Pick n Pay soars on sales boost as it looks to upgraded supermarkets for future growth
Shares in retailer Pick n Pay surged nearly 7% in trade on Monday after the group said it expects to report strong earnings growth.
The group said in a trading update for the 26 weeks ended 28 August 2022 that it anticipates headline earnings per share to be 20 to 30% higher.
Pick n Pay reported sales growth of 11.5% for the period, with like-for-like sales growth of 7.4%. The base period (H1 FY22) was severely disrupted by the July 2021 civil unrest and the loss of 55 days of liquor trading due to Covid-19 trading restrictions.
Excluding these impacts, the group estimates normalised sales growth for the period of 8.2%, it said.
Internal selling price inflation for the period was 7.2%, reflecting a sharp uptick over July and August, compared to the 5.0% reported for the first 18 weeks of the financial period, it said.
This is further evidenced by the increase in Food CPI, which rose from 8.6% in June to 11.3% in August, according to Statistics SA.
“We reiterate our ongoing commitment to low-price investment and collaboration with suppliers to limit price increases,” the retail group said.
Sales growth was primarily driven by a strong performance from Boxer – the group’s discount supermarket chain.
The group said that year-on-year sales growth from the Pick n Pay supermarkets upgraded to the new CVPs (customer value propositions) has been “particularly encouraging”, but the upgraded stores do not yet constitute a substantial enough proportion of the estate to meaningfully impact the overall performance of the Pick n Pay brand, it said.
Strategic update
Pick n Pay said the full year 2023 is an investment year for the group, as the various elements of its Ekuseni strategic plan, announced in May 2022, are set in motion. “Substantial progress was made in H1 on all elements of the plan, including the launch of the QualiSave banner, which has been very well received by customers.”
In May, Pick n Pay announced plans to diverge into three main groups, catering to three segments of the market – discount, convenience, and premium.
The group said that the new Pick n Pay food and grocery offer delivered by Mr D has been successfully launched in a limited number of stores and will now be rolled out rapidly across the country.
“The group is also making progress in its plan to create a single, modernised head office, and to drive productivity and efficiency gains in its cost base,” it said.
Pick n Pay’s results are due to be published on 18 October 2022.
New look stores
In September, Pick n Pay opened a boutique-styled store in Station House – a modern development in the heart of Sea Point.
Customers visiting the Pick n Pay store can expect a modern interior and refreshed product offering as the retailer revamps some of its stores to target discerning customers.
The Station House Pick n Pay is a smaller store with just over 2,800 products. “While a smaller Pick n Pay, the carefully considered range will cater to all customer needs be it a Station House resident or hotel guest, a resident in the community and surrounds, or a visitor to the area,” said Jarett Van Vuuren from Pick n Pay.
The range includes fresh fruit and vegetables produce, a good range of quality meat, and delicacies such as charcuterie and speciality cheeses. There will also be freshly baked pies and a wide range of pre-baked bakery goods. Customers can also buy non-perishable grocery items or select from a range of household items or toiletries.
Read: A look at Pick n Pay’s major new supermarket brand: QualiSave
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