| Mon 20 Oct 2008, 16:04 | | PICK `N PAY STORES LIMITED - Pick N Pay BP announ |
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PIK
PIK
PICK `N PAY STORES LIMITED - Pick N Pay, BP announce partnership in pilot scheme
Strengths to be pooled to offer customers first-ever experience
PICK `N PAY STORES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1968/008034/06)
Share code: PIK
ISIN code: ZAE000005443
("Pick n Pay")
PICK N PAY, BP ANNOUNCE PARTNERSHIP IN PILOT SCHEME
Strengths to be pooled to offer customers first-ever experience
(Cape Town, 21 October 2008) South Africa`s leading food retailer, Pick n Pay,
and leading petroleum company, BP, have combined forces in a pilot programme set
to change the face of petroleum retailing and convenience shopping in South
Africa.
While a formal agreement between fuel and convenience retailers is not new to
South Africa, what is different about this agreement is that Pick n Pay will not
only retail convenience goods on the service station forecourt, but will also
retail fuel. BP will act as landlords and as fuel wholesalers, with Pick n Pay
as the franchisee.
The two companies, which signed a memorandum of understanding in July, will open
two pilot sites in the Cape by the end of 2008. Roll out will be dependent on
success of the model, but both companies are confident the joint venture will
bring multiple benefits not only to the two companies, but especially to South
African customers increasingly pressed for time and in search of efficient and
affordable convenience retailing.
The roll out would involve further expansion concentrated on BP`s top national
sites, with the existing BP Express stores being phased out.
Diesel will be discounted from the first day of trading. Petrol, which remains
strictly regulated by government, will be sold at the prevailing price until
such time as government loosens its control on fixed prices.
The new convenience stores will be known as Pick n Pay Express, and will stock
just over 1,500 lines, staying open 24/7.
The agreement brings into play key strengths of both businesses, and will fulfil
the need for Pick n Pay to expand its small store format while creating new
entrepreneurs and ensuring the sustainability of small businesses.
In terms of the agreement between the companies, which involves both existing
and potential new sites, BP is to act as landlord and fuel supplier, and Pick n
Pay is to act as the tenant, operating both the forecourt and the on-site Pick n
Pay Express convenience store. Where an existing BP franchisee has tenancy, the
franchise agreement will, by agreement be converted to a Pick n Pay Express
franchise.
Pick n Pay Express stores are intended to replace the current BP Express stores,
offering a range of Pick n Pay fresh and convenience items, specifically
identified to meet the needs of convenience shoppers, including a Wild Bean
Cafe.
"This is one of the most exciting retail initiatives in which Pick n Pay has
become involved in many years, and will be an important part of our plans to
increase our convenience offering to our customers, which is an area of great
potential growth," says Pick n Pay CEO Nick Badminton. "Our research has shown
that our shoppers want more convenience, both in terms of ease of shopping and
location - and Pick n Pay Express, in conjunction with our other small store
formats, will give them just that.
"BP is South Africa`s most admired fuel retailer and by entering into a
partnership with them, we will be able to offer our customers the essentials
they need, where they need them - in a one-stop offering. And in these times of
skyrocketing fuel prices, we believe that motorists will leap at the opportunity
to buy discounted diesel. Our chairman, Raymond Ackerman, has for decades
promoted the idea of selling discounted fuel - and while we by law cannot sell
cheaper petrol yet, we will be allowed to sell cheaper diesel."
Says BP`s CEO, Sipho Maseko: "BP has been acknowledged by customers as a leader
in fuel and convenience retailing and this is due to our focus on providing
innovative solutions for customers through our fuel and convenience offers. This
partnership with Pick n Pay is yet another proof point of our passion with
innovation and with keeping our leadership position in the forecourt channel.
"It will be a logical build on the strong platform that BP Express has created
but we are convenience that partnering with Pick n Pay will take our offer to
greater heights. BP will focus its core capability on maintaining our leadership
in fuel.
"In addition, our agreement paves the way for extensive enterprise development
through the building up of existing and new franchisees, particularly in small
and medium-sized business development, and it holds great promise for the
advancement of black economic empowerment.
"This agreement, therefore, represents a win-win situation for all stakeholders:
Pick n Pay and BP can maximise their business opportunities, consumers benefit
in terms of convenience and fuel prices, and entrepreneurial development gets a
welcome shot in the arm."
For further information, please contact Tamra Veley on 083 251 3658.
21 October 2008
Sponsor: Investec Bank Limited
Date: 20/10/2008 16:04:10 Produced by the JSE SENS Department.
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