Whitey: The Rise and Rule of the Shoprite King
WE have three supermarkets at our local shopping centre: Woolworths, Pick n Pay and Spar. Although their clienteles are mixed, each has a distinct socio-economic profile observable at entrance and exit. What is missing is Shoprite Checkers, the largest food retail group in Africa, which is harder to categorise.
James Wellwood (Whitey) Basson retired as its CEO in 2016 aged 70. He grew up at Porterville in the rural Western Cape, his father a farmer but also an MP for the United Party. Being the youngest in the family did not curb his self-confidence, and after Stellenbosch University he worked as an auditor and became a chartered accountant. This gave him the financial background. Perhaps more valuable was experience working in bottle stores owned by his family where he developed a feel and flair for retailing.
Auditing gave him an entrée to Pep Stores, the clothing outlet founded in Upington by Renier van Rooyen. In 1974 Van Rooyen gave him unlimited power of attorney, which he used to acquire Half Price Stores and later the Cape Town-based Shoprite. This was in 1979 and the point at which Whitey Basson’s business career took off. However, in 1982 Van Rooyen was succeeded by Christo Wiese who created the holding company Pepkor.
Shoprite’s growth plans could not be fulfilled quickly enough by opening new stores; acquisition was the route. In 1990 Grand Bazaars was acquired, followed by Checkers; which more than trebled the number of Shoprite stores. Checkers’ turnaround was the basis for the takeover of the ailing OK Bazaars, another very famous name, in 1997. The purchase price was R1 (a photograph of the cheque appears in the book); although Basson later joked that given OK’s debt burden, he should perhaps have offered only 99 cents.
The new group, Shoprite Checkers, then ventured into neighbouring countries. This required very hard work but has been successful, improving food security and providing employment in nations like Zambia, Angola and Mozambique. Success in Nigeria has been more limited and Egypt was a total failure. So, too, was a foray into India.
How was Basson so successful on such a scale? First and foremost, he never stopped regarding himself as a storekeeper, interested in the minutiae of the business and the concerns of customers and staff. He knew his business backwards and paid regular, unannounced visits to stores, which he inspected in great detail. As a hater of woolly apples, he carried a penknife and would test what was for sale. He also paid great attention to advertising, and that of competitors; while he was renowned for frugality.
His belief was that businesses cannot be run from boardrooms and just from balance sheets: you need to know the business and establish an appropriate and successful culture. Checkers and OK Bazaars had failed to understand this. Famously, he abolished the lavish lunches for executives at Checkers headquarters and told the beneficiaries to bring sandwiches; if they still had time for lunch. Basson was clearly a hands-on operator.
He was also a believer in a non-hierarchical corporate structure and, as far as possible, an open-door policy. From an early age he had an aversion to rules that made no sense. Falling into this category he put some of the bureaucracy that now bedevils business life. Getting on with business was his forte and it seems that at retirement he felt he was no longer able to concentrate on stock flows, customers and staff. As with other biographies of businesspeople the reader is left with a feeling that a great deal of success boils down to commonsense. Basson was a pioneer in South Africa of central distribution rather than individual delivery, but its value seems self-evident.
He was clearly capable of acts of care and kindness towards staff and had a canny understanding of relations in the workplace. But no businessperson reaches such heights of success without a streak (or more) of ruthlessness. Basson was capable of intemperate behaviour, although this was often followed by a more conciliatory contact. But his wife says she would have resigned on the spot if spoken to in the fashion Basson sometimes used on the phone. To what extent are critical voices excluded from this book, which largely glows with positivity? The question about hagiography remains open.
Nonetheless, Basson’s approach to work demonstrates many qualities that could be widely and successfully applied to many careers. And it is to his eternal credit that he spotted the flaws in Steinhoff from the outset, unlike his old colleague Wiese, and prevented Shoprite being sucked into ensuing business disaster. That neither auditors nor very experienced businesspersons rumbled Markus Jooste’s fraud gives credence to Basson’s scepticism about regulation.
Book review by Christopher Merrett, reproduced from his web page, From the Thornveld