Wednesday, May 01, 2013

Pick n Pay has a new CEO...but does he have a clue?

...earnings per share from continuing operations are 31% lower. The dividend is down by 36%...

 The new CEO, Richard Brasher, has been on the job for just 2 months. Last week he was a guest on a popular local finance program (click link above for a transcript), speaking of his plan to turn the slowly sinking giant around. But I am not sure he really understands the reason South African shoppers are abandoning his supermarket chain in favour of the competitors. Below is a copy of the email I sent to him this afternoon...

Dear Mr. Brasher:

Last week I heard you speak on MoneyWeb on Radio 702. I thought you'd like to know why I stopped shopping at Pick n Pay and why my venture into a store today only firmed my resolve.

I live near the Woodmead Pick n Pay Hyper, but have also done considerable shopping at the Morning Glen, Morning View, Sunninghill, Northgate and Douglasdale stores. With the exception of the issues with the pharmacy, which is limited to the Woodmead store, my remarks apply to all of the Pick n Pay stores I have patronized.

The ineptitude of your pharmacy nearly killed my husband. He is diabetic and takes numerous medications for that condition as well as hypertension and hyperlipidemia. He picked up a set of his repeat meds from your pharmacy on one occasion last year and the pharmacy had neglected to put in his blood pressure meds. Because he takes so many meds, he did not realize at first that one of them was missing and so he went for more than a week without his blood pressure meds. He found out when he started having symptoms of dizziness and laboured breathing and I took him to the hospital where they discovered his blood pressure was at stroke level. He didn't receive his meds but you can bet our medical aid was billed for them as well as the emergency room visit necessitated by your pharmacy's deplorable oversight. While this was by far the worst incident of the pharmacy's ineptitude, it was far from the only one. Almost every month your pharmacy was either out of stock on such staples as insulin pens and needles and commonly prescribed meds (I can understand not having a stock of rarely prescribed meds, but insulin? glucophage? blood pressure meds? statins?). What is even worse than being out of stock is having to count my meds upon receiving them because your pharmacy chronically shorted me on my meds. The prescription would call for 30 tablets, the pharmacy would either short me a whole card or fail to give me a partial card to make up the whole 30. So, I would bring in a prescription for 30 tablets and receive 28, which is neither what the doctor prescribed nor what our medical aid paid for. After numerous complaints to the pharmacy manager and even the store manager...which garnered us apologies and promises but no action or improvement...we have taken our medication business to your competitors. We have not used your pharmacy for nearly six months now: between Pharmacy Direct and DisChem, our needs are handled adequately and Pick n Pay has lost thousands of rand per month in revenue to the pharmacy with our move elsewhere. We are both diabetic, hypertensive and hyperlipidemic--I take five different drugs plus my insulin, my husband takes even more than I do: we are walking wallets when it comes to revenue from medications and your pharmacy drove us away with its lackadaisical attitude regarding our health and even our lives.

I have pretty much switched to Woolworths for my grocery shopping and to Makro for cleaning and pet supplies. But there are always a few things they don't carry and so I periodically pop into a Pick n Pay for those items. I did so this morning and as a result of my visit, have decided to simply skip Pick n Pay from now on and just stop in at Spar or Checkers for those items. Why? Because you have either discontinued items I normally buy or you cannot seem to keep them in stock. Coupled with the unappetizing condition of your fresh produce, I just cannot see why I should waste my time even going to a Pick n Pay because, based on several years of increasingly dismal experiences with your stores, I am just wasting time and energy going there. This morning I stopped in for just two items, items I have been purchasing from Pick n Pay for nearly ten years, items I have not seen on the shelves for the last couple of months: Kraft Miracle Whip and netted bags of rawhide "bones" for my little dogs. In the past I have seen your stores be out of stock for months (literally) of Pick n Pay's own brand of kidney beans, crush tomatoes and tomato puree. At one time you carried Dairy Belle Colchester cheese in slices...I haven't seen it in years, now. At one time you carried Maruchan Cup-of-Soup but it has probably been a year since I've seen it: you substituted an inferior self-branded product that is more difficult to use and less tasty (the noodles taste like cardboard) and you don't bother to even keep that adequately stocked, leaving only the Maggi brand well stocked, which tastes disgusting.

