Raymond Ackerman stands down – sort of
Doyen of supermarket retailing in South Africa Raymond Ackerman has announced he will be standing down – sort of – early next year just short of his 80th birthday. But family control of the company will remain. His position has been handed to his son, Gareth.
Ackerman is almost synonymous with Pick ‘n Pay stores and has been with the company for 43 years, introducing to South Africa the concept of a powerful consumer orientation as the over-riding, first law of store management.
The focus was ruthless, and in the process Ackerman was forced into scrappy fights with suppliers, staff and government, yet his single-mindedness in providing value goods presented in an attractive way forced other players to up their games - massively. It also ultimately forced his biggest competitor, OK Bazaars, into effective liquidation.
The overall result was not only better supermarkets in SA, which compare easily with some of the best in the world, but also an impeccable record of long-term growth for the Pick ‘n Pay group. The company noted that someone who invested R100 when Pick n Pay listed in 1968 would be worth nearly R1-million today.
Under his auspices, Pick ‘n Pay grew from four small stores in Cape Town, and will have 795 stores by February next year. The number of employees increased from 175 to 53,100. The company has produced 20-year share price compound growth as at October 2009 of 16.0%, and grew at 17,5% annually compounded over the past decade. Pickwik, the holding company, grew at 14,9% compounded over the period and at 18% over the past decade.
The distinguishing feature of the company was its family ownership and control, which Ackerman only partially conceded with the appointment of CEO Nic Badminton in 2007.
But it will be Gareth Ackerman who takes over from the paterfamilias as chairman of the company. Gareth, 52, will take over as a non-executive chairman; a designation which is sure to elicit guffaws in the investment community.
And neither will Raymond be entirely absent. He will stay on as an advisor to the company performing an ambassadorial role and will continue to be based at the company’s head office in Cape Town, Pick ‘n Pay said. (How’s that for dedication?)
Despite complaints, from suppliers in particular, who are forced to do things like unpack their products onto the shelves themselves, there are few who would doubt that family control of the company probably gave Pick ‘n Pay something of an edge. Reflecting on the issue, Ackerman snr. said Pick n Pay was “unashamedly a family controlled, but professionally managed company with a very strong focus on corporate governance.
“Being family-controlled has also ensured that the values introduced in 1967 have carried through over 42 years. Importantly, this will not change,” he said.
Ackerman’s announcement took place simultaneously with the announcement of the company’s interim financials for the six months to 31 August, during which turnover increased 12.3% to R26.6bn. Crucially, profit at the Australian acquisition, Franklins, quadrupled off a low base to R14,7m.
By Tim Cohen
(Photo courtesy of PropertyMag South Africa)