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Retail sector 'needs BEE charter'

Jul 12 2012 11:11

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 144.80
Change -0.12
% Change 0.00
Cumulative volume 45518
Market cap 31.44bn

Last Updated: 25/07/2014 at 04:21. Prices are delayed by 15 minutes. Source: McGregor BFA

CLICKS GROUP LIMITED [JSE:CLS]

Last traded 66.56
Change -0.24
% Change 0.00
Cumulative volume 1017266
Market cap 16.38bn

Last Updated: 25/07/2014 at 04:31. Prices are delayed by 15 minutes. Source: McGregor BFA

WOOLWORTHS HOLDINGS LIMITED [JSE:WHL]

Last traded 83.59
Change -0.16
% Change 0.00
Cumulative volume 749868
Market cap 70.80bn

Last Updated: 25/07/2014 at 04:34. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Empowerment experts have called for government to introduce a broad-based black economic empowerment charter to ensure retailers remain fully compliant with BEE codes of practice, according to Business Report.

Despite BEE programmes by retail giants such as Pick n Pay Stores [JSE:PIK], Massmart Holdings [JSE:MSM], Woolworths Holdings [JSE:WHL] and Clicks Group [JSE:CLS], there has been widespread criticism that the sector is not fully compliant with BEE standards.

The government had little or no leverage on broad-based BEE in the retail sector, Ajay Lalu, the managing director of Black Lite Consulting told Business Report.

Lalu criticised the sector's enterprise development programmes and employee share schemes, saying some of them were used to sugar-coat empowerment programmes as they did not fundamentally transform the supply chain.

He said deals such as the Massmart and Walmart merger would not have been opposed by the government if Massmart had good empowerment programmes or better employee relations. “In my view the merger would have received support from (the) government had Massmart been more proactive on its empowerment programme,” Lalu said.

The retail sector, unlike other industries, does not have a transformation charter with set targets to be achieved by particular dates.

Instead of full partnerships with black-owned businesses, retailers have put in place a number of enterprise development programmes and broad-based employee share ownership programmes, the report said.

Through its enterprise programme, Woolworths had appointed Stuart’s Joinery, a black family-owned company, as its preferred shop-fitting supplier for the company’s African stores and it supported BEE suppliers, the company said.

According to Pick n Pay chairperson Gareth Ackerman, its employee share trust held 3.4 million shares in the company.

“Procurement from black-certified businesses remains a priority and targets have been set for all buyers in all categories to ensure that they have an element of black procurement within their respective portfolios.”

The company had also established an enterprise development foundation and a franchise academy.

However, BEE analysts said this was not enough.

Lalu said retail empowerment programmes, including enterprise development, were inadequate unless retailers were prepared to establish a transformed and sustainable supply chain with real benefits flowing to black people.

Lalu stressed that more attention should be given to the manufacturing and retail sectors.

Andile Thloaele, CEO of consultancy Inforcomm, said the reason retailers lagged behind with BEE programmes was because they were not incentivised. He also added that BEE guidelines were too diluted to get the sector to fully comply.

 - Business Report

 
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