“Sometimes, it is exhausting to be a South African,” Gareth Ackerman, the chairman of Pick n Pay, yesterday said in a speech ahead of the interim results presentation, as he reflected on the challenges facing the retailer, while calling on the government to incentivise business to make infrastructure upgrades – through rates or tax rebates.
This, as he said: “ We are not powerless to turn this situation around. In fact, a much more positive trajectory is possible if we get just a few basics right.”
He said tax levels in South Africa were high.
“There is room to incentivise business to invest in the common good, but please don’t double tax us!” Ackerman said as he reflected on headwinds, such as food inflation, the decay in infrastructure, including electricity and ports, as well as crime, violence and corruption.
But despite it, he said the group planned to still invest in the country and spend about R4 billion in capital expenditure this financial year alone.
Much of this would be in expanding Pick n Pay’s infrastructure, with a large investment in its distribution centres.
“Ekuseni will see even more invested in our economy as we grow. R10bn over four years is a serious commitment to the future of South Africa and our business,” he said.
It was not good enough for us in the private sector just to simply bemoan where it was, he said, or to say that its voice was not heard by the government.
“We need to redouble our own work and find new ways to ensure that government takes its share of responsibility,” Ackerman reflected.
Challenges facing the retailer:
– Loadshedding: Pick n Pay will have ten company-owned sites with solar by the end of the year. It will continue to work with its landlords to add additional alternative power sources for the group and, in particular, for the small tenants, who were not being adequately served in a number of cases. It will also have a total installed capacity of more than 10MW at its new Eastport DC.
– Food inflation: Pick n Pay said it strove to provide the lowest possible prices in all its stores. It has set out to save R3bn over the next three years.
- Macro-economic environment: Decay in infrastructure with electricity and rail systems at risk of collapse. Local ports are rated as some of the least efficient in the world. Crime, violence and corruption .
In response, Ackerman said the retailer was creating jobs and growing its store footprint in this financial year.
“This is the right way to grow an economy, and the only way that we will ensure that the country is on a pathway to prosperity,” he said.
Pick n Pay had joined the Consumer Goods Council, of which Ackerman was the co-chair. It had established a foundation to assist public-private sector partnerships to add capacity to municipal authorities facing service delivery challenges, such as water and sewage reticulation, road networks and electricity.
“This benefits us as well as the communities involved. Infrastructure challenges are making it really difficult for us to operate. Some companies have relocated their operations to better-run municipal areas. This is understandable but exacerbates rather than fixes the problem. It is critical that we get involved in service delivery in areas where we otherwise see little will or competence to fix the problems. Business can make a positive difference. We can’t wait for help because it can’t come and isn’t coming,” he said.
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