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Namibian group to end its 27-year franchise agreement with Pick n Pay
By our African Marketing Confederation News Team | 2024
O&L group plans to strike out on its own in the tightly contested Namibian grocery retail sector once the Pick n Pay notice period ends.
The Namibian-based Ohlthaver & List Group (known as O&L), which operates 19 Pick n Pay franchised supermarkets in the country, is to end its long-standing operating agreement with Pick n Pay and start its own supermarket chain.
Photo: O&L group
O&L has given notice that it will terminate the 27-year agreement on 30 June 2025 following a 12-month transition period.
Pick n Pay is one of the largest and most established retail chains in South Africa and operates a range of store formats – including hypermarkets, supermarkets and convenience stores – catering to diverse customer needs. Besides SA and Namibia, it has a footprint in various other African countries.
However, Pick n Pay has been struggling financially and some underperforming company-owned stores will be closed or converted to either franchises or Boxer outlets. Boxer is a discount chain and the best-performing brand within the Pick n Pay group.
“While we appreciate the long-standing partnership we have had with Pick n Pay South Africa, we are confident that this decision aligns with our commitment to being a more customer-centric and Namibian market-oriented business, staying true to our essence of being authentic, caring and passionate,” says Sven Thieme, Executive Chairman of the O&L Group, in a statement posted on the group’s website.
No job losses due to changeover
According to reports in the Namibian media, there will be no job losses and employees will be absorbed into the new business.
“We’re taking the business back to us completely so that we have a sustainable business model, because I can guarantee you when we have the new business model in place, the future of the employees [is] guaranteed,” Thieme is quoted as saying in The Namibian newspaper.
“During this [12-month transition] time we will focus on minimising any disruption to our employees, customers and business partners. Change is the only constant, and we believe this change will bring growth and innovation.”
According to Trendtype, the emerging markets consultancy, Pick n Pay’s competitors, Shoprite and Spar, have expanded heavily into Namibia.
In partnership with Shell, Spar currently operates 65 stores. The Shoprite-owned OK franchise stores have also expanded by partnering with Puma Energy.
O&L’s attempts to introduce new store formats in recent years have not succeeded. In 2022 O&L opened a Pick n Pay Express in Swakopmund, and opened its second express store in Katutura. In March 2023 it opened a discount store called Supa Shop in Windhoek to compete against OK Stores and Choppies.
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