Pick n Pay Group CEO Sean Summers. (Photo: Supplied) A new regional focus, a six-member executive team and a revived focus on improving relationships with suppliers will be the cornerstone of Pick n Pay’s turnaround plan.
CEO Sean Summers, who returned to Pick n Pay to replace former CEO Pieter Boone early in October, told Daily Maverick on Friday that he had spent three months “looking under the hood” of PnP’s operations and realised instead of recruiting expertise from outside, there was an extraordinary depth of retail talent within the company.
“So it was a case of getting people aligned, putting them in the right place and getting them back on point,” he said.
The job shuffle – three current and three returning leaders at Pick n Pay – will help guide a new strategic focus on customers, purchasing, store execution and the group’s footprint.
In a newly created position, Dallas Langman has been appointed to the key role of managing executive of the retail division. Langman has been with the group for 34 years and has extensive experience in the group’s supermarkets, hypermarkets and franchises.
Three of the top appointments are women, including group chief financial officer Lerena Olivier, chief people officer Thembi Mbengashe and managing executive for clothing Hazel Pillay.
Johan Grobler steps into Langman’s previous position as head of Rest of Africa and will also be responsible for value added services and Tomis, the newly acquired meat supplier, which PnP bought in June last year for R340-million. Grobler has been with the group for 32 years.
Marek Masojada stays on as managing executive of Boxer, its successful discount supermarket chain.
“The devil is in the detail in retail,” Summers said, noting that by putting a geographic infrastructure back in place, PnP would be far more adept at running the business and executing consistently, which had been one of its biggest challenges.
“You have to have a command and control structure in place that allows you to effectively manage your organisation on a daily basis.”
Regional focus
The new structure covers northern Gauteng, southern Gauteng (which includes the Free State), KwaZulu-Natal, Gqeberha (from Border to the Garden Route), Mossel Bay and the Western Cape. All these regional divisions will have their own heads of finance and buyers, which will allow them to micro market.
Regions have distinctive characteristics, Summers said. “For example, KZN has a very active independent trader market, so we have to approach all of these markets in a different way. You can’t just have one amorphous approach to South Africa. It’s a very, very diverse country.”
Future-proofing the group is not simply about returning PnP to profitability in the next few years: It’s a case of ensuring it will be around in the coming decades, because the retail marketplace is evolving, with changing dynamics.
“[By] the same token there are lots of things that are not changing in retail. One has to have a fair grip on what retail could evolve into in terms of the combination between your physical store infrastructure, as well as the infrastructure that you are going to need to take care of the online shopping and home delivery portion of the business as well.”
PnP’s relationships with suppliers, he conceded, had been “somewhat fractious” over the years, which was why he had spent time with suppliers to mend relationships and reach a common understanding. Suppliers were highly invested in seeing PnP restored to its rightful place, he said.
Summers hopes the changes will give the group greater focus with a new, dedicated head of retail, a regional structure, more regard for customers and a dedicated commercial section
Pick n Pay’s share price fell by 65% last year, which it attributed to its floundering grocery business, and the retailer posted its first interim loss. On 2 October, Pick n Pay issued a Sens announcement which included a profit warning coupled with the announcement that Summers was being welcomed back to the fold. Management said they expected to report a half-year loss of between 79.31 and 98.18 cents per share, which was down between 184% and 204% year on year.
Summers’ reappointment came at a critical time for the retailer, which had warned for months that it was under significant pressure.
While PnP floundered under the winter of Boone and his predecessor, Richard Brasher, the group is betting on Summers to bring more summery results.
In July last year, Pick n Pay said it had faced abnormal costs of R610-million owing to the increased expense of rolling blackouts, a duplication of supply chain costs and restructuring costs.
Summers, an “old hand” at the retailer, has spent 33 years with Pick n Pay: he was MD from 1996 to 1999 before becoming CEO. He left the group in 2007, at the height of a successful period for the retailer, and took a sabbatical before being appointed to head Steinhoff’s 450-store UK bed and furniture chain.
He was close to PnP founder Raymond Ackerman, who died last year. Summers told Daily Maverick last year: “We owe it to [Raymond’s] legacy and to Wendy [Ackerman, his widow and co-founder of Pick n Pay], to restore the company to its rightful place.” DM