New kid on the block

Having tucked its labour dispute into bed last week, Pick n Pay is powering forward and, well…downward. On Tuesday, the retailer unveiled its pilot C-format store - Pick n Pay Daily - at the Worldwear Centre in Johannesburg.

The convenience store is all about easy reach and time-saving. With its limited product offering and its emphasis on ready-prepared meals, fresh produce and grab-and-go drinks, the C-store is a product of the global retailer’s keeping pace with increasingly time-governed consumers for whom choice has become secondary to accessibility.

The supermarket shrink trend is particularly evident in the US. An article published in The New York Times this month bemoans the hassle that “miles of aisles” presents to the time-starved shopper who knows exactly what he wants as he enters the store. The figures abbreviate the story. For the first time in 20 years, the average grocery store size dipped - by some 38 000 square feet - in 2007, while the average grocery shop now lasts 22 minutes. The pulling power of assortment is clearly on the wane.

The C-store is a ‘smart’ stop whose limited product offering and easy-to-park-and-shop features enable the consumer to get what he needs when he needs it. And, according to research conducted by Pick n Pay, it’ll be the obvious shop-stop for the retailer’s core consumers in the higher LSM brackets, for whom several shopping trips a week is already a given.

Growing at approximately 14% pa, the convenience store format is the fastest growing segment in the retail market, but it’s also a risky time to downsize. Consumers’ ‘flight to value’ at the bigger store formats, as well as the smaller store’s higher staffing costs per square metre, cannot be ignored. Then again, at an average size of 850m2, and with a carefully balanced fresh food/grocery offering comprising some 6 500 product lines, Pick n Pay Daily may strike the elusively happy medium.

Either way, the newcomer will pose an interesting challenge to Woolworths, which has led the convenience store movement in South Africa and which has recognized the need to increase the size of its smaller franchise stores. Competition is always good news for the consumer and, with the Pick n Pay-BP joint venture to launch in November this year, Pick n Pay will be able to meet its rival at the critical forecourt level too.