Pick n Pay to drop exclusivity leases in malls
The Competition Commission has signed an agreement of consent with retailer Pick n Pay, seeking to eliminate the company's exclusive leases in shopping malls.
According to an EWN report, this is in compliance with recommendations of the Grocery Retail Market Inquiry, which among others, highlighted that such agreements between businesses and property managers has an adverse impact on other industry players.
Recently, another major retailer, Shoprite, agreed to drop the exclusivity clauses in their shopping mall leases in non-urban areas with a long-term plan to do the same in urban areas.
The agreement between the Competition Commission and Pick n Pay has been referred to the Competition Tribunal for confirmation.
The Grocery Retail Market Inquiry found, among others, that in the long-term exclusive lease agreements are widely prevalent in the sector, which it said gave rise to customer harm as they limited their choices by reducing competition in shopping centres.
The commission said that the agreements prevented the participation of small to medium enterprises and historically disadvantaged people in the sector.
Competition Commissioner Tembinkosi Bonakele said that the move was a significant step in removing entry barriers and participation of the said groups in the country's retail sector.
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