Franklins takes a strong stand to stay competitive
stay competitive
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PICK 'n Pay's Australian business, Franklins, cannot be expected to break even in the second half of the current financial year.
That was the blunt message to analysts from group CEO Sean Summers yesterday.
He said it would not be difficult for Franklins to achieve break-even, but that is not the group's strategy. It is vital for Franklins to remain competitive in Australia's tough food markets so it cannot afford to take a shortterm view.
The two major Australian retail chains, Woolworths and Coles, have recently changed the focus of their advertising from "warm and fuzzy" to "product and price" in response to Franklin's challenges on pricing, he says.
In the next few months Franklins will be spending money on an aggressive "no frills" advertising campaign to emphasise value on key basic items like kitchen rolls, long-life milk and orange juice.
Recently Pick 'n Pay hosted a number of Australia's major wholesalers in SA to show them Pick 'n Pay's operations (and presumably what it intends Franklins to become) and the manufacturers indicated they were aware of the importance of growing a third major Australian retailer in their own interests.
However, it will be interesting to see whether Australian manufacturers will or can afford to give Pick 'n Pay what it wants, which is the same trade terms as Woolworths and Coles are getting
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