Pick n Pay pushes for a financial comeback by backing the Boks and partnering with FNB

Daily Maverick

23-04-2025

In a few months, Pick n Pay's logo will sit on the back of the Springbok jersey – a bold move from the retailer that reported mounting financial losses in 2024.
On Thursday, 27 March, SA Rugby announced that Pick n Pay would become a Tier 1 sponsor of the Springboks, placing its logo squarely on the back of the country's most iconic jersey.
Just a year before, the retailer had reported a full-year trading loss of R1.5-billion. Its most recent interim results showed a 9.1% increase in trading losses year-on-year.
To stem the bleeding, the group proposed a R4-billion recapitalisation plan, complete with a rights offer and plans to list its stronger-performing Boxer brand on the JSE to keep the ship afloat.
It has been reported by News24, and Planet Rugby that the estimated cost of the Springbok sponsorship is worth R70-billion. Neither Pick n Pay or SA Rugby has confirmed this figure.
Allies in the aisle
Pick n Pay's Springbok debut follows hot on the heels of a newly inked partnership with First National Bank (FNB), which includes Smart Shopper-linked eBuck benefits and discounted groceries for qualifying cardholders.
'Amid rising household pressures, this strategic partnership helps us deliver even more value to South Africans while attracting new customers,' Pick n Pay said.
FNB was also announced as the new front-of-jersey sponsor for the Springboks, replacing MTN after an eight-year stint. That sponsorship has been reported to be about R150-million by EWN and News24, although FNB declined to confirm the amount.
Together the two companies, already deeply intertwined through their retail partnership, are now investing a reported estimate of R220-million into South African rugby.
Separate deals, same team sheet
Despite the overlap, FNB said the Bok sponsorship was independently negotiated. Pick n Pay also confirmed that the overlap was 'unplanned'.
'The strategic partnership between FNB and Pick n Pay was a standalone business decision and was not influenced by either party's involvement with SA Rugby,' Faye Mfikwe, chief marketing officer of FNB, said.
Pieter Woodhatch, CEO of FNB's eBucks, echoed this, saying the bank had confidence in Pick n Pay's recovery strategy. 'Our partners are chosen strategically to drive mutually beneficial behaviours,' he said. 'We are proud to partner with an iconic brand like Pick n Pay.'
The numbers suggest early success. Burger Friday specials (R50 for four burger patties, a lettuce mix, two tomatoes, four buns and cheese slices) and 99c bread loaves have attracted foot traffic. FNB told Daily Maverick that they've seen a 'positive uptake' in Pick n Pay's environment since the launch of the rewards programme.
Exit stage left for MTN
MTN attributed its departure from the Springbok sponsorship to a 'refreshed brand positioning' and a shift in strategy.
'This evolution is not a reflection of financial or economic pressures, but rather a considered, forward-looking approach,' the company said.
MTN declined to confirm the total cost of its previous Springbok sponsorship, which spanned a number of World Cup wins and brand visibility at an all-time high.
The bleeding balance sheet
Pick n Pay's 2024 audited results painted a grim financial picture. The company reported a R3.2-billion after-tax loss, R6.1-billion in net debt and a R2.8-billion impairment on store assets.
The retailer started pursuing a two-phase capital raise of up to R12-billion. This strategy hinges on shareholder support, Boxer's performance and stabilising operations in a constrained economy.
While the company says its recapitalisation has 'significantly strengthened' its balance sheet, the outlook remains cautious.
How does this affect you?
For consumers, the Pick n Pay-FNB alliance appears to be paying off. Essentials like bread and burger kits are cheaper, while cashback benefits soften the blow of rising prices.
But for Pick n Pay shareholders and employees, the financial risks are harder to overlook. The company is still in recovery mode and the Springboks sponsorship, though high profile, adds pressure to prove value.
'Sentiment is being impacted by the current trading environment,' said Shireen Darmalingam, an economist at Standard Bank. 'While inflation remains largely contained and is expected to hover around the midpoint of the target range, uncertainty has risen. Tariffs, especially those imposed by the Trump administration, have pushed up break-even inflation and weakened brand confidence.'
Darmalingam added that retail sales volumes for February 2025 undershot expectations, growing by just 3.9% year-on-year, down from 7% in January, while food and beverage sales declined.
This adds complexity to Pick n Pay's equation. While sponsorship may increase brand visibility, the retailer still faces the hard task of executing a turnaround amid economic challenges. DM