- Retailing giant Pick n Pay Group has replaced CEO Pieter Boone with veteran leader Sean Summers.
- Boone has left the company immediately after the board of directors and he parted ways.
- The board says that the decision is based on challenging economic conditions and poor performance of the core Pick n Pay business.
One of South Africa’s top retailers has enacted a sudden change of leadership, as the Pick n Pay chief executive Pieter Boone steps down with immediate effect.
Boone and the Pick n Pay board of directors reportedly agreed for the former to depart the retailer due to concerns over the performance of the “Pick n Pay core business.”
According to a SENS announcement, Boone is then set to be replaced by Sean Summers who will be returning to the position, and South Africa, after 16 years away.
Summers was CEO of the Group from 1974 to 2007 and was chosen by the board to steer the ship once again in what is described as “a very difficult environment.”
“I want to thank Pieter for his dedication to Pick n Pay over the past two-and-a-half years. He became our CEO while the Covid pandemic was still raging, and has led the business through some extraordinary challenges, including the transition out of the Covid lockdown, the unprecedented civil unrest in 2021, and the current loadshedding crisis,” said board chairman Gareth Ackerman.
Ackerman adds, “Unfortunately, in a very difficult environment, the performance of our core Pick n Pay business has been very challenging over the past months, and has not met expectations. Pieter accepts that the Board has decided on a change in leadership. He leaves us with our heartfelt thanks and best wishes for the future.”
The announcement explores a bit more of the so-called challenging environment the retailer has faced in the last few months.
It says that a weak customer environment, cost pressures from loadshedding, muted sales at its supermarkets and gross profit margin pressures all managed to offset any beneficial growth of the company’s Clothing, Online, and Boxer segments.
The impact of these combined factors on Pick n Pay supermarkets has apparently been “significant.” Loadshedding costs alone, particularly diesel for generators, ran up to R396 million.
Pick n Pay isn’t alone in the struggle to manage growth in a hostile economic situation. Fellow retailer Shoprite Group said in September that it spent R1.3 billion on diesel to keep the lights on at its supermarkets in the previous quarter.
High inflation across the globe and high interest rates in South Africa in particular have consumers keeping their wallets on short leashes. This shopping downturn has affected luxury businesses the most, like buying expensive PC parts.
Over the coming weeks, incoming CEO Summers will physically move back to South Africa and will spend time analysing the business and meeting staff and customers.
“I am very excited to be coming home to Pick n Pay. Retailing is my passion, and this company is in my blood. I have great excitement and energy for the task ahead. I look forward to leading the Group back to the position it deserves,” enthuses Summers.
Despite the incoming veteran leader to the retailer, the Group says that it expects to face continued difficulties into the latter half of 2023.
However, it assuages investors that it foresees stronger future earnings due to holiday shopping at the end of the year and its Project Future initiatives starting to contribute to profits.