{"id":834386,"date":"2025-08-10T10:00:00","date_gmt":"2025-08-10T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834386"},"modified":"2025-08-13T16:17:43","modified_gmt":"2025-08-13T14:17:43","slug":"pick-n-pay-is-worth-zero","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/834386\/pick-n-pay-is-worth-zero\/","title":{"rendered":"Pick n Pay is worth zero"},"content":{"rendered":"\n

Chantal Marx from FNB Wealth and Investments believes that there is value in Pick n Pay despite the current price implicating little to no value when excluding Boxer. <\/p>\n\n\n\n

Pick n Pay has been one of South Africa\u2019s largest retailers for around seven decades, but has recently fallen on hard times.<\/p>\n\n\n\n

The group reported cumulative losses of roughly R4 billion in the 2024 and 2025 financial years amid the poor performance of its core Pick n Pay grocery business. <\/p>\n\n\n\n

This led to massive structural changes at the group, with the founding Ackerman family giving up majority control following a rights offer in 2024.<\/p>\n\n\n\n

Gareth Ackerman, the son of Pick n Pay founder Raymond Ackerman, also stepped down as chairman earlier this week. <\/p>\n\n\n\n

Former CEO Sean Summers also returned to the group in 2023 to turn operations around, despite being in his early 70s.<\/p>\n\n\n\n

On top of the rights offer, the group also launched an IPO for Boxer in late 2024 to help raise about R8 billion in cash. As per the IPO, Pick n Pay retained a roughly 65% share in Boxer. <\/p>\n\n\n\n

The discount retailer has been one of the group\u2019s best performers, driving revenue growth and rapidly expanding its store base. <\/p>\n\n\n\n

In its latest trading statement for the 17 weeks to 29 June 2025, Boxer said it aimed to open 60 new stores – 25 Superstores and 35 liquor stores. <\/p>\n\n\n\n

This came off the back of the group\u2019s turnover for the period, growing by 12.1% and 3.9% like-for-like in the context of low internal selling price inflation and a highly constrained consumer. <\/p>\n\n\n\n

Unfortuntely for Pick n Pay, the market sees its Boxer spin-off as being far more valuable than its core operation.<\/p>\n\n\n\n

Should be worth more<\/h2>\n\n\n
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Speaking with MoneywebNow<\/a>, Marx said that it was not fair that Pick n Pay outside of Boxer is valued at zero by the market.<\/p>\n\n\n\n

Pick n Pay\u2019s market cap currently stands just shy of R20 billion, while Boxer\u2019s sits at R31 billion. <\/p>\n\n\n\n

Pick n Pay stores in isolation thus seen to have zero or minimal value. Marx said that execution risk and holding company dynamics may explain this in part.<\/p>\n\n\n\n

Although Pick n Pay\u2019s growth rate is far slower than its largest rival, Shoprite, it is still heading in the right direction. <\/p>\n\n\n\n

In its latest trading statement for the 17-week period to 29 June 2025, the Pick n Pay group saw its turnover increase 4.3%, with like-for-like sales up 3.8% against last year\u2019s same period. <\/p>\n\n\n\n

Pick n Pay South Africa (SA) like-for-like sales for the period grew by 3.6%, with online sales also increasing by 33.0%, driven  Pick n Pay ASAP!, and Mr D.<\/p>\n\n\n\n

Marx was particularly impressed by the Pick n Pay clothing business, which saw growth of 12.1% over the period. <\/p>\n\n\n\n

The group is also progressing with cleaning up its operations, with stores under challenging positions converted into Boxers. <\/p>\n\n\n\n

The group noted that its Store Estate Reset Plan resulted in turnover growth lagging like-for-like sales momentum, which resulted from the planned store closures and conversions. <\/p>\n\n\n\n

It noted that closures and conversions are expected to contribute to achieving the medium-term break-even objective of the Pick n Pay segment. <\/p>\n\n\n\n

Although Pick n Pay is not expected to profit in the next 6 months, Marx believes that the group will break even ahead of management\u2019s expectation of 2028.<\/p>\n\n\n\n

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Financials<\/h2>\n\n\n
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*The article has been updated with further commentary from Chantal Marx. <\/em><\/p>\n\n\n\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

Pick n Pay’s turnaround strategy is starting to bear fruit, but the market still sees little value outside of the more successful Boxer stores.<\/p>\n","protected":false},"author":95,"featured_media":811720,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[4067],"class_list":["post-834386","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-pick-n-pay"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834386","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=834386"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834386\/revisions"}],"predecessor-version":[{"id":834933,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834386\/revisions\/834933"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/811720"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}