Pick n Pay turnaround taking shape as it delivers on first year of recovery plan
Pick n Pay cut its trading loss by R1 billion, but the recovery plan is only in its first year and will take another two years to bear fruit.
Pick n Pay has delivered on the first year of its multi-year recovery plan as the retailer's turnaround is taking shape.
The group's results for the 53 weeks to 2 March 2025 were announced this morning. They show that Pick n Pay reduced its trading loss by R1 billion, well ahead of forecast, while its like-for-like turnover and customer growth see momentum rebuilding.
Announcing the results, CEO Sean Summers said there are no surprises.
'We are meeting the guidance that we have given every six months, making calm and steady progress. You cannot rely on quick wins in our situation, and it will continue to be a journey as we rebuild our Institutional Memory.
'This was an important year for Pick n Pay as we executed the first leg of our operational and financial recovery. We are exactly where we said we would be when presenting the strategy last May, and in some aspects, we are tracking slightly ahead.
'Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction.'
ALSO READ: How did Pick n Pay do it? From technically insolvent to growing sales in months
Recapitalising Pick n Pay
The first of its six strategic priorities announced in May last year was to recapitalise the Pick n Pay Group.
In this financial year, the group completed its two-step Recapitalisation Plan, raising R12.5 billion through the Pick n Pay Rights Offer (R4.0 billion) and the Boxer JSE listing (R8.5 billion) and restoring the group to a net cash position of R4.2 billion.
'We started to give much-needed attention to our core Pick n Pay supermarkets, and we are pleased to see the early results in reporting positive like-for-like sales growth, notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market,' Summers said.
Accelerating like-for-like sales
The second of its priorities was to accelerate like-for-like sales growth, and the group's turnover for the 53-week period increased by 5.6%.
Over the past 18 months, Pick n Pay company-owned supermarkets delivered consistent gains in like-for-like sales growth, improving from -0.5% in the second half of the previous financial year to +3.6% in the second half of the current financial year.
'Our franchisees also showed steady positive recovery, and this positive like-for-like momentum continued in the first eight weeks of the financial year.'
Summers also pointed out that the group maintained its focus on keeping selling prices down, recording inflation in Pick n Pay of just 2.1% for the current financial year, sharply down on the previous financial year's 8.2% and well below Statistics SA's food price inflation of 3.9%.
ALSO READ: Can Pick n Pay's new look fix their troubles? New store design revealed
Resetting Pick n Pay's store estate
The third priority was to reset Pick n Pay's store estate and the group made considerable progress either converting to Boxer, franchising or closing those stores where there was no prospect of their returning to profitability, Summers said.
'Importantly, a great deal of focus was put into certain loss-making stores, with some now returning to profitability. We also started opening and committing to new stores and will increasingly refurbish our supermarkets to meet and exceed customer expectations.'
Pick n Pay's leadership and people
The fourth pillar of the strategy was leadership and people. The ongoing focus on driving operational execution and restoring its Institutional Memory required strong leadership and engaged employees.
Summers said key steps have already been taken, including staff training to improve the customer experience, reinstating regional leadership structures and launching a campaign to reignite employee pride and purpose.
ALSO READ: Will Boxer listing on the JSE save Pick n Pay?
Strengthening partnerships
The fifth pillar, strengthening partnerships, was clearly demonstrated in the tie-up with FNB e-Bucks, which already helped to attract customers across all segments. eBucks recently won three major awards, including best financial services loyalty programme in the world.
Summer pointed out that the new four-year Tier 1 Springbok rugby sponsorship further amplified brand visibility and national pride.
'We celebrate the extraordinary role that our Springboks and sport play in unifying our country.'
He said the retailer remains focused on innovation, adaptability and income diversification through its popular Smart Shopper programme, growing retail media capability and omnichannel platforms, while expanding value-added services revenue.
'More good news was growth of 48.7% in online sales for the 53 weeks, led by asap! and PnP groceries on Mr D. Pick n Pay asap! has grown to 600 locations and franchisee adoption of asap! doubled in two years, with new growth potential unlocked with the launch of the new asap! App.
'The growth in scale now resulted in achieving profitability on a fully costed basis. 'We are very happy with our balance between clicks and bricks,' Summers said.
ALSO READ: Boxer shares worth R53 million traded since listing
Good news from Pick n Pay Clothing with 11.6% growth
Pick n Pay Clothing delivered 11.6% growth from standalone stores in the new financial year and reported market share gains. It opened net 30 company-owned stores during the financial year to bring the total estate to 415 stores.
'When I returned in October 2023 I stated that the recovery of Pick n Pay would be a multi-year process and that things would get worse before they got better.
'It is our sense that we see this unfortunate chapter now bottoming out and we have recalibrated our recovery programme to break even in financial year 2028.
'The journey of restoring Institutional Memory for long-term sustainability and success continues, and we are investing ahead of the recovery, ensuring a strong future-fit business with energy and conviction. Importantly, our customer base is steadily growing as one by one they experience the change.
'It is with a passionate sense of pride and honour that I have confirmed an extension to my contract until May 2028, thereby ensuring leadership continuity in the short term, followed by an orderly succession process,' Summers said.
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