{"id":796068,"date":"2024-10-18T08:00:00","date_gmt":"2024-10-18T06:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=796068"},"modified":"2024-10-18T07:53:06","modified_gmt":"2024-10-18T05:53:06","slug":"pick-n-pay-continues-closing-stores-in-south-africa-as-separation-looms","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/796068\/pick-n-pay-continues-closing-stores-in-south-africa-as-separation-looms\/","title":{"rendered":"Pick n Pay continues closing stores in South Africa as separation looms"},"content":{"rendered":"\n<p>Pick n Pay continued closing down corporate and franchise stores across South Africa as part of its turnaround and ahead of its separate listing of Boxer.<\/p>\n\n\n\n<p>On Thursday, Pick n Pay, which owns Pick n Pay Grocery Stores and Boxer, published a trading statement with an update on the 26 weeks ending 25 August 2024.<\/p>\n\n\n\n<p>Pick n Pay\u2019s trading statement was released after the markets closed, which indicates that it is not good news.<\/p>\n\n\n\n<p>The retailer revealed that investors should expect another poor performance when it releases its results for the first half of its 2025 financial year on Monday, 28 October 2024.<\/p>\n\n\n\n<p>Pick n Pay warned that its loss per share and diluted loss per share will increase between 30% and 40% year-on-year.<\/p>\n\n\n\n<p>Its headline loss per share and diluted headline loss per share will increase between 10% and 20% year-on-year.<\/p>\n\n\n\n<p>Its comparable headline loss per share and diluted comparable headline loss per share will increase by between 20% and 30%.<\/p>\n\n\n\n<p>This poor performance was due to its struggling Pick n Pay business. Boxer, in comparison, performed well.<\/p>\n\n\n\n<p>Boxer sales grew 12.0%, driven by strong like-for-like sales and complemented by new store openings.<\/p>\n\n\n\n<p>Boxer opened twelve net new stores during the period and anticipates a ramp-up in new store openings in the second half of the year.<\/p>\n\n\n\n<p>In comparison, Pick n Pay sales declined by 0.3%, with Pick n Pay South Africa sales increasing by 0.1%. Like-for-like sales in South Africa were slightly higher at 1.1%.<\/p>\n\n\n\n<p>Pick n Pay sales growth lagged like-for-like sales because it closed 24 supermarkets, including 10 corporate stores and 14 franchise stores, during the period.<\/p>\n\n\n\n<p>These store closures formed part of Pick n Pay\u2019s turnaround strategy, which included shutting down loss-making supermarkets.<\/p>\n\n\n\n<p>Pick n Pay CEO Sean Summers previously said the company would close 35 underperforming Pick n Pay stores and convert 70 outlets to the Boxer brand.<\/p>\n\n\n\n<p>He added that they had identified many stores in critical condition and would not make the same mistake as in the past to convert these struggling stores into franchises.<\/p>\n\n\n\n<p>\u201cYou merely end up with an extraordinary franchise debt and franchisees under too much pressure,\u201d he explained.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers-1024x576.jpg\" alt=\"\" class=\"wp-image-774054\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers-1024x576.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers-768x432.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Sean-Summers.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\">Pick n Pay CEO Sean Summers<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pick n Pay turnaround plan<\/strong><\/h2>\n\n\n\n<p>Pick n Pay remained upbeat about its prospects despite the poor trading statement and bigger losses.<\/p>\n\n\n\n<p>It told investors that the Pick n Pay segment\u2019s refreshed management team began to execute the turnaround plan.<\/p>\n\n\n\n<p>The retailer said the group is well advanced in executing its two-step recapitalisation plan. It includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The successful completion of its R4 billion rights offer in August 2024.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Receiving overwhelming shareholder support at its 1 October 2024 general meeting to proceed with the listing of Boxer on the main board of the JSE towards the end of the year.<\/li>\n<\/ul>\n\n\n\n<p>The company added that it made good progress on its Pick n Pay turnaround in South Africa, which it measures through like-for-like sales.<\/p>\n\n\n\n<p>\u201cThe Group is seeing steady improvement in this metric, from -0.4% in H2 FY24 to +1.3% for the period,\u201d it said.<\/p>\n\n\n\n<p>It explained that company-owned Pick n Pay supermarkets, which account for most reported sales, have underperformed in recent years.<\/p>\n\n\n\n<p>\u201cAs a result of improved retail operations, like-for-like sales growth for this segment increased from -0.5% to 3.1%,\u201d Pick n Pay said.<\/p>\n\n\n\n<p>In comparison, like-for-like sales growth in franchise supermarkets declined by 1.4%, which it said was disappointing.<\/p>\n\n\n\n<p>\u201cOver recent years, company-owned Supermarkets have rarely outperformed franchise stores,\u201d Pick n Pay said.<\/p>\n\n\n\n<p>The retailer said this reversal confirms the early progress in the turnaround of company-owned supermarkets.<\/p>\n\n\n\n<p>Pick n Pay said it is now focussed on revitalising the performance of franchise stores to improve its South African performance.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read<\/strong>: <a href=\"https:\/\/businesstech.co.za\/news\/property\/795633\/15-towns-south-africans-are-dumping-in-their-hundreds-including-durban-pretoria-and-even-sandton\/\">15 cities South Africans are dumping \u2013 including Durban, Pretoria, and even Sandton<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pick n Pay continues to close down corporate and franchise stores across South Africa as part of its turnaround plan. <\/p>\n","protected":false},"author":10,"featured_media":788723,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[6655,26,4067,19960],"class_list":["post-796068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-boxer","tag-headline","tag-pick-n-pay","tag-sean-summers"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/796068","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=796068"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/796068\/revisions"}],"predecessor-version":[{"id":796081,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/796068\/revisions\/796081"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/788723"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=796068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=796068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=796068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}