Not BUCKLING under PRESSURE

By Sasha Planting
Published by Financial Mail

Consumer growth might be grinding to a halt, but retailers keep their eyes focused on BEE

If anyone is looking for headline grabbing black economic empowerment (BEE) deals then don’t look in the retail sector. “The biggest change is Cashbuild, which in its first year of rating has displaced Massmart as the retailer that is transforming most successfully,” says Empowerdex project manager Kgaugelo Matjakana.

But just looking at scores can be deceiving. The sector has been under pressure over the past 18 months. Companies have focused on maintaining margins and profits. And this tightening economy has encouraged a focused approach to BEE.

“So much of what we have done in terms of BEE is simply good management practice,” says Brian Leroni from Massmart. “Sharing ownership with our staff, identifying skills deficiencies earlier and spotting the gaps in training is good business.”

Education company AdvTech sees the benefit more philosophically. “Our core activity is education. But in the process our students absorb other skills, in particular life skills,” says CEO Frank Thompson. “So our educators and senior people must also be leaders, mentors and role models. “

Perceptions, too, are important. New Clicks CEO David Kneale says: “Most retailers have a high level of staff turnover. Having a positive transformation record affects our ability to recruit and retain talent.” In the past year retailers honed their efforts in socioeconomic development, enterprise development, skills development, employment equity and procurement. “This is the true essence of BEE,” says EconoBEE researcher Gavin Levenstein.

It is not easy to shift procurement in a country where supply is as concentrated as it is. The challenge for big retailers is that many items sold on SA shelves are produced through capital-intensive manufacturing processes – a barrier to entry for small producers. Some retailers, such as Woolworths and Game, have responded by providing financial assistance to small suppliers. Retailers are also leaning on their existing suppliers to improve their BEE status.

Though retailers reflect SA’s demographics at lower and middle management levels, developing a strong core of senior black management is tough. To address this, many retailers have established development academies.

Long accused of doing little to transform, there is now a sense of momentum among retailers.

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