Customers

Community

Employees

Franchisees

Shareholders

Suppliers

Why do we engage?

Listening and responding to customer feedback, both positive and negative, assists us to continually improve our offering, which encourages sustainable revenue growth Understanding and responding to our customers’ changing needs ensures that we are able to provide them with new and compelling reasons to shop at Pick n Pay and Boxer

The success and well-being of the communities in which we trade ultimately affect the success and well-being of our stores and our employees in those stores When you actively engage with and support your local communities, they in turn, actively engage with and support your business, promoting the sustainability of both

If we are to get the best out of our team (and in turn be able to deliver the best to our customers), we must actively and regularly engage with our employees on strategy, key performance indicators, financial performance and on the role we expect each individual employee to play in our business We engage in order to identify and recognise good performance, to provide training and development where necessary and to hold each team member accountable for the job they do

Our franchise stores are an important part of the Pick n Pay business, adding significantly to scale of our business and the reach of our brand Our franchisees are an important resource, providing a valued benchmark of financial performance in an owner-managed store Our franchise model only works when our franchisee has the opportunity to succeed and has an active voice in the business

In order to provide our shareholders with a comprehensive, transparent and objective understanding of the business so that our shares may trade at a fair value and that our shareholders are aware of the risks and opportunities associated with investing in our shares

To ensure that we are able to source a leading range of high quality produce and merchandise for our customers at the best possible price and that together with our suppliers, we are able to commit to on-shelf availability, food safety and sustainable and ethical business practices

Our vision

To be the retailer for every South African To provide a leading range of products and useful services, of outstanding quality and price, in convenient locations To commit to ethical and informative retail practices

To do good in our local communities – and to ensure that our local communities benefit from our ongoing investment in social, environmental and economic recovery and development To promote healthy and sustainable living To be environmentally responsible

To have the best team in the retail industry To be the most sought after employer in the retail industry To provide access to recognition, opportunities, good working conditions and competitive remuneration To have a diverse employee base Meritocracy (advancement based on merit)

To offer the most innovative and mutually beneficial franchise model in the retail industry To operate as a sustainable franchisor of choice for retail entrepreneurs across the FMCG industry

To generate consistent profits in a long-term, sustainable manner To operate according to good corporate governance principles To follow innovative business practices at an acceptable level of risk To provide an attractive return on investment

To build fair, efficient and mutually beneficial business relationships To develop new products that meet evolving customer needs and environmental requirements To give new product innovation the best chance of success on-shelf, through visibility and availability To be committed to continuous development of small businesses and diverse and ethical suppliers To contribute to job creation

Our stakeholders’ requirements

Product quality and food safety Product availability Affordability and good value for money Opportunities for active engagement in sustainability initiatives, such as buying sustainable seafood or using in-store recycling opportunities A reward for loyalty

Many varied social, environmental, economic and ethical needs Job creation Food safety Opportunities for active community engagement, such as charity drives, community clean-ups and other local initiatives

Recognition, remuneration and rewards for services provided Training, career development and wellness programmes (including HIV education) Sustainable business performance To work for a responsible and ethical corporate citizen

Building a sustainable business Resource efficiency (energy, water, waste, logistics) Security and sustainability of supply, timely delivery of products, competitive pricing, product innovation, marketing support, quality of products and food safety Opportunities for cost reductions Transformation and enterprise development

Improving return on investment year-on-year Understanding our business model, strategic direction and profit drivers Sustainability of return on investment Access to timely, accurate and relevant information that supports their value investment Sufficient free float of shares for trade Good corporate governance, including a balanced composition of the Board members A socially responsible and ethical corporate citizen

Fair pricing, research and development support, transparent contracts and agreements certification, infrastructure and logistical support Opportunities for cost reduction Transformation and enterprise development Resource efficiency (energy, water, waste, logistics)

Our engagement

Our Customer director provides a voice to our customers on the Board, ensuring customer engagement and customer service receive priority Personal ”one on one” meetings are held with customers Regular customer surveys, consumer forums and online customer panels Our website www.picknpay.co.za allows for online engagement, as does our active participation on various social media platforms Marketing campaigns Our smart shopper loyalty programme

Forums such as township co-operatives, community affiliations, university partnerships and the Pick n Pay Schools Club The many varied social responsibility programmes of all our individual stores and in collaboration with the Ackerman Pick n Pay Foundation, including valuable skills development, education, small enterprise support and development, health-care, community gardens and various other initiatives

