“The team” and “remarkable” were words Pick n Pay CEO Richard Brasher repeated often while presenting the retailer’s annual results.
He could have stuck to numbers and a serious drop in profit amid the challenges in Africa, increased operational costs and local tax challenges, but Brasher’s results presentation was a lesson in leadership as he paid tribute to the staff on the front-line serving people who could possibly expose them to Covid-19.
He spoke with appreciation of cashiers and store staff: “We don’t pay people a lot and the work is repetitive.”
Speaking of the response to Covid-19, which has included increased hygiene needs, store closures and waves of panic buying amid some supply chain disruptions, Brasher said: “In the worst of times you find the best of people. The performance of the team has been nothing short of remarkable.”
Pick n Pay had to ramp up its online shopping and delivery in a bid to reduce queues in stores. It enlisted the help of a number of delivery platforms, including Bottles, an app-based alcohol delivery platform. Brasher said Bottles created an online Pick n Pay store in four days on a minimal budget, a process that would have have taken R100m and a year to do in ordinary times.
Brasher also paid tribute to franchise store owners’ customer service and innovation. It is franchises that created drive-through systems so consumers could pick up shopping ordered online without needing to go in store.
“They have lessons for us.”
During this difficult time for companies and workers, words of appreciation and assurance to staff go a long way.
UK property funds may be ripe for the taking
As the UK’s economy starts to open up again, some British property funds are likely to be takeover targets.
These funds are trading at steep discounts to their net asset values (NAVs) largely as a result of uncertainty around the Brexit process. This suggests that if the UK economy can gain momentum, at least in late 2020 or early 2021, property funds are going for a song.
Many landlords with retail assets have seen their tenants struggle for years as consumers switch to online shopping. As much as 21.9%, more than a fifth of total retail sales, in the UK in March were online, according to the country’s Office for National Statistics.
E-commerce has been further boosted by the lockdown aimed at curbing the spread of Covid-19, resulting in the closure of stores not selling essential products. The pandemic has exacerbated problems for these tenants. It’s also put a dent in the rent of some landlords as tenants seek relief.
One JSE-listed property fund that stands out as a potential takeover target is RDI Reit. Formerly known as Redefine International, the UK-focused, diversified property group released financial results this week and said its decision to spend a couple of years disinvesting from retail assets had paid off. The company owns warehouses, hotels and offices.
Its vacancies are lower than those of its retail focused peers.
CEO Mike Watters said RDI’s balance sheet is healthy with its loan-to-value ratio at 41.8% and about £85m (R1.9bn) in cash on hand at the end of April. Perhaps some larger property funds might make a play for RDI instead of gambling on a retail landlord.
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