Utilising examples from the articles, discuss how Boone has displayed strategic leadership characteristics.? Boone has reassessed the 100 top managers and changed 20% of this staff quotient as he aims to improve performance. Pick n Pay is working on improving and measuring store employees customer service. The group aims to increase its profit before tax margin to more than 3% by the 2026 financial year. The ratio is at 2% in the most recent financial results released on Tuesday. Pick n Pay has one of the lowest profit margins of the big four retailers but reducing product ranges will help it cut costs. If you end up with too many ranges, you end up with a whole lot of stuff the customer doesnt want. You end up with complexity. And when youve got complexity, you start to make mistakes in terms of availability, Boone told Business Day. Fewer goods allow the retailer to be more efficient with logistics and storage and reduces working capital tied up in stock, allowing stores to save money, he said. Chris Reddy, analyst at All Weather Capital, said Pick n Pay will have a tough time increasing its profit margin materially as it faces inflation pressure, the need to keep prices low and the additional R1bn capex spend. Key is going to be whether they can execute on it given tough macro headwinds coupled with increased competition. https://www.businesslive.co.za/bd/companies/retail-and-consumer/2022-05-17-pick-n-pays-growth- vision-includes-trimming-range-of-goods-30/ the retailers results it declared the first half of the year. PickLooking ahead, Boone said: Our management team has developed a strong Strategic Plan to bring Pick n Pay closer to the customer and accelerate the progress of our key growth engines, including the expansion of our Boxer, Clothing and Omnichannel businesses. Anchor Capital equity analyst Mayekiso said Pick n Pays annual results were reflective of the groups recovery from the depths of the Covid-19 pandemic as South Africa returned to normal with most lockdown restrictions finally lifted. I was pleased with the continued momentum in top line growth post year-end and I also thought there were some positive developments in terms of their strategy going forward. I believe that the market will appreciate improved disclosure around Pick n Pays food retail segment. Its strategy of keeping internal price inflation low in a tough macro environment could clawback market share from some of its competitors, she said. Its unlikely to be an overnight win, however. Boxer took a few years to come right, but, says Boone, it is now performing outstandingly thanks to consistency in execution, a fixed range of 3,000 [products] not one more, not one less and fixed responsibility to one person. They changed about a fifth of top management to create more speed in the business. 11

Boxer, he says, with its large own-brand turnover, is the cheapest option for the groups customers, yet is still aspirational. Pick n Pay red stores will have a range of 8,000 stock- keeping units (SKUs), offer low prices on key lines, be convenient and provide excellent service. The blue stores will cut their SKU count from 25,000 to 18,000 and will focus on fresh produce, meat and baked goods. The first seven red pilot stores are open four in the Western Cape and three in Gauteng. By the end of the calendar year there will be 190 of them. Boxer is already a separate company headquartered in Durban, while Pick n Pay operates out of Cape Town. Each has its own distribution centres. The group conducted more than 7,000 customer interviews to obtain feedback and consulted franchise partners. Boone says the group has a loyal customer base, but: Trying to serve everybody, but not in the most optimal way ... We need to improve the service we have towards the customers and improve the price perception. At the moment, the new red stores are referred to within the group as Project Red outlets, but Boone says this is a temporary working title. He thinks he knows what the permanent name will be, but first he has to test it out. You can only change the name of the sub-brand related to Pick n Pay once. I want to do proper customer testing ... I think I have the name but give us a few more weeks. Boone, who was previously COO at Metro AG, a German food wholesaler, has now been CEO for 12 months. Last years riots were clearly part of a baptism of fire but, he says: Ive taken it from a different angle. [SA] is a fantastic country, it has huge opportunities to grow, we have a young society that is evolving as well, and if you look at the development of the formal food and grocery market in the next five years, its due to grow an additional R200bn. And we would like to be part of that. SAs food and grocery market was valued at R628bn last year and is forecast to be worth R855bn by 2026. Pick n Pay has a total market share of 16%, which breaks down to a 23% share of the more affluent market valued at R112bn and a share of just 11% of the less affluent market of R408bn. One thing plays in their favour, says Alec Abraham, senior equity analyst at Sasfin: this whole disruption in the property market is likely to have opened up sites in areas, so it will make it easier to achieve 200 stores in three years for Boxer. 12

As for the partnership with Takealot, Pick n Pay will piggyback on the Mr D app, which has 2.5-million active users. Asap! Pick n Pays current on-demand offering will be integrated into the system. Clearly, Shoprites success with Sixty60 has caused much soul-searching within the company, though Asap! has shown triple-digit growth, week after week, says Boone. How did the Mr D partnership come about? As a newcomer in a country youre invited for a lot of cups of coffee ... and I have to say Kim [Reid, Takealots founder] and I created a good chemistry and you know ... one cup of coffee leads to some reflections and from there ... We have been working on this more than 10 months. The goal of the four-year plan is to deliver group turnover growth at a compound annual rate of 10% double the 5.2% increase in turnover for the 52 weeks ended February that Pick n Pay announced this week. While profit before tax and capital items surged 24.9%, headline EPS were up a more modest 14.5% to 262.59c, yet the retailer upped its dividend 23% to 185.35c a share. Once again, Pick n Pays clothing division had an outstanding year, with sales up 21%. A strong start to the 2023 financial year has seen sales grow 9.9% over the first eight weeks, despite an increasingly grim picture of decay, sketched by chair Gareth Ackerman this week. There is little management of infrastructure and service delivery is very poor. So poor, that we are finding it difficult in some places to secure insurance of our assets, he told analysts in the companys results presentation. The long-term consequences of last years riots mean increased security and insurance costs for the foreseeable future. At the same time, SAs retailers face yet another grocery market inquiry by the Competition Commission, which Ackerman derided as a cost in both money and time. It would be helpful if government agencies concentrated on the job at hand, he said. Pick n Pay has put no price tag on the shake-up, which it says will be funded through cost savings, better cash management and working capital, as well as some medium-term borrowing. Investors are likely to see more detail in segmental sales reports from the first half of this financial year. Boone says Pick n Pay has been seen as a conservative company, and kept its cards too close to its chest. Lets be open, lets share the information.