Pick n Pay's R2.2 billion investment: A turnaround strategy for the future
Pick n Pay CEO Sean Summers says the company is investing to ensure long-term profit.
Image: Nicola Mawson | IOL
Pick n Pay is pouring money into improving stores and customer experience as it pushes forward with its turnaround plan even as it closes unprofitable stores.
The retailer will invest R2.2 billion this year, mainly to expand Boxer and Pick n Pay Clothing, and to revamp key supermarkets.
Although still loss-making, Pick n Pay has managed to narrow its losses sharply and says the difficult work of rebuilding the business is starting to show results.
The group’s losses for the six months to the end of August were almost half those of last year, helped by stronger trading and lower interest costs after last year’s recapitalisation.
“These results demonstrate that our turnaround is gaining traction, and we remain on track with each of our strategic priorities.
"Like-for-like sales growth has accelerated, our customer numbers are growing, and Boxer continues to outperform,” said Pick n Pay CEO Sean Summers.
“Importantly, Pick n Pay Supermarkets’ market share has stabilised, notwithstanding the reduction in the size of our supermarket estate under our store estate reset programme, a clear sign that we are on the right path.”
The company has been closing or converting unprofitable stores – about 65 in total – and says that part of its plan will be largely complete by year-end.
Summers said this had “removed a large number of loss-making stores out of the system,” helping Pick n Pay to serve customers better.
The retailer has invested in better fresh produce, more own-brand lines, and customer service training for more than 28 000 employees.
The group also kept its price increases low, holding internal inflation at just 2.1%, well below the 4.6% national food inflation rate.
“Greater efficiency enables more investment in price, which is exactly what we are doing, and we are confident that our pricing is now consistently competitive which is borne out by leading independent market surveys,” said Summers.
Pick n Pay has opened its 400th stand-alone Clothing store.
Image: Nicola Mawson | IOL
PnP Clothing continued to expand, opening its 400th stand-alone store and growing turnover by 12%.
Online sales jumped 34%, driven by demand through its asap! app and partnership with Mr D.
The Smart Shopper loyalty programme added over 600 000 new members and boosted sales 9%.
A new supply chain partnership with DP World is expected to strengthen distribution and improve service from 2027.
Summers said this would “enhance distribution capabilities, improve service levels, and is expected to deliver meaningful efficiencies”.
While acknowledging that consumers are still under pressure, Summers said the company is focused on long-term recovery.
“Our focus in the second half of the year remains firmly on improving our offer for our customers and on improving our operational execution, laying the groundwork for Pick n Pay’s return to profitability, he said.
Summers added that, “while reaching break-even remains a multi-year journey, the investments we are making to rebuild retail excellence will ensure sustainable, long-term profitability”.
IOL Business