Question 2 (Marks: 45) Read the following case study and then answer the questions that follow: South African retailer Pick n Pay banks on discount stores to grow South African retailer Pick n Pay may double the number of its Boxer stores to 600 within five years to target underserved low and middle-income shoppers, David North, head of strategy and corporate affairs, tells The Africa Report. Growth will be in the mid to low value segment, says North, based in Cape Town. The new stores will be spread throughout South Africa and will target in-person rather than on-line shoppers, he adds. Boxer offers a limited range of discount products, and since August, customers have been able to make bank-account deposits at stores. African retailers have adjusting strategy to adapt to changes in consumer behaviour prompted by COVID-19. Jumia has been trying to increase the number of cashless transactions completed on its 21; 22; 23 2023 The Independent Institute of Education (Pty) Ltd 2023 Page 4 of 5 e-commence platform. Research from Renaissance Capital in September argues that Pick n Pay is well placed in the current recessionary environment with its defensive food retail offering, robust balance sheet and disciplined capital management. The Boxer stores, which contributed about 10% of the companys South African supermarket sales in 2019, are likely to outperform given their discount offering as customers trade down, the note says. Pick n Pay on October 20 reported a 56% decline in headline earnings per share in the six months to the end of August. Still, core retail sales in South Africa, excluding liquor, clothing and tobacco, showed like-for-like growth of 6.4%. About two-thirds of Pick n Pay business is still with middle or high-income customers, and South Africa still has a shopping centre culture, North says. But, he adds, the days of GDP growth rates of 5% of more which underpinned increases in high-end shopping are long gone. COVID-19 has not really altered Pick n Pays strategy says North. South Africas process of urbanisation means that the formal retail market will keep growing with or without the pandemic. The long-term trend, he says, is for customers to visit local convenience stores more often rather than doing one big shop. The key, he adds, is to treat the aspirant customer with respect. Source: Whitehouse, D. 2020. South African retailer Pick n Pay banks on discount stores to grow. Available: https://www.theafricareport.com/46879/south-african-retailer-pick-n-pay-banks-on-discount-stores-to-grow/[accessed 28 February 2023]. Note: In your answers, you will be awarded more marks for integrating the theory and facts from the case study than if you discuss them separately. Q.2.1 With the use of examples applicable to the case study, explain the multiplicity of human needs in the business environment. (10) Q.2.2 Apply any five factors that should be considered when Pick n Pay chooses locations for its Boxer stores in South Africa. (10) Q.2.3 Assess the advantages of Pick n Pay being a public company rather than a private company. (10) 21; 22; 23 2023 The Independent Institute of Education (Pty) Ltd 2023 Page 5 of 5 Q.2.4 Identify and explain any three macro environmental variables in the case study applicable to Pick n Pays expansion plans.