I don't know if your employees intentionally dissemble to the customers, but I recall coming into a Pick n Pay store and finding no fresh chicken. This happened several weekends in a row and finally somebody taped a sheet of paper to the empty section saying that there was a "shortage of chickens." Really? Then why did Woolies and Spar have them? I have gone to multiple Pick n Pay stores looking for frozen one store someone had taped a similar sign inside the freezer...and yet I could find frozen peas at a Spar and Woolies. And who is the person responsible for scheduling bread deliveries? Maybe someone should tell him/her that weekends tend to be busier than weekdays and he should order extra for the weekend shopping...I cannot tell you how many times I have walked into a Pick n Pay store on a Sunday for bread and the shelves are virtually empty.
I am appalled when I walk in the store and find entire shelves empty. I was in the pet food aisle this morning and literally saw a dozen or more metres of actually empty shelves. The various treats I regularly buy for my dogs (four of them--that is a lot of biscuits) were out of stock. I have seen your stores fail to stock some items, like Beeno Chocolate-coated biscuits, Beeno Chocolate Drops, and Beeno Yoghurt drops for months--no exaggeration--at a time. It has been a month since I have seen Dentastix (the kind with the green filling) in your stores. I went to the pasta aisle this morning and found empty shelves there. I once waited eight weeks for the Woodmead store to restock beans and dishwasher rinse aid...both store brand...and finally had to approach a manager to find out if the items had been discontinued. On my subsequent visit I inquired as to the reason for the lack of stock (as the items had been restocked in the intervening week) and was told that the individual responsible for monitoring and reordering stock had simply failed to place the order: the system reflected the lack of stock but the operator simply did not reorder. Guess what? Within the month those shelves were empty again.

The worst thing about the empty shelves is that it looks to me like it is a part of your business plan. When I first came to South Africa ten years ago and walked into a Pick n Pay for the first time, I saw a card on the shelf in the place boxes of breakfast cereal should be. That card was professionally printed, not something someone ran off on the computer to deal with an unexpected shortage. It was a professionally printed "tent" card intended to stand in the empty shelf and printed on it was something to the effect of "Oops! We are out of this product____________. " In other words, the unstocked shelf issue is so common to your stores that you spend money to have "Screw you, go buy it from our competitors" cards printed up to put on those empty stretches of shelves.

Why should I shop in your stores? The stuff I want to buy is not there...we are down to TWO products I relied on Pick n Pay to carry and now you don't have those any more. I spend more than R1000 per week on groceries and another R1000+ per month at Makro on items I used to buy at Pick n Pay. Hypermarts should be the answer to a busy person's prayer---everything under one roof---but if I have to go to your competitors to buy the stuff I want, kindly explain to me why I should burn either my petrol or my time going to a Pick n Pay, because personally, I don't see any reason at all.

The bottom line for any retail business is that in order to make money, you must have stuff to sell. And if you want to do very well at making money in retail, you have to have stuff that your customers actually want, and in sufficient abundance that there is enough for all of them. You aren't selling shoes, where people come in, buy one two items and leave, you are in a business in which people buy dozens upon dozens of different items with each visit. Discontinuing (or failing to adequately stock) items that customers want is akin to cutting your own throat. When the list of discontinued or unavailable items that a shopper must buy elsewhere becomes large enough, the customer will simply go elsewhere for the whole shopping...and your loss of marketshare over the past few years should have amply demonstrated that. Pick n Pay is still the most convenient store, location-wise, to my home but until and unless you address this lack of stock issue, I am not going back.

**Sweet Violet**