Family values are important to Richard Brasher, CEO of Pick n Pay and former head of Tesco, the giant UK supermarket chain. He talked to Leadership about these values that have stood the company well for 47 years, and his vision for Pick n Pay.
Richard Brasher’s success as head of Tesco in transforming the company into a global retail chain with a United Kingdom market share of over 30%, puts expectations on him to lead the transformation of the South African retail landscape.
Born in Hong Kong, 52-year-old Brasher was going to follow his father into a career in medicine. But having travelled the world while growing up, Brasher developed a liking for food, cooking and food products and decided instead to do a technology degree.
“I ended up doing technology, but I realised it is hard to run a business as a technologist, as people who are good at business usually come from marketing, sales or finance.”
This led to Brasher working in finance at Unilever before joining Tesco in 1986. “I realised that although finance is a very important part of business, the excitement lay in marketing and the day-to-day interaction with customers.”
He joined Tesco just at the time UK retail was changing, and his background in finance and manufacturing paid off. “It was at the beginning of changes in Tesco and I had a very happy and enjoyable 26 years with what I still believe to be a great company.”
Having successfully transformed Tesco, Brasher joined Pick n Pay in February 2013, packed with innovative ideas – but does he have the same, or greater, plans for Pick n Pay?
“Yes, I always have a plan. A man without a plan lacks direction and I think a company without a plan is planning to fail. We have been energetic – we have improved the management of the company.
“We are focusing on customers because they will lead us to the right place. We have also put in tighter financial controls, which has resulted in us performing a little bit better in our last results. We have a very clear plan, both short term and long term.”
Brasher explains that a significant number of improvements occurred at the same time, when it centralised its buying and distribution, putting in a new information technology system and launching the loyalty card, which was a massive transformation and strain for Pick n Pay after 10 years without change.
“The big change in the organisation over the past 12 months is that we have spent most of our waking hours listening to what customers want and working out how we can give it to them.”
He says that part of his plan is to make use of the investment the company has made rather than seeking to make new ones, by making the supply chain work, improving availability of products, sharpening its pricing and giving customers what they want.
“Raymond Ackerman founded the business with family values, and that’s one of the reasons why I came. Funnily enough, with Tesco it was never necessarily about being big or beating people – it was more like realising that it is just about the customer and if you get close to them you understand them and you give them what they want.”
Brasher explains that if you give customers what they want, they will in return shop with you and then all the other things people measure – whether it is market share size, turnover, or profit – stem from that.
Pick n Pay’s final results to February 2014 were released in April and were a substantial improvement on February 2013’s annual results. However, Brasher says the board was encouraged, but not satisfied by the figures. “We’ve made a modest improvement in our trajectory, we’ve been dropping profitability for the past couple of years, all working hard with the changes we’ve made – but I think the hard work has now started to show.
“We have a clear plan; people have got used to me being around for the past 14 to 15 months. Customers expect more of us, the market expects more of us, our suppliers expect more of us, our shareholders have always expected more of us, and so in a way it is quite an exciting year for us.”
Commenting on the economy, Brasher agrees that 2014 is not going to be a booming year for business, as there are still some issues the country faces. “I have always been an optimist. If you get up being pessimistic, it probably will be bad, but if you get up being optimistic, it doesn’t make it always great, but it means you have a happier life.
“So we’re optimistic, we know it is not going to be straightforward. We haven’t said, ‘well that’s it, we’re back’ – we’re not, so we have to get fitter, stronger, more determined, and I want the customers to see more of a change.”
Although Pick n Pay’s profits have improved and the markets have rewarded its share price, Brasher wants to see improvements that are customer-led, with customers saying that Pick n Pay has become better.
Pick n Pay’s long-term plans are to continue to improve the customer shopping experience by having shops where people live.
“The idea that Pick n Pay has completely covered the country isn’t true at all. Therefore we opened 110 stores last year and we will open another 110 stores this year, going into places where we have not given people the opportunity to shop with us before. That is an important part of going to a community.”
