SA retailer Pick n Pay launches aggressive plan to take on competitors

SOUTH AFRICA – In an effort to claim back market share, Pick n Pay has launched a new strategic plan, which will see the retailer transform into “customer-facing brands”.

Under the plan, Pick n Pay aims to distinctively serve the three main market segments i.e. less affluent, middle market, and more affluent, paying close attention to their needs and wants.

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The strategy was formulated after almost a year in customer research, with more than 7 000 customer interviews.

Its mainline store brand, Pick n Pay, has been competing across the three consumer markets. Feedback from customers has shown that this strategy has led to inconsistent product offerings, service levels, and store experiences – something which the retailer now wants to change.”

In a repositioned market, the Pick n Pay banner will shift focus to the more affluent market, dominated by Woolworths and more recently, Checkers FreshX stores.

Pick n Pay stores will offer a depth of range, and an emphasis on quality, innovation and freshness. These stores will have a range of around 18,000 SKUs, giving customers great value, linked to best quality.

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Meanwhile, the middle market, which was also served by Pick n Pay, will now be catered for by the newly introduced Project Red stores.

The stores will have a range of about 8 000 products, with an emphasis on essentials, a strong fresh offer and excellent service.

The company will further leverage its discount brand, Boxer, to compete in the less affluent market – a segment where it traditionally competes with Shoprite, offering 3 000 SKUs with lowest price discounts.

While there is a renewed focus on the middle and upper markets, Pick n Pay says it’s the lower market that offers some of the greatest opportunities for the group.

All market segments are expected to grow by 2026, but it’s the less affluent segment that is anticipated to add the most market value of approximately R140 billion (US$8.9 billion).

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Pick n Pay has a market share of 16% – but only 11% within the less affluent segment. This provides a lot of room for potential growth, it said.

To this end, Pick n Pay said it wants to expand its Boxer stores in the country, with plans to add 200 stores over the next three years. The group currently has 380 Boxer stores.

It will also be investing heavily in its supply chain network to support this rollout, while also enhancing its system developments around supply chain planning.

The group hopes to double Boxer sales by FY2026, and wants is targeting overall market share growth of 3 percentage points to 19%.

In addition to the strategic retargeting of customers, the retailer has inked a partnership with online retailer Takealot and its Mr D service to ramp up its online sales.

Pick n Pay seeks to increase its online revenue eight-fold by 2026, leveraging also on its Pick n Pay ASAP delivery service which has delivered a year-on-year growth of over 300% since August 2021.

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