By: Tebogo Mokwena
Retail giant Pick n Pay (PnP) has come under fire by the Portfolio Committee for Small Business Development for not supporting enough black-owned businesses in their Enterprise Supplier Development budget. PnP was also criticised for its franchises and market stores, which according to committee members have left many small businesses in debt.
It was also slammed for what the members perceived as bullying tactics towards small businesses in townships. PnP met the portfolio committee on Wednesday to discuss how it supports small businesses through its various support programmes. The company’s retail executive head of environmental social governance, Vaughan Pierce, told the meeting that PnP has spent billions on supporting more than 4000 SMMEs in recent years.
However, committee member Faiez Jacobs lashed out at the retailer, describing these numbers as poor and saying that the amount of money it had spent was inconsequential. He also criticised the company for not supporting black small businesses. “You spent R50 billion on SMMEs in 2020, and out of that R50 billion, only 4% was spent on Broad-Based Black Economic Empowerment,” he said.
“This means that not even 10% of your budget goes to black-owned SMMEs. “Given the challenges, there is growing resentment that all of these big companies make a profit and do not plow back, and the small budget you spend is inconsequential and does not add value,” he said. Jacobs also said a notion existed that PnP bullied SMMEs. “The PnP franchise model makes it very difficult for black business owners, and a lot of the black franchises are left with big debt,” he said.
“We need a greater sense of township revitalisation and PnP has to play that role,” Pierce responded by saying that the franchise models were currently in the process of being changed. “The initial franchise agreements were established in the 80s, and we are currently in discussion with our 900 franchise stores, our BP stores and the market stores,” he said. Pierce also responded to questions about the market stores, which have received a lot of media attention recently for the allegations of anti-competitive behaviour and poor quality of goods provided by the stores.
He said the retailer was in talks with market store owners and the EFF, which had brought these matters to its attention. “All of these stores are not PnP stores but are sponsored by PnP,” Pierce said. “The story of these stores is a lot more than is reported in the media, as some of the store owners (are in debt) because they were paying themselves salaries of R100,000 to R200,000.”