Pick 'n Pay's Score takeover continues

MBONGENI MGUNI
Staff Writer | Friday March 26, 2010 00:00

Pick 'n Pay is rolling out its award-winning franchise in Botswana, with the winning franchisees taking over the 11 Score Supermarkets and expanding the South African company's brand and presence in the country.

Each branch transformation costs between P5 million and P6 million and is financed through a complex arrangement involving guarantees by Pick 'n Pay, funding from First National Bank Botswana and subsidised input by the franchisee.

Last year, Pick 'n Pay franchisees took over Score Supermarkets in Lobatse, Francistown and the South Ring Mall outlet in Gaborone while eight others underwent training within Score and Pick n' Pay outlets in readiness for the transformation of targeted branches.

Pick 'n Pay Botswana Chief Executive Officer, Mahesh Patel, told Mmegi that this year, the retail giant was targeting the transformation of Score supermarkets in Serowe, Selebi-Phikwe and Jwaneng. He said the franchisees for the three supermarkets had already been primed for the task ahead. 'What we have done is take over the Scores,' Patel said. 'All the potential franchisees are in place running these at the moment. They run these stores before the conversion, which gives them time to familiarise themselves with the operations so that by the time we convert the store to Pick 'n Pay, they are familiar.

'The potential franchisees also have to work for two months in a Pick 'n Pay which they have done also. There's a programme for the roll-out and in the next three weeks, the Selebi-Phikwe Score will be converted into a Pick 'n Pay, then Serowe and Jwaneng.'  Patel said only three will be converted this year while the balance will be converted next year and beyond. The number of conversions per year is limited by the length and complexity of the process involved, among other factors. 'Each conversion takes between eight and ten months and there's quite a bit of work to be done in the revamping exercise,' he said.

The Pick 'n Pay CEO said thus far, the converted franchise supermarkets were enjoying strong support from the community. Prior to the conversion, fears abounded that Pick 'n Pay's takeover of a supermarket chain specialising in comparatively cheaper priced consumer goods would alienate some shoppers, particularly from the low-income bracket. 'There was a perception that Pick 'n Pay was elitist, just because the stores looked pristine and high class,' said Patel. 'That is slowly breaking down. People are beginning to see that this is value for money.Francistown and South Ring Mall are classic examples of this.

'The three franchises that opened last year are receiving good support from the community, which is beginning to realise the benefits of shopping there. 'Francistown is doing very well, as is South Ring Mall.  'Lobatse is also doing well for the size of its population. People in rural areas must not feel scared to walk into a Pick 'n Pay, thinking that everything there is expensive.'

He added that with consumers' spending power diminished by the recession and other factors, shoppers were appreciating the benefits of buying high quality, fresh and guaranteed goods instead of dicing with cheaper quality goods.

'In addition, these shops are owner-managed, meaning that their success depends on the owners' determination,' Patel added. 'We are seeing that the owners are making sure that standards are kept high and consistent, which is a benefit to consumers.'