Major retailer opening hundreds of stores in South Africa

Retail group Pepkor is rapidly expanding its store base, with the company on track to open between 250 and 300 stores in the current financial year.

Despite downward-trending inflation, reduced load shedding, and the start of the two-pot retirement system, the market remains subdued and highly competitive.

Structural challenges such as high unemployment and low economic growth persist, and consumers are financially constrained. 

Despite the challenges, the group’s retail space increased by 2.1% year-on-year, with 168 new stores during the six months ended 31 March 2025. 

This includes 32 stores from the newly launched Ayana, 79 net, and expands the total store footprint to 5,978 stores. 

PEP also saw like-for-like sales growth of over 10%, with market share increasing across all product categories. 

The PEP store base was expanded by 43 new stores, extending the base to 2,649 stores. 

Ackermans also continued its recovery, with like-for-like sales growth of nearly 10%. 

Market share gains were also seen in the babies, kids (including CUBE) and wear categories. The store base was expanded to 1,018 stores, as 19 new stores opened. 

Elsewhere, the group’s speciality store base, which includes Tekkie Town, Shoe City, Refinery Junior and Ayana, increased to 972 stores. 

The lifestyle sector also delivered 6.3% like-for-like sales growth, with strong trading momentum in Home, supported by a greater product range and increased spending power from the two-pot system. 

The group’s cellular market share also expanded further, now selling eight out of every 10 prepaid handsets in South Africa. 

The group said it is well on track to open between 250 and 300 new stores in FY25.

This comes shortly after Pick n Pay CEO Sean Summers said that South African retailers are opening too many new stores, putting their financial viability at risk.

“If you’ve got retailers who are prepared to just open stores at any cost, then a shopping centre works. But I would question the medium-to-long-term wisdom of the strategy,” said Summers.

In contrast to Pepkor’s rapid rollout, Pick n Pay is currently restructring and right-sizing its store network, which has seen the group close loss-making outlets and converting others to Boxer stores.

Other retailers, like the SPAR Group, have adopted similar strategies with a focus on core operations.

Notably, however, other retail segments within these brands — such as PnP Clothing — are showing store growth.

Looking at Pepkor’s financials for the six months ended 31 March 2025, the group saw its revenue increase by 12.8% to R48.8 billion. 

The group’s total earnings per share also increased by 23.3% to 83.1 cents per share, while the headline earnings per share jumped 8.5% to 84.3 cents.

Opportunities 

Pepkor said that the current uncertain global tariff environment gives South Africa the opportunity to benefit from increased global product supply capacity. 

The group said that the South African and Brazilian macro environments, with a muted South African economic landscape, remain challenging.

It said that its business model and strategy remain focused on identifying, executing and monetising customer needs.

This will be done through maintaining the performance of existing traditional retail brands, integrating newly acquired businesses and also being disciplined with its cost management.