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Pick n Pay revealed the struggles of its supermarket chain, with sales falling 0.8% in the 21 weeks to July 21. The company described the performance as “disappointing”.
However, this needs to be seen in the context of internal sales price inflation of 4.7%, which meant that sales at its franchise supermarkets fell 5.5% in the March-July period compared with the same period last year.
In contrast, its franchise stores as a whole struggled, while sales at its directly-operated supermarkets (and hypermarkets) (excluding independent clothing stores) grew 3.6%.
The company said “improvements in retail discipline” meant its retail sales recovered strongly from -0.5% in the second half of the previous financial year to 3.6% for most of the first half of the 2025 financial year.
“The return to sales growth in Pick n Pay hypermarkets was particularly noteworthy following a period of underperformance,” the company added.
Unboxing the Boxer
The group has become more granular in its reporting in recent years, with Boxer’s revenue (and sales growth) disclosed separately from the 2023 financial year under former CEO Pieter Boone.
With the (forced) decision to list Boxer separately later this year, its margins and profitability are now public.
Disclosing the results of the franchise division separately is not surprising as chief executive Sean Summers and the group must demonstrate that the turnaround of its supermarket business is underway.
Each unit faces its own dynamics and trajectories.
The group stressed that “in recent years, company-operated supermarkets have rarely outperformed franchise supermarkets.”
“While (the company) believes this reversal of trend further validates the early progress made in the company’s transformation of its own-owned supermarkets, reviving the performance of its franchise stores is the top priority at this time.”
Its franchise division is large, with around 250 supermarkets in South Africa, while company-owned supermarkets number around 300. – Moneyweb
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