Pick n Pay closes more stores in South Africa

Major retailer Pick n Pay has published a trading update for the 45 weeks ending 5 January 2025, showing a steady improvement in its like-for-like performance.

However, this improvement has come at the cost of store closures across the country as part of its ‘store reset plan’ to turn the business around.

Pick n Pay South Africa has closed 32 supermarkets during the period, including 24 company-owned stores and 8 franchise stores.

This also includes the conversion of five of its company-owned stores to franchise stores.

At the time of last reporting (October 2024), the group had closed 24 supermarkets, including 10 corporate stores and 14 franchise stores—meaning the total has increased by 8 since.

This allowed the group to report like-for-like sales growth of 1.6%, and 1.9% growth for Pick n Pay South Africa.

When the like-for-like comparison is not considered, sales decline by 0.4% and 0.1% at the group and South Africa levels, respectively.

While the implementation of the Store Estate Reset plan resulted in total sales lagging like-for-like sales momentum, Pick n Pay said that this was a natural consequence of the planned store closures and conversions.

The group embarked on a major turnaround strategy after recording an after-tax loss of R3.2 billion for the year ended 25 February 2024 (FY24).

This followed a R2.8 billion non-cash impairment on the assets of Pick n Pay company-owned stores.

Pick n Pay Grocery recorded a R1.5 billion trading loss during the period, undermining Boxer’s R1.9 trading profit.

Part of the turnaround involved raising funds from shareholders through a Rights Offer—which raised R4 billion in August 2024 and was more than double oversubscribed—as well as separately listing Boxer stores, which added another R8 billion to the pot.

The other big part of the turnaround was focusing on Pick n Pay stores, especially those that were loss-making, and right-sizing the business.

In its latest update, Pick n Pay said that as a result of improved retail discipline, its company-owned supermarkets are improving and it is encouraged by the trend over the past 12 months.

Clothing sales growth in standalone stores was 10.0% (1.7% like-for-like).

Clothing sales momentum improved in the latter 19 weeks of the Period to 10.3% (3.6% like-for-like) versus 9.8% (0.2% like-for-like) previously reported for H1 FY25.

Online sales growth for the Period was 42.5%, driven by the continued growth of Pick n Pay asap! and Pick n Pay Groceries on the Mr D app.

Pick n Pay SA’s internal selling price inflation for the period was 2.4%, versus 3.4% for H1 FY25

Pick n Pay SA’s internal selling price inflation is significantly down from the 8.2% reported for the FY24 financial year.

Boxer stores once again proved to be the biggest success story in its results, showing 12% growth (7.7% like-for-like) in the 26 weeks ended August (H1FY25) and 11.4% (6.7% like-for-like) in the 45-week period.

With Boxer stores included, group turnover was up 3.7% (2.9% like-for-like) for H1FY25, and up 3.6% for the 45-week period (3.3% like-for-like).