Pick N Pay Opens First Store in Maputo

23 June 2011

Maputo — The South African supermarket chain Pick n Pay on Wednesday night inaugurated its first store in Mozambique, near Maputo International Airport.

The company intends to open two more stores in Maputo, one in the heart of the city and one in the outlying suburb of Zimpeto, in the near future. One of the Pick n Pay managers told AIM that within a decade the company hopes to have 30 stores in Mozambique, for a total investment of around 100 million US dollars.

Pick n Pay is the third major South African supermarket chain to open stores in Mozambique. The first to explore the Mozambican retail market, in the late 1990s was Shoprite, followed a few years later by Game, which specializes in electrical goods.

Addressing the inauguration ceremony, the Pick n Pay Chief Executive, Nick Badminton, said that opening the Maputo store “marks another step in Pick n Pay’s strategic decision to move away from being a South African company to being an African company that has its head office in South Africa”.

“The southern African market is becoming an increasingly attractive market for us”, he continued. “As disposable incomes continue to grow, the region’s retail potential remains largely untapped, and there is considerable opportunity for foreign investors who are willing to enter into constructive partnerships with local communities and government agencies”.

Badminton said Pick n Pay has become “increasingly impressed by the boundless potential that exists on the continent. Rapid urbanization rates, expanding labour forces, growing middle classes and political stability in most southern African economies provide irresistible opportunities for the meaningful expansion of the retail sector across the sub-continent and beyond”.

Opening a store in Maputo, he claimed, “is not only an act of commercial expansion, but an expression of confidence in Mozambique’s economic future. It is an acknowledgement of the fact that, beyond the boundaries of South Africa, there is a rapidly developing community of consumers who are seeking a new shopping experience that offers value convenience, choice and exceptional service”.

Pick n Pay promises to source much of the goods it sells from local suppliers. The Pick n Pay Group Enterprises Director Dallas Langman said that, of the 11,500 items currently on sale, “30 per cent are from local suppliers or agents and we will not rest until this figure is in excess of 50 per cent”.

However, the Mozambican agents are usually selling goods that were made in South Africa. The Pick n Pay manager who showed reporters round the store admitted that only seven per cent of the items are actually made or grown in Mozambique, with the figure rising to 30 per cent for fresh fruit and vegetables.

Pick n Pay has reached a franchise agreement with the company Retail Masters, chaired by Eduardo Mondlane Jr. Badminton claimed that Mondlane, and the Retail Masters CEO, Al-Noor Rawjee, “have been invaluable partners in Pick n Pay’s ability to understand and adapt to the demands and expectations of the local market.

The 3,500 square metre store is already employing 250 Mozambican workers, and as the other Maputo stores open the number is expected to rise to over 500. “We have committed ourselves to the rapid promotion of Mozambican nationals to senior management positions in our operations in the country, thus ensuring that Pick n Pay Mozambique becomes a genuine national asset”, said Badminton.

Of course, Pick n Pay will only be successful in Maputo, if it can keep its promise to offer food and other household items “at the lowest prices”.

Here the picture is decidedly mixed. While some items, such as fruit juice and margarine, are considerably cheaper than in competing stores, there are others for which the prices can only be described as extortionate.

A single cabbage is selling for 59 meticais (about two US dollars) – in Maputo markets, similar cabbages cost 10 or 15 meticais. Similarly, Pick n Pay is charging 60 meticais for a kilo of tomatoes – the price in the market near the home of one AIM journalist is 35 meticais.

The Pick and Pay price for potatoes is 99 meticais for two kilos – which would cost 70 meticais in the market.

The consumer will pay 29 meticais for six bread rolls at Pick n Pay – six rolls straight out of the oven at a central Maputo bakery cost 12 meticais.

AllAfrica – All the Time