South Africa’s Pick n Pay initiated a voluntary severance package (VSP) in April to remove 10% of roles and functions in its business because of improvements in technology.
The retailer said on Monday in its trading update published on the JSE that the VSP is now complete and the company has removed close to 10% of roles and functions.
“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 first half result,” said Richard Brasher, CEO of Pick n Pay.
“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.”
Through its work to improve the efficiency and productivity of its workforce, Pick n Pay 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 company said in a statement.
The retailer informed investors that the financial benefit of jobs cuts is to be realised from the full year 2019 onwards, with significant positive impact on operating costs, making it more competitive and sustainable.
In April 2016, Pick n Pay announced plans to invest into a dedicated picking warehouse in Gauteng as it looks to cash in on the surge in popularity of internet grocery shopping by customers in the country’s richest province.
The supermarket chain’s online business in the Western Cape has already benefited from the dedicated picking warehouse established at the Brackenfell Hypermarket.
In last November, Pick n Pay was the first local retailer to introduce tap-and-go technology in its stores to reduce queues at tills.