ahead with the further development of
our supply chain strategy.
I am pleased to report that Franklins, our Australian
operation, has experienced a most satisfactory
improvement and has moved into profitable territory.
We have worked hard on this operation and the
significant turnaround over last year is due to
increased operating efficiencies, double-digit turnover
growth from refurbished stores and the success of
the customer loyalty programme. There is every
indication that this historic milestone establishes
a sound platform for the future profitability and
growth of the Group’s Australian investment.
The conversion of Score stores to Black-owned
Pick n Pay Family franchise stores is going very well
and on track to be completed in the year ahead.
The winding-down of Score has been achieved with
the minimum disruption and consumers’ response to
the conversion has been overwhelmingly positive.
Most gratifyingly, we are succeeding in transferring
almost R1 billion of assets into the hands of new
Black entrepreneurs, and turnover in all the converted
stores has improved beyond projections.
Boxer had another great year, increasing turnover and
profit significantly.
Some two years ago we introduced a new strategy in
terms of which we resolved to maintain and reinforce
our dominance in the LSM 8 – 10 market, through getting our offering and branding right,
and to expand the Pick n Pay footprint in
the LSM 4 – 7 market through our Score
conversion project and a greater focus on
traditional Black areas. At the same time,
the strategy was designed to introduce
greater operating efficiencies (including
centralised distribution) and build world-
class retail capabilities by, among other
measures, developing the skills of our
workforce.
As part of this strategy, we have invested
considerable resources in improving our
operating model, while simultaneously
building a future which is firmly founded
on sustainable business practices and the
advancement of our Corporate Social
Investment priorities.
The implementation of the strategy is now
far down the track and we remain
confident that it will pay handsome
dividends in years to come.
Nick, his team and all who work at
Pick n Pay have put in an incredible amount
of hard work into preparing us for the
future. All credit is due to them and the
loyalty and commitment they consistently
show to the Company.
Raymond Ackerman
Chairman |
