Pick n Pay “Project Red” (brand name to be finalised) – serving lower- to middle-income customers. These supermarkets will carry around 8 000 products, with an emphasis on essential food and groceries, and a strong fresh offer – and will provide low prices and exceptional value.

Pick n Pay – serving middle- to higher-income customers. These supermarkets will carry around 18 000 products, with an emphasis on quality, convenience and innovation, and will include a fully integrated omnichannel offer.

The new Pick n Pay customer value proposition (CVP) is currently in a testing phase. The development of two strong and clearly differentiated Pick n Pay brands is an important step forward in Pick n Pay’s ambition to meet the needs of the broad and diverse customer demographic in South Africa.

Our hypermarket division also provides a growing wholesale offer to cater for an expanding customer base of independent traders. Customers are increasingly seeking greater convenience through smaller stores located close to home, work and transport. As such, the Group’s growth plans in recent years has focused on smaller format stores, and there are no plans to open additional hypermarkets. The Group remains focused on utilising this format more effectively as a “destination shop”, through targeted promotions on essential food and grocery lines – including multi-pack, bulk-buy and combination deals – alongside an increasingly tailored clothing and general merchandise range.

A Local store has a much smaller range than a traditional supermarket and is tailored specifically to the community it serves. The range is focused on fresh and convenience and can include a bakery and butchery. Customers can pop in quickly for a daily top-up but can still choose from a tailored grocery and general merchandise offer for a larger weekly shop.

Pick n Pay Clothing is available in 21 hypermarkets, 163 supermarkets and 277 stand-alone stores. The Clothing division delivered a solid performance this year, recovering well from the significant disruption experienced last year as a result of Covid-19 trading restrictions. Its clear customer value proposition and highly efficient operating model has delivered strong market share gains for four consecutive years. Local sourcing now represents 40% of total clothing sales – providing the opportunity for exciting collaborations with local designers and entrepreneurs, while reducing order lead times and maintaining high levels of availability. Pick n Pay Clothing is a strategic priority under Ekuseni, and will expand through new stand-alone clothing stores, additional space in supermarkets, and a growing online offer, including through its strategic partnership with online retail platform Zando.

These stores offer a range of wine, spirits and beer, including innovative local craft products. Pick n Pay Liquor stores provide customers with the added convenience of purchasing liquor at the same time as doing their grocery shopping. The Group lost 66 trading days this year (FY21: 209) as a result of trading restrictions under the South African government’s Covid-19 risk adjusted strategy. The Group is working closely with suppliers to restore sales volumes, including through strong promotions and improved on-shelf availability.

Pick n Pay Express offers a targeted convenience range to satisfy an immediate top-up shop or a quick meal solution. The range is limited and mainly focused on daily needs. Sites are located in high-traffic flow areas, including high-density residential areas and public transport intersections. Pick n Pay’s Smart Shopper loyalty customers are able to buy fuel with accumulated Smart Shopper points.

This partnership provides spaza shop owners with access to Pick n Pay’s procurement and distribution channel, business systems, technology, and management advice and mentoring. This small format trades in lower-income communities and the more informal economies of South Africa. While the Group opened five new market stores during the year, seven underperforming stores were closed, including one store unable to recover after the devastating civil unrest in KwaZulu-Natal and Gauteng in July 2021. The Group will focus on optimising the market store operating model in the year ahead.