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Technology is killing jobs at Pick n Pay – but that’s not the whole story

Retailer Pick n Pay said in business and trading statement on Monday that it has removed a chunk of its roles and functions due to improvements in technology, among other things.

“Through its work to improve the efficiency and productivity of its workforce, the group identified opportunities earlier this year to remove around 10% of its roles and functions across its Pick n Pay head office, regional structure, store operations and supply chain.

“These roles and functions were no longer required due to improvements in organisation, planning and technology,” the group said, adding that the programme had been completed.

To remove these roles and functions from the business, the group said it embarked in April this year on a voluntary severance programme (VSP), through which employees were offered
1.5 weeks of pay per completed year of service, plus four weeks of notice pay.

Pick n Pay employs 54,000 people in its company-owned stores and operations, while its franchise stores extend this to over 80,000 people in seven countries.

In September, Pick n Pay became the first retailer to trial self-service till points at its stores. “We see it as an additional service which would complement rather than replace the traditional checkouts. Staff are required to monitor self-service checkouts and there is no impact on employment. Pick n Pay is increasing, not cutting jobs, and is committed to creating 5,000 new jobs each year,” it said at the time.

And to show how technology can be a job creator, the retailer earlier this month launched its online distribution centre in Gauteng, having launched a dedicated online warehouse in the Western Cape in 2016.

In the past, orders placed by Gauteng customers via Pick n Pay Online were fulfilled by a store close to the customer’s location.

On Monday the group advised that the cost of VSP payments made to employees have arisen in the first half of the financial year, and will not be fully recouped by the close of the
half-year.

As a result, the group said it expects headline earnings per share for the 26 weeks to 27 August 2017 will be down more than 20% (or 17 cents) on the reported 82.43 cents of the previous corresponding period.

Earnings per share are estimated to be down more than 20% (or 16 cents) on the reported 78.69 cents of the previous corresponding period.

Richard Brasher, chief executive officer said: “The Voluntary Severance Programme is one of several steps we have taken to make our business more competitive in what is a tough trading environment.”

“For reasons of timing, it will have a material impact on our H1 Result. But it has made us a leaner and more efficient business, and the reduction in our costs will give us more headroom to provide customers with even lower prices and better value. Our plan is on track and we are a stronger and more sustainable Group as a result.”

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