Pick n Pay delivered modest sales growth during the opening five months of its financial year, with strong online demand and improving clothing sales signalling continued progress in its long-term recovery strategy despite ongoing economic pressures and an unresolved labour dispute.

For the 20 weeks ended 19 July, the retailer increased group turnover by 2.7%, while like-for-like sales rose 2.5%.

Within the core Pick n Pay business, like-for-like sales improved by 2.6%, although total turnover remained unchanged from the previous year. In South Africa, comparable sales increased by 1.9%, but turnover declined 0.4% after the retailer completed the closure or conversion of several underperforming company-owned supermarkets as part of its restructuring programme rather than because of weaker consumer demand.

Boxer continued to be the group's strongest performer. The discount retailer, which was separately listed on the JSE in 2024, recorded turnover growth of 7.2%, while like-for-like sales increased by 2.2%.

Although Boxer maintained its market share gains, its growth slowed compared with the 10.9% increase achieved in the second half of its 2026 financial year, reflecting the continued impact of cautious consumer spending.

During the reporting period, Boxer opened 19 new stores, including six superstores and 13 liquor outlets. Management also reaffirmed its expansion plans announced at the time of its listing, with the retailer aiming to add about 500 stores over the medium term. The company said its current development pipeline is the strongest it has seen, positioning Boxer as a key contributor to future earnings.

Online shopping remained the fastest-growing part of the business, with sales jumping 37.5%. Growth was driven by the Pick n Pay asap! delivery service as well as grocery sales through the Mr D platform. The performance reflects the increasing importance of rapid grocery delivery as South African retailers continue investing in digital shopping and AI-powered customer experiences.

The clothing division also showed signs of recovery. Sales at standalone clothing stores rose 3.3%, while like-for-like sales declined 1.3%—a notable improvement from the 5.6% contraction recorded in the previous six-month period.

Company-owned supermarkets, which account for most of Pick n Pay South Africa's revenue, achieved like-for-like sales growth of 3.3%, supported by estimated volume growth of 2.0%. Franchise supermarkets also improved, posting like-for-like growth of 1.3%, with both businesses performing better than in the previous half.

Despite these gains, Pick n Pay said trading conditions remain challenging, pointing to slow economic growth, high fuel costs and subdued food inflation as factors limiting sales growth.

The retailer added that while Boxer continues to outperform, the core Pick n Pay business must complete the remaining steps in its turnaround strategy, including finalising its Section 189A labour consultation process, to achieve its planned break-even target.

The labour consultation remains one of the group's biggest outstanding challenges. The process, which began in May under the CCMA with the South African Commercial, Catering and Allied Workers Union (Saccawu), aims to negotiate changes to store employee terms and conditions as an alternative to job cuts.

However, the matter remains unresolved after Saccawu referred a dispute to the CCMA and also approached the Labour Court. With CEO Sean Summers having already forfeited share-based incentives because of the slower-than-expected recovery, resolving the labour process is viewed as a critical step towards delivering the profitability targets promised to investors.

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