Six spaza shops: and that’s change?
No party for BEE as Pick n Pay reaches 50
THIS week, Pick n Pay celebrated its 50th anniversary with the release of a stellar set of annual results. Notwithstanding the macroeconomic headwinds faced by its customers across the continent, the group was able to generate just under R80-billion of revenue and deliver 18% growth in headline earnings.
In the midst of this outstanding financial performance for its shareholders, it was difficult to find similar progress on transformation.
The South African retail industry has for decades been criticised for its slow pace in transformation, especially at ownership level. The reality is that retail giants do not believe they need to have black shareholders. Their reasoning is simple — nothing compels them to. They do very little, if any, government business and besides, every South African whether in Sandton or Soweto is forced to buy from them because they are everywhere you look and, more often than not, offer great value to customers.
I posed this question to Richard Brasher, who has been the CEO of Pick n Pay for the past four years, and while a part of me suspected that the Hong Kong-born former head of UK supermarket chain Tesco was probably more focused on margins and supply chains, nothing could’ve prepared me for his response.
“A lot of our best franchisees are black people, so it’s not like we have any issues with that process, and in fairness I think the team has made good strides in making sure that when you look at the vast majority of our business, which is actually inshop, which is where we employ the majority of people, I think we have made incredibly good progress in relation to our contribution to transformation, which we believe in.” COINING IT: Founder Raymond Ackerman can look back with pride, but his group has been slow to introduce transformation
Brasher is not the first CEO to quote staff numbers as a measure of contributing to transformation. I honestly do not know why corporate South Africa believes that hiring black people is a contribution to transformation.
As the South African business community, we all operate in a country where almost 80% of the population are Africans.
Whether you are making pizza, building roads or selling corn flakes, the majority of your unskilled and semi-skilled labour is going to be black.
On its own, hiring black people is not an achievement for transformation. It is an achievement for job creation. Transformation is something else.
In our context, transformation is about getting black people to be effective participants in the mainstream economy.
In the words of Steve Biko, it’s about blacks no longer “standing at the touchlines witnessing a game they should be playing in”.
That talks not just to jobs, but to employment at management and executive level. That talks to ownership. It talks to control. It talks to playing in the game — not watching from the stands.
Brasher continued: “We do, however, have an exciting pilot project where we have six spaza shops in Soweto, where we are using the scale of our business through technology and buying capability to help them upgrade their businesses as entrepreneurs. We don’t own the shops. They run their own businesses with some of them running since 1972. It’s been extremely energising and rewarding to watch entrepreneurial spaza shops double and sometimes triple their turnover and make for themselves a better living with our support.”
My original question on ownership was premised on the unfortunate reality that there is clearly no intention of introducing black shareholders at Pick n Pay group level.
The argument that the Public Investment Corporation is indirectly a black shareholder is no different to claiming the large number of black employees as transformation progress. The PIC looks after the pension funds of government employees of South Africa. Naturally, these would largely be Africans, as would most staff in a retail operation in South Africa.
I limited my question to how Pick n Pay can use its franchise model to help blacks own and operate more of its stores and in that way put them in that empowered position Biko spoke of. What I got back was how the group was assisting six spaza shops in Soweto. Six spaza shops. Fifty years later. The fact that Pick n Pay can celebrate five decades since Raymond Ackerman bought three small stores in Cape Town and grew them to a multibillion-rand group with over 1 500 stores across the continent is something we, as his countrymen, should never fail to honour and applaud.
Equally, the fact that Pick n Pay can only point to a handful of blackowned franchisees and six spaza shops as its way of being part of the solution to economic transformation and chronic inequality cannot be acceptable.
South Africans expect much, much more.
Retail giants don’t believe they need to have black shareholders