Extortion knocks Pick 'n Pay's share price
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Industrial Reporter
RETAILER Pick 'n Pay's share price took a knock for the first time yesterday since it went public with details of an extortion bid involving poisoned food a week ago.
The share closed 3,63% lower at R14,60 on the JSE Securities Exchange SA after it became clear that the incidence of poisoned items had become more widespread and that police were no closer to catching the culprit.
Pick 'n Pay offered a R5m reward at the weekend for information leading to an arrest and conviction, after the extortionist's efforts moved to Durban, and to a fourth product.
Pick 'n Pay group CE Sean Summers said yesterday he was far too busy dealing with customers' concerns to track the company's share price, but pointed out it was still above the R13 closing price of a week ago. A retail analyst warned that if the campaign against Pick 'n Pay continued, it would threaten not only the supermarket chain, but other grocery retailers as well.
SCMB Securities retail analyst Evan Walker said Pick 'n Pay's rivals Woolworths and Shoprite would have to consider increasing their security if the attacks continued for a lengthy period of time. If this happened, it would push up costs for all retailers and these would eventually be passed on to consumers.
Walker said yesterday's 55c drop in the share price was an indication that there was "concern" that the attacks might not be as shortlived as was initially thought. Walker said he believed informing the public of the attacks was the right strategy as it meant Pick 'n Pay customers were also "policing" stores
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