Shoprite bought all Pick n Pay’s chlorine and sold it at a discounted price later

Many years ago, Shoprite, under the leadership of Whitey Basson, outfoxed Pick n Pay by buying all its chlorine and reselling it a few weeks later at a discount.

Basson shared this story during a discussion with the True North podcast published by C2M Chartered Accountants.

He is widely regarded as South Africa’s best-ever retail chief executive, transforming an 8-store Western Cape grocery chain into the largest food retailer in Africa.

During his tenure as Shoprite chief executive, his main competitor was Pick n Pay, founded by another retail legend, Raymond Ackerman.

He said that a chlorine supplier didn’t want to give Shoprite good wholesale prices. Pick n Pay, in contrast, enjoyed great wholesale rates.

“In those days, Pick n Pay’s standard shelf price for a 5-litre bottle of chlorine was like gold. If they advertised it at R55, that became the benchmark,” he said.

“If you charged R56 for a 5-litre bottle of chlorine, people thought your entire grocery store was expensive.”

It was not possible for Shoprite to be the cheapest, as its wholesale cost was higher than Pick n Pay’s retail price. “We couldn’t compete,” Basson said.

However, he had a solution. Shoprite bought up all of Pick n Pay’s chlorine whenever it went on special.

“Our branch managers sent people to Pick n Pay. If the store had a limit of two bottles per customer, we would send 100 people and walk out with 200 bottles of chlorine,” he said.

Soon afterwards, Shoprite would run an advertisement offering chlorine at a substantially lower price than Pick n Pay.  It didn’t cost them anything extra.

“Pick n Pay would then give the chlorine suppliers hell, demanding to know why they were selling to Shoprite so cheaply,” he said.

Basson would even print Shoprite promotional pamphlets and have them hand-dropped into the post boxes of Pick n Pay’s top directors to watch them panic.

“I ended up ruining the relationship between Pick n Pay and their own supplier of the chlorine,” Basson said.

He added that the funniest part was that their core customer base at the bottom end of the market didn’t even have swimming pools.

“I didn’t care about selling chlorine. We just used it to draw Pick n Pay’s affluent, pool-owning clients into our stores because our advertised price was so low,” he said.

“We ran big ads with just a simple line mentioning our chlorine price, and it worked beautifully.”