The retail chain has created employment for 5 000 people in its new stores and Brasher explains it is important that the company provides a level of employment for people who want to join Pick n Pay, whether they have graduated from university or whether they have no formal qualification.
“The great thing about shop keeping is that if you are very good at it, it is very obvious and so you get on and so we create a meritocracy for people. I don’t mind if they have an MBA from Harvard or they just have a natural instinct to run a business or shop. I am very happy with people who have been through the educational processes and I’m not about eliminating them – it is about including people.”
Brasher says what he was most proud of at Tesco was creating a meritocracy, which is what he would like to see happening at Pick n Pay, where everyone is welcome, people can join the business in different capacities, but ultimately get on in the business because they are good at it.
“Not because of who you are, who you know, what you look like and what qualification you’ve got. If I need someone to go and redesign the algorithms of our ordering process, I would probably need a qualified mathematician, but I probably wouldn’t put the qualified mathematician in charge of my produce department.”
Talking to Brasher, it is obvious he is passionate about people, whether they are customers or staff and the commitment that he and the Pick n Pay board want to play in improving people’s lives and that of their communities.
Brasher explains that all retailers, and especially Pick n Pay, have an ambition to give something back to the communities they serve. “Raymond and Wendy have had a long history of making a contribution, either championing things on the behalf of the community, or giving back when they have done well. I like that about business. The other thing I think is that communities are stronger: you may lament the passing of some community values in South Africa, but they are a lot stronger. I see strength in communities, even if they have less – which I haven’t seen in parts of Europe for decades.”
Brasher says it is a unique experience for him to see the dependency within families in South Africa, where one wage earner is often responsible for a larger family group. “I think Pick n Pay’s place in communities is very important to us as a company, especially the family value element that should not be exploited.”
So what do customers want and how does Pick n Pay meet these requirements? According to Brasher, every customer, irrespective of affluence, wants products to be fair value and to receive a level of service they would want for themselves.
“That is not negotiable. But if I’m looking at a store in the centre of Polokwane, the requirements of the customers there are different than if I look at the store at the (V&A) Waterfront, with international visitors and people from the Atlantic Seaboard. So the great thing about retail is, you are only as good as your local shop.”
Brasher would like to see Pick n Pay as a brand of aspiration, with customers feeling good about their shopping experience because the store has provided them with the right balance of price, range, quality and service. Although these qualities mean different things for different people, Brasher says that if Pick n Pay tailors its proposition to the people in that community, he is confident the brand has the breadth to attract people, whether they have slightly less or slightly more.
“What I don’t want us to be, is a brand where we position ourselves and say, ‘this is who we are and if you don’t like it, you can go somewhere else.’ We have to be more of a chameleon: if you look at our stores at the Waterfront or On Nichol (Sandton), they would stand muster with any store in Europe.
“But, there are things in those stores that a group of customers from a less affluent community wouldn’t want and therefore it would become less relevant and would be less familiar and less welcoming. So we have that challenge that we want to be a business for every South African. We should reflect the communities we serve and make sure the underlying values are the same wherever we trade so that people can trust us.”
Brasher explains that it is important the chain continues to be relevant to the lives of its customers, whether it is an express store at a filling station, a refurbished hypermarket where you go for a big monthly shop, or a special one-stop shop. “We also have an online business, so we will deliver your groceries to your front door. We are moving increasingly into services, so if customers want to, we can transfer their money, help them pay their bills, buy airtime and help them with financial services. I think retail has found the services market a comfortable place to be in – it is not just about the grocery and general merchandise market anymore.”
As customers are under pressure because of inflation, Brasher feels that retailers have an obligation to fight against it. “It isn’t a foregone conclusion that inflation has to be, but the challenge we have is to make sure we can improve productivity so that we can reduce costs and keep prices down, so we can challenge markets and industries, in spite of some rising issues to do with exchange rates, or the price of oil or the price of energy.” Brasher adds that when Ackerman opened Pick n Pay discount stores, he was already championing causes such as lower petrol and bread prices.
He is most excited about the return of family values and putting back more than what is taken out of the company. “If we do that, we will have a place of benevolence in the hearts of customers – and if we do that, we will be successful.”