Africa’s grocer gets to sleep in after 37 years
Sector bids farewell to a business leader who has proved to be one of the best brains in food retail
RIGHT about the time Massmart founder Mark Lamberti was opening his first Game store in Mauritius, Whitey Basson was cutting the ribbon at his first Shoprite store in the island nation.
Some 14 years later, Shoprite has opened two more stores, and Massmart has pulled out of the country after its store there underperformed.
Digging deep and finding space in some of Africa’s more difficult markets — among them Nigeria — during a 21-year venture into the rest of the continent has proved to be a winning strategy. Central to it is Basson. “He comes across as rough and ready but he is extraordinarily astute and he is astute in a number of ways: as a strategist and the way he went about growing that business,” Lamberti told Business Times this week.
The pair met early on during Basson’s 37 years at the helm of Shoprite, after Lamberti bought six ailing Makro stores in 1988 and expanded into general merchandising.
“We completely restructured the South African fast-moving goods industry,” said Lamberti .
“The reason we were able to be good friends is because we were really not competing with each other.”
While news of Basson’s retirement may not have come as too much of a surprise, there’s a sense of a changing of the guard. In the near four decades that he has been blazing a trail, Pick n Pay has had seven chief executives and Spar has had six.
Woolworths had four chairmen in that time, before appointing its first CEO, Simon Susman, in 2000. He was succeeded by Ian Moir 10 years later.
Along with MTN and a handful of other companies, Shoprite has been able to successfully wade through the complications of an African expansion programme that began in Zambia in 1995.
Rivals such as Pick n Pay haven’t been as adventurous, and Woolworths has chosen to focus on the local market and more recently on Australian expansion.
Not known for his modesty, Basson, who retired at Shoprite’s AGM this past Monday, said he had known the retailer would be big.
“I planned to be big, I did my homework on acquisitions that we had to do to get us to the size where we are today.”
Shoprite has more than 2 000 stores, including the South African stores and 18 in Nigeria, Africa’s most populous country. It’s a destination that has proved most difficult for retailers such as Woolworths and fashion group Truworths.
Despite his confidence in building what is today an empire valued at R152-billion, Basson’s legendary R1 deal to buy OK Bazaars in 1997 was a gamble.
“I worried sometimes with OK Bazaars. It was like a suicide mission, if you really come to think of it.”
Shoprite bought OK Bazaars from SABMiller, a purchase that at the time many industry insiders described as “reckless” given the woes at the grocer.
The deal, however, deepened the group’s presence among South Africa’s burgeoning middle-class consumers.
“When we bought OK Bazaars . . . we sat down and we looked at all the stores. We made Checkers and we made Shoprite, so we repositioned all the stores in a single six-month period . . . so we had a focused business that could cater for different segments of the economy,” said Basson.
“In the history of our company, we started off in the lower LSMs of the South African economy and today we cover from the top one to right at the bottom, on a food basis . . . if you look at the total population.”
One thing is clear: Basson knows his consumers and he follows them where they go — but not without competition.
Shoprite’s long-time rival Pick n Pay was once the behemoth of the food retail industry — a position it lost following a series of mishaps in supply chain management, centralised buying and cost controls that allowed the competition to chomp away at its market share.
Reflecting on his relationship with Basson, Pick n Pay chairman and former CEO Gareth Ackerman described him as a tough competitor.
“When he started buying the Checkers and the OK brands, our team sort of scoffed at the idea at the time.
“We didn’t have a huge amount of interaction, because we were all so paranoid about the Competition Commission, so we really didn’t talk very much or very often, but we did have a good working relationship.
“When there were the sort of problems that were industry and not competitive-related, we did talk and we were able to sort them out,” said Ackerman.
“Not always to either of our satisfaction, but we at least were able to pick up the phone and talk to each other.”
Ackerman said Pick n Pay had learnt from Shoprite how to compete better in the mass market.
He said he thought the real challenge for Basson would be to let go of the reins.
Ackerman’s father, Raymond, founded Pick n Pay in Cape Town in 1967 and only retired from the group in 2010 at the age of 79.
“When you are the founder of the business, it’s really difficult to let go . . . I’ve had the same issues with my father when I took over Pick n Pay from him and he has been very good at pulling back and leaving us to run the show.
“I think that’s a key part of it,” said Ackerman.
Basson, 70, will remain at Shoprite until September next year.
“If there are outstanding matters which I can do quicker than what they can do or whether they would like my assistance . . . I still have a semi-role to play on a standby basis,” he said.
Basson’s replacement, Pieter Engelbrecht, currently the group’s chief operating officer, will be taking over from Basson at the beginning of next year.
Engelbrecht, who was once Basson’s personal assistant, has been with the group for more than 20 years.
“He’s just a really smart young man, he is one of the best retailers that I know and has been hand-picked and trained and he has built up a young team with him already, so he doesn’t have to start all over,” said Basson.
He said that “business will continue as before, because he has been 70% part of it in any event”.
And as far as Basson’s immediate plans after retirement go: “I actually just want to stay at home and sleep longer, that’s all.”
If they’d like my assistance . . . I still have a semi-role to play on a standby basis