Table of Contents
Key Points
- Pick n Pay accelerates store closures, shutting down 32 outlets to streamline operations and reduce losses, part of its restructuring plan.
- Despite store closures, like-for-like sales rose 1.6%, with Boxer sales up 11.4%, reflecting improved performance in the final 19 weeks.
- Boxer saw 11.4% sales growth, while online sales surged 42.5%, contributing to Pick n Pay's recovery.
Pick n Pay, the leading South African retailer partly owned by the Ackerman family, is accelerating its store closures as part of a larger restructuring plan aimed at strengthening its financial position. The company has closed 32 additional stores across the country, signaling its effort to streamline operations and reduce losses.
In a recent trading update for the 45 weeks ending Jan. 5, 2025, Pick n Pay revealed that 24 company-owned stores and eight franchise locations have been shut down. Five company-owned outlets have also been converted into franchise stores, as part of the retailer’s “Store Estate Reset” strategy, which focuses on prioritizing more profitable locations.
Stronger sales in final 19 weeks
This aggressive restructuring comes on the heels of a significant after-tax loss of R3.2 billion ($171 million) for the 2024 fiscal year, primarily due to impairments on store assets.
As part of the Store Estate Reset plan, total sales performance was impacted, as expected, by the store closures and conversions. Despite this, like-for-like sales grew 1.6 percent, with Pick n Pay SA reporting a 1.9 percent increase. The final 19 weeks of the period showed an even stronger performance, with a 3 percent increase in sales.
Boxer, a key subsidiary, saw an 11.4 percent increase in sales, with a 6.7 percent like-for-like growth. Clothing sales within the Pick n Pay segment rose 10 percent, with a notable improvement in the latter part of the period. Online sales grew by an impressive 42.5 percent, driven by the growth of Pick n Pay asap! and Pick n Pay Groceries through the Mr D app.
Additionally, the retailer reported a sharp decrease in internal selling price inflation, which fell to 2.4 percent from 8.2 percent in FY24, reflecting better pricing strategies and cost control measures. To strengthen its financial position, Pick n Pay successfully raised R4 billion ($213 million) in a rights issue in August 2024, which was heavily oversubscribed.
Pick n Pay strengthens retail focus
With over 2,000 stores across eight African countries, Pick n Pay remains one of the dominant players in South African retail, trailing only Shoprite. The Ackerman family holds a 16.71 percent stake (124.68 million shares) and continues to play a key role as the company repositions itself.
The group is focused on sustaining and building on Pick n Pay Supermarkets’ improved sales momentum by enhancing retail practices and working closely with franchisees to boost franchise sales. Boxer’s JSE listing brought in an additional R8.5 billion ($452 million), injecting liquidity and supporting the company’s turnaround efforts.
