Pick n Pay is targeting growth in the financial services space by offering customers the ability to purchase goods on credit and through a partnership with digital bank, TymeDigital, backed by billionaire Patrice Motsepe.
In reporting interim financial results for the year ended August 2017, Pick n Pay said its money transfer product, in partnership with TymeDigital by the Commonwealth Bank SA, had 200,000 customers registered either with Pick n Pay or Boxer by the end of the period.
In line with its plans to launch a digital bank, TymeDigital was recently awarded a banking licence by the South African Reserve Bank – a first in 18 years.
“The group will be working closely with TymeDigital to provide greater access to financial services for its customers. This will support improved financial inclusion and offer better value to our customers in stores across South Africa,” Pick n Pay said.
In September, the group launched its Pick n Pay Store Account. It gives qualifying Pick n Pay customers access to a responsible credit facility that offers up to 55 days interest-free, provided the customer’s balance is fully paid off monthly, and no hidden fees for customers who choose to spread their payments.
The account is accessed through the customer’s existing Smart Shopper card with the credit provider carrying all associated funding costs and credit risk.
Pick n Pay said it continued to invest in Pick n Pay Online. In September 2017, the group redesigned and launched its new mobile-enabled website, marking a further step towards a fully multi-channel grocery business.
Pick n Pay’s online service enables customers to collect products ordered online in some stores as an alternative to having them delivered to their home or office.
Visitors to the Pick n Pay Online website increased by 32% year-on-year.
In 2015, Pick n Pay built a dedicated warehouse for online customers in the Western Cape, “which has delivered a stronger range, better availability and improved efficiency”. Pick n Pay said online sales in this region increased 25.0% year-on-year.
The group opened a second dedicated warehouse in Gauteng to serve customers in that region, during the period.
Pick n Pay said group turnover increased 5.1% to R39.3 billion,with like-for-like turnover growth of 1.8%.
“This reflects the pressures of a challenging trading environment, some disruption from store refurbishments and closures, the temporary displacement of staff through the voluntary severance programme, and the investment in lower prices to customers,” the retailer said.
- Turnover up 5% to R39.3billion
- Trading profit up 15.8% to R641.5 million
- Diluted headline earnings per share down 23.9% to 60.78 cents per share
- Interim dividend per share up 11.7% to 33.40 cents
The group said it opened 63 new stores in the first half of the financial year, including 40 company-owned stores and 23 franchise stores.
“The Group continues to strengthen its partnership with franchisees and this part of the business continues to perform well.
A total of 13 new Pick n Pay clothing stores were opened, with the clothing business continuing to grow ahead of the market.
The group said its store refurbishment programme for the first half of the financial year encompassed 34 stores. Major store refurbishments included the Pick n Pay flagship supermarket in Constantia, Cape Town and the Group’s Durban North Hypermarket, both of which are due to be completed in the second half of the year.