{"id":823453,"date":"2025-05-08T08:30:00","date_gmt":"2025-05-08T06:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=823453"},"modified":"2025-05-12T11:11:13","modified_gmt":"2025-05-12T09:11:13","slug":"analyst-opinion-on-pick-n-pay-as-an-investment","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/823453\/analyst-opinion-on-pick-n-pay-as-an-investment\/","title":{"rendered":"Analyst opinion on Pick n Pay as an investment"},"content":{"rendered":"\n

Two prominent investment analysts have shared that they would not be buying Pick n Pay shares at this stage, as it faces a tough road ahead with uncertainty about the outcome.<\/p>\n\n\n\n

Pick n Pay has experienced a significant decline in performance and market share over the last decade, with competitors like Shoprite Checkers eating its lunch.<\/p>\n\n\n\n

The retailer struggled so much that it became technically insolvent<\/a>, forcing it to ask shareholders for money and sell part of Boxer to pay off debt.<\/p>\n\n\n\n

This two-phase recapitalisation plan<\/a>, which raised R12.5 billion for Pick n Pay, enabled the company to repay its long-term debt and convert interest costs into interest earnings.<\/p>\n\n\n\n

Pick n Pay now holds cash reserves critical for its turnaround, which will be used to invest in new stores and store refurbishments.<\/p>\n\n\n\n

Under new chief executive Sean Summers, Pick n Pay launched a turnaround strategy to revive the retailer and restore it to its former glory.<\/p>\n\n\n\n

He is confident Pick n Pay can win back customers it has lost over the past few years to a surging Checkers and Woolworths Food.<\/p>\n\n\n\n

In March 2025, Pick n Pay opened a new store<\/a> that includes key features the retailer plans to use in its refreshed store format.<\/p>\n\n\n\n

These features include an expanded fresh produce section, a broader product range, and a greater emphasis on convenience.<\/p>\n\n\n\n

Several Pick n Pay stores have been transformed with improved layouts, a more tailored product selection, and intensive staff training.<\/p>\n\n\n\n

The retailer reported that these stores have shown remarkable success, with some seeing sales growth of up to 100% and a positive trend in overall customer feedback.<\/p>\n\n\n\n

Pick n Pay has also expanded its partnership with FNB eBucks<\/a>, incorporating more than 20% of its total retail client base.<\/p>\n\n\n\n

This is part of Pick n Pay\u2019s plans to get customers back in its stores and increase engagement with its delivery service, which it sees as a strong driver of future growth.<\/p>\n\n\n\n

As the partnership with FNB gets customers through the door, the onus is on Pick n Pay to make them repeat customers by enhancing the in-store experience.<\/p>\n\n\n\n

\u201cIt is all about revitalising the stores. We still have such great real estate around the country, and they need to be revitalised and renewed,\u201d Summers said.<\/p>\n\n\n\n

Expert opinion on Pick n Pay as an investment<\/h2>\n\n\n\n
\"\"<\/a>
Protea Capital Management founder and CEO Jean Pierre Verster <\/figcaption><\/figure>\n\n\n\n

With Sean Summers at the helm and Pick n Pay investing in the revitalisation of its stores to win customers back, it raises the question of whether the company is a good investment.<\/p>\n\n\n\n

Over the last year, Pick n Pay\u2019s share price increased by 56%. However, in 2025, the share price declined by 8%. <\/p>\n\n\n\n

Jean Pierre Verster, founder and CEO of Protea Capital Management, told Business Day TV<\/a> that he is not positive about Pick n Pay.<\/p>\n\n\n\n

\u201cStrategically, they are in a difficult situation, and they must spend a lot of capex,\u201d he said. He also raised questions about the sustainability of Pick n Pay\u2019s Hypermarket model.<\/p>\n\n\n\n

He said the growth area in groceries is delivery, where Checkers Sixty60 has a significant lead over its competitors like Pick n Pay.<\/p>\n\n\n\n

He added that Boxer is the only part of Pick n Pay he is interested in investing in, and after Boxer\u2019s JSE listing, he can buy it directly. \u201cTherefore, I am not interested in buying Pick n Pay, I’d rather buy Boxer,\u201d he said.<\/p>\n\n\n\n

Grant Nader, a senior portfolio manager at Benguela Global Fund Managers, said he does not see evidence of a good strategy being executed at Pick n Pay.<\/p>\n\n\n\n

\u201cTheir store refurbishment is an expensive exercise, and they have a long way to go before it is obvious that they are turning the ship around,\u201d he said.<\/p>\n\n\n\n

He said there was no urgency to own Pick n Pay shares until there was more evidence of a successful turnaround.<\/p>\n\n\n\n

Verster said people should look for increased top-line growth and improved cash flow from Pick n Pay to see whether its turnaround strategy is working.<\/p>\n\n\n\n

Update: <\/strong>The article has been updated following feedback from Pick n Pay.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Prominent investment experts have warned South Africans to stay away from Pick n Pay’s shares, as it faces a tough road ahead with uncertainty about the outcome.<\/p>\n","protected":false},"author":10,"featured_media":791539,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[19894,22485,19967,4067,19960],"class_list":["post-823453","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-checkers-sixty60","tag-grant-nader","tag-jean-pierre-verster","tag-pick-n-pay","tag-sean-summers"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823453","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=823453"}],"version-history":[{"count":11,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823453\/revisions"}],"predecessor-version":[{"id":823685,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823453\/revisions\/823685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/791539"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=823453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=823453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=823453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}