Pick n Pay this week announced its first “spaza-to-store conversion” in Diepkloof, Soweto.
Solly Legae’s Monageng Market has been operating in Diepkloof since 1972, but is now a Pick n Pay franchise – having undergone a complete upgrade and refurbishment sponsored by the retail giant and a number of its suppliers.
That Pick n Pay is rolling out a new experimental franchise system partnering with spaza shop owners, just as competition authorities start an inquiry into how supermarkets are killing spaza shops, is “completely coincidental”, said Pick n Pay head of franchise Chris Reed.
The process started long before the Competition Commission announced its new retail inquiry in July last year, he said.
If the first one works, it was entirely possible that Soweto could host up to 100 of these conversions, he added.
“If the pilot project works, there is no reason not to make it part of the Pick n Pay brand.”
That would mean selling Pick n Pay’s house brand products and rebranding the shop as a Pick n Pay.
Success will be determined by Legae making more money than before – and Pick n Pay having its brands “represented correctly and accepted by the community”.
The conversion model is a partnership with Gauteng’s department of economic development.
The idea is that the department can rehabilitate local government properties where spazas are tenants as part of its Gauteng Township Economy Revitalisation strategy.
The province would contribute to the upgrading of the property into a Pick n Pay store, said Reed, adding that government would provide a list of properties which Pick n Pay would match to its existing network to choose candidates.
The idea originated with a Pick n Pay franchisee, Bonnie Sachane, who operates a store in Protea Glen, also in Soweto.
The model got refined and the experiment with Legae had been about a year in the making, said Reed.
Sachane is now supplying Legae’s store through his franchise and is also providing mentoring, according to a Pick n Pay press release.