RETAILING: Pick n Pay, BP's Roll-Out Of Small Format Stores
Recent Western Cape Business News
Pick n Pay and BP Southern Africa (BPSA) have formally combined forces which will see the roll out of small-format Pick n Pay stores located at BP service stations in the major metropolitan areas across South Africa. PnP Express stores stock between 1,500 and 2,500 product lines and stay open 24/7, catering to the convenience retail market.
The two companies initially signed a memorandum of understanding in July 2008 and have been testing the model since opening the first two PnP Express stores in Hout Bay and Tokai in the Western Cape at the end of the same year. There are currently nine Pick n Pay Express stores on BP forecourts in South Africa.
The initial plan is for 120 BP Express stores to be converted to PnP Express stores over the next five years, although additional stores may also be converted after the initial five-year period. The roll out of PnP Express stores will concentrate on those BP sites which are most suitably located for Pick n Pay’s customers.
Both companies are confident that the dual format brings multiple benefits to the two companies, their franchisees, suppliers, and more particularly to South African customers who are in search of efficient and affordable convenience retailing.
Deputy CEO Richard van Rensburg says “this is a great opportunity for Pick n Pay to extend its brand offering to existing Pick n Pay customers and expose it to BP forecourt customers too. We’ve tested the format over the past three years and the feedback from customers is very positive.”
International experience suggests that small format stores often spur growth and most leading global retailers have a multi-channel presence, including forecourt outlets.
The agreement brings into play key strengths of both businesses, and enables Pick n Pay to expand its small store format while continuing to create new entrepreneurs, in line with its franchise strategy. “The combination of a BP site with BP’s premium fuels offering and PnP Express creates more of an incentive for customers to call on a BP site,” said Gerard Derbesy, BP Southern Africa CEO. “This is in line with BPSA’s growth and investment plans over the next two years.”
The agreement paves the way for significant enterprise development through the development of new and existing franchisees and will add value to BBBEE.
Chris Reed, franchise director at Pick n Pay, says “Express stores are small format franchise stores which while on BP forecourts, are instantly recognisable as Pick n Pay stores. Trading floor sizes are small and typically vary between 150m2 and 250m2.”
“Many Pick n Pay customers want to shop frequently in limited-offering stores that are convenient, well-located and easily accessible with longer trading hours, but they want competitive pricing too. This format provides all of this, and also allows customers to have easily accessible free parking, speed through the store and the tills and a full service offering.”
Between 1,500 and 2,500 product lines are available with the focus on convenience meals, pre-packed fresh fruit and vegetables, fresh meat, freshly baked bakery products, as well as a selection of hot foods, including pies, chicken and hot take-away meals. Groceries, including snacks, drinks and cigarettes, magazines and newspapers are also offered. Customers will also be able to use their Pick n Pay smart shopper cards throughout the network.
BP’s signature Wild Bean Cafes are part of the offering. Says Reed: “Wild Bean coffee is one of the top selling coffee brands in South Africa and will add value to the Pick n Pay Express offering.”
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