Our six capitals
Our ability to create long-term sustainable value for stakeholders
depends on the use of various capitals within our business. The
International Integrated Reporting
Financial
Human
Manufactured
Social and relationship
Intellectual
Natural
Our key stakeholders
The Group is committed to open and constructive engagement with all our stakeholders. Our business model and strategy are designed to consider and address the issues and concerns most relevant to our key stakeholders. Refer to the "Engaging with our stakeholders" section on pages 38 to 41 for more information.
Customers
Community
Employees
Suppliers
Franchisees
Shareholders
Our business acceleration pillars
The second stage of our strategic long-term plan is organised around seven business acceleration pillars. These pillars represent the material growth opportunities that can materially affect our ability to create value over the short, medium and long term. Refer to our "Strategic focus" section on pages 44 to 51 for more information.
Better for customers
A flexible and winning estate
Efficient and effective operations
Every product, every day
A winning team
Boxer–
a national brand
Rest of Africa – a second engine of growth
Our business model describes how the Pick n Pay Group creates long-term sustainable value for all its stakeholders – through the effective and balanced use of our
capitals, while keeping the customer at the centre of everything we do. Our business model is underpinned by strong corporate and social governance, with our unique
values at its core.
Financial capital
The financial resources raised and utilised by the Group, consisting of equity and debt funding, and earnings generated and retained by the Group.
Manufactured capital
The physical infrastructure used in the Group’s operations, which includes its real estate, distribution channel and the information technology used throughout the Group.
Intellectual capital
The knowledge, systems, processes, intellectual property and brands contained within the Group.
Human capital
Our valued Pick n Pay and Boxer staff, with their skill, talent, ambition and diversity, that underpin a winning team.
Social and relationship capital
The relationships the Group has developed with all its stakeholders, governed by its values and the enduring principle that doing good is good business.
Natural capital
The environmental resources utilised throughout the Group’s operations, through its production, distribution and retailing of consumer products.
The Group is a food, grocery, clothing and general merchandise retailer, selling a wide range of products at competitive prices under our Pick n Pay and Boxer brands. The Group’s operating model utilises its capital inputs in its retail operations in the most effective and efficient manner in order to optimise its capital outputs and outcomes for all.
The Group has created value for our stakeholders for over 50 years. Our business model maintains a virtuous circle which balances the needs of our stakeholders in a fair and effective manner while managing the trade-offs between our capitals.
This virtuous circle enables growing and sustainable returns for shareholders, while supporting ongoing investment in the communities which we serve and meaningful reinvestment into our business and our people.
Our capital outputs include the wide range of products and services that we sell to our customers under our Pick n Pay and Boxer brands – this includes food, groceries, clothing, general merchandise and other value-added services. As a result of our retail operations, we produce by-products and waste, and we remain committed to reducing our environmental impact.
Financial capital |
|
| A tough trading year resulted in muted turnover growth of 5.3% |  |
| Successful strategic initiatives drove improvements in our customer offer, resulting in strong quarter four turnover growth of 7.3% |  |
| Gross profit margin maintained at 18.7%, with operating efficiency supporting price investment | |
Manufactured capital |
|
| Reached new customers and communities by opening 125 net new stores | |
| Improved our customer offering through the refurbishment of 61 company-owned stores and opening of two new distribution centres | |
Intellectual capital |
|
| Modernised our Smart Shopper loyalty programme | |
| Strengthened procurement through buy better programme | |
| Launched Pick n Pay Fast Pay | |
| Partnered with TymeDigital to launch low-cost banking services | |
| Launched our new mobile-enabled online shopping website | |
| Introduced 730 new or refreshed own-brand products in store | |
Human capital |
|
| Pick n Pay implemented a voluntary severance programme (VSP), reducing its workforce by 10%, which has improved the productivity and efficiency of the Pick n Pay team | |
| Delivered 31 595 training interventions, reaching almost 11 000 staff | |
Social and relationship capital |
|
| Partnered with eight new spaza store owners, bringing safe, modern and high-quality grocery offer to previously underserved customers | |
| Supported our communities by assisting learners through Pick n Pay School Clubs and raising funds through Pick n Pay Pink Walks for breast cancer research | |
Natural capital |
|
| Energy use per square metre reduced by 37% compared to our 2008 baseline, a 3% improvement on last year | |
| We diverted 54% of our waste from landfill, a total of just over 18 000 tonnes | |
| Substantive action taken to reduce our water consumption, with a 13% decrease on last year | |
|
Strong performance |
|
Satisfactory progress |
Read on to find out more about our capital trade-offs and the value we create.