Regular management updates ensures that employees feel part of the team Employee surveys are conducted to ensure employees views are known and considered in strategic decision-making Internal publications provided to employees monthly In-house television and radio communications and employee conferences Skills development and training Ongoing engagement with unions

One-on-one relationships are built with franchisees Regular store visits by franchise specialists and service area consultants Monthly meetings between the regional operational teams Monthly CEO forum meetings with national franchise representatives CSI programmes in the communities in which our franchisees operate

We engage formally at least four times a year – at our two financial results presentations, our AGM and our investor day/strategic update Our CEO and CFO regularly engage with investors, analysts and fund managers We have an investor relations manager who engages regularly with the investment community, including retail analysts, shareholders and potential shareholders Direct and constructive engagement on proposed resolutions prior to our annual and extraordinary general meetings A focused investor relations section on our website www.picknpayinvestor.co.za Result publications and JSE SENS announcements

We conduct food safety audits at supplier factories and production facilities on an annual basis Store visits with suppliers are conducted on a regular basis Joint business planning sessions New store opening programmes Regular meetings in line with merchandise cycle timelines Technical support is provided to suppliers where necessary Supplier conferences A dedicated enterprise development programme

Our performance

We are constantly monitoring calls received through our customer care line and resolving the issues raised – we saw the number of customer engagements increase by 5% to over 300 000 We have substantially increased our digital presence with a 40% increase in the use of our Pick n Pay website, a substantial following on Twitter, a 60% increase in our YouTube subscribers and we are the most popular Facebook presence for a South African retailer with 587 000 followers Smart shopper has given back over R1 billion in smart shopper loyalty points since its inception with more than R500 million in the 2014 financial year Our smart shopper application is a popular download on iStore

Pick n Pay spent R36 million on various CSI initiatives over the 2014 financial year Our smart shopper loyalty programme has generated R1.8 million worth of points which has been donated to charity by our customers since inception Through co-operation with the Ackerman Pick n Pay Foundations, the enterprise development programme has facilitated six rural community farms to successfully supply fresh produce through the Pick n Pay supply chain We have assisted a small start-up company, which produces tortillas and wraps, to become a national supplier to Pick n Pay stores An organic vegetable farm participating in our enterprise development programme supplies our Gauteng region A small meat supplier participating in our enterprise development programme supplies fresh meat into 32 of our franchise stores around Gauteng On “Day for Madiba”, Pick n Pay, together with its franchisees, raised R5 million for good causes, including approximately R4 million for the Nelson Mandela Children’s Hospital and a further R500 000 to the Nelson Mandela Children’s Fund

R92 million spent on skills training and development in 2014 Over 330 training programmes offered to employees, ranging from basic literacy and numeracy through to computer-based training and management and leadership programmes Over 1 600 internal promotions over the 2014 year contributing to the career advancement of valued employees The launch of the Pick n Pay graduate programme Chartered Accountant (SA) training programme offered at Pick n Pay Successful labour negotiation in March 2013 secured a new wage deal for the next three years Roll-out of the Kronos automatic labour scheduling system is facilitating transparent and efficient shift planning

Opened 31 franchise stores during the year Pick n Pay Express was named the Newcomer Franchisor of the year by the Franchise Association of South Africa (FASA) A franchise module tailored for the emerging market has assisted franchisees trading in this environment with structured repayment of debt On “Day for Madiba”, Pick n Pay, together with its franchisees, raised R5 million for good causes, including approximately R4 million for the Nelson Mandela Children’s Hospital and a further R500 000 to the Nelson Mandela Children’s Fund

We held our first investor day in August 2013 to provide our investment community with a strategic update between our two result presentations We took part in a number of store and distribution centre visits during the 2014 year We appointed Dr David North as our new Head of Corporate Affairs, whose portfolio includes the responsibility for investor relations Our CEO and CFO held one-on-one meetings with 12 of our biggest shareholders in November and December 2013 We engaged constructively with our shareholders on our proposed new share incentive plan for top management, with the subsequent shareholder resolution being passed with an 80% majority at our extraordinary general meeting

One conference held during the year Almost 700 health and safety audits undertaken during 2014 Almost 350 new suppliers in 2014, and over 31 000 new products supplied in our stores Through co-operation with the Ackerman Pick n Pay Foundations, 69 businesses and community enterprises have benefited from the enterprise development programme of which 43 are now supplying our stores. Through the programme’s focus on job creation, small enterprises have been able to either support or employ 8 500 people R33 million spent on technical support provided to suppliers