The Pick n Pay CEO Pieter Boone and senior management flew to Johannesburg to meet senior leaders of the EFF on Monday after allegations that the group had left black franchisees in debt and mistreated them.
In August, EFF leader Julius Malema threatened Pick n Pay and said the political party’s members would shut all Pick n Pay stores in SA. He accused the retailer of using black people to open stores in their communities that then failed.
In SA, Pick n Pay has 773 franchisees and 1,244 company-owned stores in its grocery, clothing, liquor and Boxer brands.
The EFF delegation at the meeting was led by deputy president Floyd Shivambu and treasurer-general Omphile Maotwe, while Pick n Pay was represented by Boone and lead independent nonexecutive director Jeff van Rooyen.
The EFF is able to garner the attention of companies and intervene in labour disputes after it led protests and vandalised Clicks stores in 2020 in response to a hair advert interpreted as describing white hair as normal. It also ransacked H&M clothing stores in 2018.
Pick n Pay met with the EFF team and about five former franchisees, and agreed to set up an independent investigation led by a senior advocate. Pick n Pay said in a statement it will “review the company’s actions, policies, and conduct, in relation to its franchise and market store scheme, and in particular the outcomes for former black franchisees”.
The investigation will examine a scheme run from 2017 to 2021, which invested in converting small spaza shops and independent retailers into Pick n Pay stories, with some failing.
Pick n Pay will stop legal action against one franchisee over unpaid funds to the group, it said. The company agreed to meet former franchisees and store owners personally if possible to discuss grievances transparently. In some cases stores may have lost money or have been sold by franchisees.
The senior counsel and the scope of the inquiry are still to be decided and will be agreed upon by both parties.
EFF spokesperson Sinawo Tambo said the agreement to “build trust and consensus was mutual”. The unhappiness stemmed from some black franchisees struggling in townships, operating at a loss and then being left financially crippled or in debt. Shivambu and Maotwe will continue engagements with the retailer.
Pick n Pay said “all parties appreciate that the allegations made require urgent attention and are committed to this process in good faith”.
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