Pick n Pay eyes fuel stops
Business Day - Apr 24th 2012, 08:34
Pick n Pay was now "well placed" to fulfil its founder Raymond Ackermanâ€™s dream of free-market petrol prices, thanks to a deal with BP Southern Africa, a company spokeswoman said yesterday.
The partnership will see the rollout of 120 PnP Express stores at BP service stations in the major metropolitan areas across SA over the next five years.
Despite many years of hard campaigning, SAâ€™s petrol prices remain government-controlled and price competition between garages is outlawed.
Mr Ackermanâ€™s campaign for petrol price competition came a step closer yesterday, Pick n Pay spokeswoman Tamra Veley said.
The rollout of the small-format stores would focus on BP sites "most suitably located for Pick n Payâ€™s customers", SAâ€™s second-largest supermarket group said.
The two first signed a memorandum of understanding in July 2008 and opened two PnP Express stores, in Hout Bay and Tokai in the Western Cape, at the end of that year. There are now nine in SA.
Deputy CEO Richard van Rensburg said it was a "great opportunity" for Pick n Pay to extend its brand offering to existing customers and expose it to BP forecourt customers. "Weâ€™ve tested the format â€¦ and the feedback â€¦ is very positive."
Between 1500 and 2500 product lines are available, with the focus on convenience meals, prepacked fresh produce, fresh meat, baked goods, and a selection of hot foods, 24 hours a day, seven days a week.
Customers can also use Pick n Pay loyalty cards.
Woolworths has a similar partnership with Engen and Caltex with Fruit & Veg City.
Nedbank Securities analyst Syd Vianello said Pick n Pay should focus on existing problems before getting involved in the forecourt business.
"I donâ€™t believe it will make much money from it."
He said it would add another layer of fees for the operator of the site, who already pays fuel companies and supplier rebates.
Pick n Pay could be hoping, as Woolworths has done, to extract value for its own-branded goods, but it did not have the range to make inroads, and its distribution model was not geared towards it. "If the real objective is to discount fuel â€” it would be an extremely difficult business."
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