While retail group Pick n Pay has reported slower financial performance in its full year results, the online sales business was marked by a significant surge.
According to the retail giant’s sales update and trading statement for the 52 weeks ended 25 February, released today, its online business delivered sales growth of 74.4% during the period, driven by ongoing improvements in the Pick n Pay ASAP! app and its Mr D partnership.
Pick n Pay South Africa sales showed slow growth, while Boxer South Africa sales growth was 17.5%, delivering total South African sales growth for the period of 5.2%, notes the statement.
Internal selling price inflation for the period was 7.3%, decreasing from 8.3% in the first half of the period to 6.4% in the second half.
The rest of Africa division increased sales for the period by 10.1% and 12.5% on a constant currency basis.
Pick n Pay credited the surge in online sales to its Ekuseni strategy, which saw it forge relationships with key partners, after having reached a commercial services agreement with the Takealot Group in 2022.
The on-demand grocery delivery app was re-launched in an effort to compete with the Checkers Sixty60 mobile app.
In addition to its Pick n Pay Home online store, Pick n Pay offers more than 500 general merchandise products on Takealot’s Mr D app.
The company says it is finalising its full year results for the period, to be announced next week. It anticipates reporting a resilient underlying operational performance for FY24 in a challenging operating environment.
“FY24 group earnings have been impacted by a R2.8 billion non-cash asset impairment of Pick n Pay Supermarkets stores. Group CEO Sean Summers' new strategic plan has been approved by the board, the relevant details of which will be shared with investors as part of the FY24 results presentation next week.
“The plan is primarily focused on turning around the Pick n Pay Supermarkets business, while reinforcing the group's strategic initiatives in the high-growth Boxer, Pick n Pay clothing and online businesses, and unlocking value for shareholders,” according to the statement.
The impairment, which covers right-of-use and physical store assets, has two components:
- R1.8 billion impairment of assets of selected loss-making company-owned Pick n Pay stores, which will be closed or converted to Pick n Pay franchises or Boxer stores under the group's strategic plan.
- R1 billion impairment of the assets of underperforming company-owned stores that will remain open.
The group says it will provide segmental profit disclosure for Pick n Pay and Boxer in the FY24 results announcement next week. It expects to improve its financial performance over the next two years.
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