Volatility of profit margins 

Market conditions and its effect on profitability are continually reviewed by management and the Board. At all times, in an increasingly competitive marketplace, the drive for unit sales growth and cost efficiencies are the primary drivers to protect profit margins. The former is driven by a focus of striving for high levels of customer satisfaction. 

Going concern 

The going concern of the Group is reviewed by the Board at least twice a year and includes a review of adequate levels of capital to continue operations and implement strategy. 

Liquidity and credit risk 

Pick n Pay’s statement of financial position is characterised by high levels of liquidity and a low debt ratio, supported by high levels of cash generation. Increasing credit risk as a result of an expanding franchise division is closely monitored and where appropriate remedial action taken. The Group’s working capital liquidity is supported by committed banking facilities.  

Product quality and third party liability 

Merchandise is purchased from reputable suppliers. Product safety and quality is carefully scrutinised by our internal quality control and food safety technicians. Where any indications exist of a product flaw, the product is immediately uplifted and returned to the supplier. Appropriate levels of insurance are in place. 

Safeguarding of assets 

Group assets are insured against loss and business continuity plans are in place. All stores and distribution centres have surveillance cameras in place which are monitored to ensure the safe keeping of assets. 

Supply chain 

Pick n Pay places much emphasis on forging good relationships with suppliers to ensure that the partnership is mutually beneficial to both parties. Electronic Data Interchange (EDI) is in process to improve delivery and communication levels between Pick n Pay and suppliers. Central distribution is in place and has improved lead times and ensuring that out of stocks are minimised.  

Compliance with legislation 

Pick n Pay has an in-house compliance officer to monitor and assess the impact of legislation on the business. This department makes use of external specialists and advice where necessary. Each business unit has a risk and compliance manager whose responsibility is to ensure compliance with current and impending legislation.  

Sustainable food supply 

The Group is well aware of the effects of climate change on food supply and supports initiatives that promote sustainable food supply. Examples of this are our involvement with SASSI and our extensive involvement in farming enterprise development to support small farmers. 

Increased awareness of green issues 

We constantly make our staff aware of the need to conserve energy usage and have instituted various energy saving initiatives such as the use of natural refrigerants over synthetic substances to reduce greenhouse emitting gasses. Our green store, PnP on Nicol, has world-class sustainability features and we are looking to open more stores like this in the future. 

Energy security and utilities pricing 

We are aware of the need to reduce usage of both electricity and fuel in the light of recent price increases and are constantly looking for ways to improve the consumption thereof. To significantly reduce energy usage from one of our largest energy consumers, refrigeration, we are in the process of installing new refrigeration technology.