Johannesburg - A large supermarket chain that had invaded the township market amid much fanfare has admitted that the business model was a mess.
But while Pick n Pay exits the venture smiling all the way to the bank, the township business owners are saddled with millions of rand of debt.
On its website, Pick n Pay sold its involvement in the township economy thus: “Since 2016, Pick n Pay has led a collaborative partnership with government and other strategic partners to help revitalise small, independent township grocers to regenerate their stores and turn them into thriving neighbourhood convenience stores.”
At present, the township stores are falling like dominoes. In January 2023 alone, eight of these stores had to shut their doors, their employees thrown to the wolves.
They are: Pilgrims (17 January 2023), Linda’s Market (20 January 2023), Lebo’s Market (26 January 2023, Paltii Market (30 January 2023), Proper’s Market (26 January 2023), Nabe Market (27 January 2023), Mbekweni Market (27 January 2023) and Wabo’s Market (27 January 2023).
Additionally, the death knell was also sounded on the commercial dreams of the following stores: Lethabo, Nozinga, Phenyo, Osizweni and Luzukile.
Altogether, 13 stores were shut nationwide.
It does not matter which store owner one speaks to – their stories of woe are the same. Pick n Pay made money, the township entrepreneurs lost money through this deal that was punted as the biggest thing ever to happen to the township economy by the supermarket chain.
Sicelo Thuketane, whose store Lethabo’s Market in Bramfischerville, was looted clean on July 12, 2021 could only stand by and watch as the insurance payout from (Sasria) was diverted to Pick n Pay, which swiftly took R480 000 it claimsLethabo’s Market owed it for stock.
Thuketane says he is sitting with debt amounting to R10 million while Pick n Pay is sitting pretty from his sweat.
The small township entrepreneurs who signed up for the Pick n Pay local economic development franchise remain saddled with debt while the franchisor is smiling all the way to the bank.
Whenever the stores made money, even the tax refunds from the South African Revenue Service (Sars), Pick n Pay took the money.
Phure Motshabi of Phenyo Supermarket (known as Phenyo Market Store during the short-lived deal) in Kagiso, west of Joburg, gripes about the Sars refund that he claims the supermarket chain removed from his bank account “without my permission”.
This is the common denominator among all store owners.
Sometimes when they bit off more than they could chew – took more than what was due to them – Pick n Pay returned the surplus sum to brokers Marsh, who had no business getting the money in the first place.
Motshabi blames all his current debt – in excess of R9m – on the franchise deal. “Before Pick n Pay came on board, I did not have a single creditor. I ran my business on a strictly cash basis.”
Creditors like the Small Enterprise Finance Agency (SEFA) are knocking on the doors of the frustrated store owners, calling in the debt.
It matters not to the creditors that the township businesses are no longer trading. “They want their money,” Thuketane says.
An EFF delegation led by party deputy president Floyd Shivambu met with both Pick n Pay and the store owners last September to try to mediate in the impasse.
The store owners are wondering why the vocal party that had threatened to “shut down Pick n Pay” if the store owners were not heard has suddenly gone quiet on the matter.
The Competition Commission, to which the store owners complained, has not offered much help, according to the beleaguered former franchisees.
In a correspondence, the commission writes: “As previously communicated during our update meeting, your complaint is still under investigation. The period allowed for the investigation of a complaint of this nature is 12 months unless such is extended by agreement. The period of investigation of this complaint will come to an end by 08 March 2023. It is apparent that the commission will not be able to complete its investigation within the allocated time and we request that you agree to the extension of this investigation to 08 March 2024.”
It has been three years now since the complaint was lodged with the commission, Thuketane laments.
To add salt to injury, Pick n Pay has written settlement letters to the affected store owners, offering to write off their debt. “This is what they say we owe them,” says Thuketane. “It doesn’t matter to them who else you owe. And they want you to sign a non-disclosure agreement and just walk away. How do I stop talking about Pick n Pay when I am in this mess because of them?”
In the settlement offer that many store owners are refusing to sign (some have), one line says: “You shall not make any written or oral statements injurious to or of a disparaging nature about Pick n Pay, any associated companies, or the Pick n Pay’s directors, employees or business associates. Pick n Pay shall likewise not make any written or oral statements injurious to or of a disparaging nature about you.”
Contacted for comment on Wednesday, Janine Caradona, speaking for Pick n Pay, first asked: “What is your deadline, please? Please also advise who you are writing for.”
Later she responded: “I will revert soonest with a comment but it likely won’t be by COB (close of business), unfortunately.”
When she eventually responded, it was with a statement she insisted must be ascribed to Pick n Pay: “We have been informed that Mr Motshabi has opened a case of fraud, but have not been given any further the details. We strenuously deny any such claims. Every financial transaction with a store owner is conducted with the full knowledge, authority and approval of the owner concerned.”
The Star