Skip to main content

Financial pressure on consumers weighs heavily on Pick n Pay performance

| Retailer trading results

Pick n Pay chairman Gareth Ackerman said yesterday that the six months from March to August were among the most difficult South African consumers have had to endure in the recent past.

Speaking at the presentation of the company’s results for the first time after his father and Pick n Pay founder Raymond Ackerman died last month, Ackerman said load shedding reached its worst level since 2008.

He said this had a disproportionately negative impact on the retail industry.

“Food inflation topped 14% in March, its highest level in 14 years, and the price of fuel has risen by about 20% so far this year. Interest rates also reached their highest point since 2009, thanks to 10 successive increases since the end of 2021.

“All of this has proved to be a potent cocktail that has once again put consumers under extreme financial pressure. When I spoke to you a year ago, I referred to several worsening problems in the macroeconomic and socio-economic spheres. Today, I am disappointed that we have seen little or no progress in addressing them,” he said.

Ackerman said South Africa was negotiating one of its most turbulent periods since 1994, and there is significant uncertainty about the country’s future trajectory.

“The performance of Pick n Pay to some extent reflects the difficulties in the economy and society. Even though we are proud of our efforts to support consumers with lower prices and keep internal price inflation well below CPI (for) food, there is no avoiding the conclusion that the group’s result is extremely disappointing,” he said.

There are, however, some encouraging signs and the Pick n Pay story currently is really one of two main operating brands – Boxer and brand Pick n Pay.

Boxer delivered double-digit South African sales growth and is the main growth driver for the group at the moment.

Under the Pick n Pay brand, the same can be said of Pick n Pay Clothing, where sales at standalone stores also grew in double digits, leading the market.

“We have seen superb online sales growth, driven by strong growth in our on-demand platforms, asap! and Pick n Pay groceries on Takealot’s Mr D app. Income from value-added services also grew encouragingly, as the group focused on maximising opportunities in banking services, financial services, and mobile.

“We are encouraged that our businesses in Zambia and Zimbabwe have also performed really well notwithstanding the political issues in Zimbabwe,” he said.

Ackerman said the performance of its core Pick n Pay business, however, had not met expectations.

“The board reflected on the latest performance of the Pick n Pay grocery business and resolved that decisive action was required if we wanted to turn this business around from its current trajectory.

“The board has appointed Sean Summers as CEO to lead the company with immediate effect. Sean understands these basics and how to implement them better than most, and we have confidence in his ability to build back the heart of what Pick n Pay does,” Ackerman said.

He thanked outgoing Pick n Pay CEO Pieter Boone for his dedication.

BUSINESS REPORT

Pin It

Related Articles

Pick n Pay feels the pain – expects over R3 bil...

By: Shaun Jacobs – Daily Investor In a trading statement for the 52-week period that ended 25 February 2024, Pick n Pay said it expects the company to post a loss of between R3.14 billion and R3.38 billion for the 2024 financial year.&n...

Clicks reports resilient first-half as earnings...

By Jacqueline Mackenzie - Business Live The group expects full-year Heps to increase by between 10% and 15%

Positive growth continues for The SPAR Group

SPAR Group turnover increased by 8.8% for the 24 weeks ended 15 March 2024, with a well-maintained policy of continued capital investment  across the wholesale and retail value chain.

Unaudited results for the 26 weeks ended 31 Dec...

Double-digit growth sees half year sales reaching R121 billion - Group sale of merchandise increased by 13.9% to R121.1 billion - Supermarkets RSA sale of merchandise increased by 14.6% to R97.5 billion - Diluted headline earnin...

Woolies online sales skyrocket — but still weak...

By: Staff Writer - MyBroadband South African fashion, home, and grocery retailer Woolworths saw online sales surge during the first half of its 2024 financial year. For the 26 weeks ending 24 December 2024, online sales in the fashion, beauty an...