Pick n Pay Proposes Labour Changes To Cut Costs And Align With Retail Industry Norms

Sean Summers is CEO of Pick n Pay. Source: Suppleid.

Reducing premium pay

The group has initiated a formal Section 189A consultation process with labour unions, proposing significant changes to its labour model — including adjustments to weekend pay structures, working hours and benefits.

At the centre of the proposed changes is a plan to reduce premium pay for Sunday work and introduce more flexible rostering that would require a greater number of full-time staff to work across weekends, reflecting peak trading periods.

According to the company, long-standing employment arrangements have become misaligned with industry norms, with Pick n Pay arguing that its labour costs sit well above market benchmarks and are no longer sustainable in a highly competitive retail environment.

Chief executive officer Sean Summers has said the retailer’s current cost structure has become a “structural issue”, warning that without meaningful change the business risks further financial deterioration.

He has also pointed to what he describes as an imbalance in staffing patterns, with weekday shifts over-represented while customer demand is increasingly concentrated over weekends and evenings — a mismatch the company says it needs to correct.

While the process does not automatically imply job losses, Section 189A consultations typically involve potential retrenchments or material changes to employment terms. The retailer has confirmed that it is engaging unions, including SACCAWU, and that discussions will explore alternatives to job cuts where possible.

In a Bizcommunity interview in 2024, Summers framed the retailer’s turnaround challenge as both structural and deeply cultural, arguing that recovery depends on “being upfront about our shortcomings” and returning to the foundational principles on which the business was built.

His perspective is shaped by a rare dual tenure at the company: first appointed in 1995 during a period of labour unrest and organisational instability in post-apartheid South Africa, and later brought back decades later to lead a second turnaround as the retailer again came under significant financial pressure. Summers reflected that both eras required rebuilding from within — not only fixing operations, but restoring alignment between employees, customers and purpose.

Competitors and rising costs

Pick n Pay has stressed that hourly wage rates will not necessarily be reduced, but acknowledged that overall earnings could be affected through revised hours, allowances and benefit structures.

The proposed changes come at a critical moment for the retailer, which has faced sustained pressure from competitors, rising costs and ongoing efforts to turn around its core supermarket business.

The consultation process is expected to run over the coming weeks, with both management and unions required to explore options to minimise job losses while ensuring the company’s long-term sustainability.