In the quiet coastal town of Fish Hoek, the PEP store has been a fixture for over 60 years. My grandfather shopped there; I shop there. For decades, it has stood as a symbol of consistency in a country that is anything but consistent.
Yet, as 2026 unfolds, we find ourselves watching a bizarre corporate drama. Pepkor (the parent of PEP and JD Group) is moving to acquire OK Furniture and House & Home from Shoprite for R3.2 billion. Meanwhile, the Lewis Group has been fighting a desperate battle in court to block it, and the “Competition Hawks” are wringing their hands about monopolies.
It’s time for a reality check. If we want South African business to survive the current climate, we need to stop being scared of efficiency.
1. The “Distance Tax”: Why Size Matters
South Africa is vast. To the academics in Cape Town or the lawyers in Sandton, a “monopoly” is a scary word from a textbook. But to the person in a rural village in Limpopo or the Northern Cape, a “monopoly” isn’t the problem—logistics is.
Running a national retail chain in this country is a massive undertaking. We have high fuel costs, a crumbling rail network, and electricity costs that are strangling small businesses. To survive, you need Economy of Scale.
• You need a massive fleet of trucks to make long-haul trips profitable.
• You need the “buying power” to negotiate prices that offset the massive increase in utility costs.
Marginal players are falling by the wayside not because they are being “bullied,” but because they simply cannot afford to operate in the “Real South Africa.” A strong player like Pepkor can use its massive network to keep stores open in towns where others would simply pull the plug.
2. Is Pepkor a “Bad Guy”? Look at the Track Record
The argument that a “Mega-Pepkor” will suddenly start “screwing the consumer” doesn’t hold water when you look at their history. PEP has built its entire legacy on being the lowest-price provider.
• They didn’t become a household name by ripping people off; they did it by being so efficient that they could sell essential goods at prices others couldn’t match.
• Consumer Protection isn’t just about having ten different shops to choose from; it’s about having at least one shop that is efficient enough to keep prices down when inflation is soaring.
3. The “MBA Crybabies” and the Global Reality
There is a lot of talk lately about how South African business schools need to “decolonize” and ignore international MBA models because “South Africa is unique.” While our challenges are local, the laws of Supply and Demand are universal.
Nando’s didn’t become a global powerhouse by only studying the street corners of Rosettenville. They mastered international competition. If our lawmakers block local companies from getting big enough to be efficient, they aren’t “protecting” us—they are making us vulnerable. If we don’t allow a local giant like Pepkor to scale up, we leave the door open for international giants to walk in and take over.
4. The “Ghost in the Room”: Protecting the Rural Consumer
It would be dishonest to talk about the furniture business without acknowledging its “murky” past. For decades, the industry was often about selling credit first and furniture second. In the old days, hidden fees were sometimes used to squeeze vulnerable consumers in rural villages.
However, the world has changed. To make this “strong player” model work, we rely on modern safeguards:
• The National Credit Act (NCA): This is the ultimate shield, setting legal ceilings on interest and outlawing “reckless lending.”
• Plain Language Rights: Consumers now have the right to documents they actually understand, rather than legal jargon.
• Public Interest Conditions: The Competition Commission has already laid down rules for this deal, including protecting jobs and ensuring these giants continue to serve far-flung communities.
5. Where was Lewis Group?
Finally, one has to ask: If this deal is so “dangerous” and the OK Furniture business is such a prize, why didn’t Lewis Group buy it? Were they “asleep at the wheel”?
It’s easy to run to the courts to block a rival’s growth, but it’s much harder to build the infrastructure required to service the entire South African population. Blocking this deal won’t lower prices—it will only protect a competitor who is scared of a more efficient neighbor.
The Bottom Line
South Africa needs strong, resilient companies that can weather the storm of our national infrastructure crisis. We shouldn’t be punishing Pepkor for being good at what they do. We should be asking why more companies aren’t following their lead.
