Nicola Mawson

Although Pick n Pay and Boxer returned what parent company Pick n Pay described on Tuesday as “steady like-for-like sales improvement from the Pick n Pay segment and another strong performance from Boxer Retail” for the 45 weeks to January 5, the retailer continues to face significant challenges.

In trading updates, Pick n Pay, said group sales for the period gained 3.6%, with Boxer being the star in the portfolio and reporting gains in sales of 11.4%. On a like-for-like basis, stripping out changes in store numbers, sales overall were up 3.3%, with Boxer achieving a 6.7% gain.

Pick n Pay shares soared 4.82% to R29.33 in late afternoon trade on Tuesday, while Boxer, which was spun out as a separate listing on the JSE at the end of last November, rose 1.55% to R64.25 in late afternoon trade.

Boxer is on track to meet its full-year guidance on superstore rollout, including Pick n Pay conversions, the retailer said. Ahead of its listing, Pick n Pay said Boxer should achieve overall sales growth of 10 to 12% and have opened 30 liquor outlets. However, liquor store openings have been adversely affected by delays in the granting of licenses, which is out of its control.

In a Boxer-specific statement, it said the team “looks forward to driving continued growth” in the 2026 financial year.

The group, which is anticipated to release its full-year results towards the end of May, said sales for its Pick n Pay brand gained 1.6% on a like-for-like basis. It is “driving to sustain and build on Pick n Pay Supermarkets' improved like-for-like sales momentum by further enhancing retail disciplines and working with franchisees to drive franchise sales,” it said.

The retailer noted that a core indicator of its turnaround for the Pick n Pay South Africa segment is like-for-like sales growth in local supermarkets, which excludes standalone clothing stores. It said that it is seeing a “steady consecutive improvement” in this metric.

Under CEO Sean Summers, appointed in October 2023 to improve the retailer’s then precarious position, Pick n Pay is nearing the end of a turnaround plan that included sorting out its balance sheet in a bid to reverse shrinking market share and substantial financial losses.

Pick n Pay also said that the implementation of what it calls the “Store Estate Reset” plan resulted in total sales lagging like-for-like sales momentum, “which was a natural consequence of the planned store closures and conversions”. This plan involves creating a smaller yet more profitable Pick n Pay store footprint.

During the 45 weeks, 32 stores on a net basis were closed, of which 24 were company owned and eight were franchises. It converted five company owned supermarkets to a franchise model.

Clothing sales growth in standalone stores gained 10% over the period, with momentum improving in the latter 19 weeks to January 5, it said. However, on a like-for-like basis, this metric only showed a 1.7% gain for the 45 weeks, accelerating to 3.6% in the latter 19 weeks.

“Online sales growth for the Period was 42.5%, driven by continued growth of Pick n Pay asap! and Pick n Pay Groceries on the Mr D app,” Pick n Pay said.

Nadine Chetty-Khan, an investment analyst at Private Clients by Old Mutual Wealth, said the store closures, while inevitable, “don’t address the deeper issues threatening Pick n Pay's position in the retail space”.

Chetty-Khan said the retailer, which was losing ground to competitor Shoprite, needs a “stronger competitive strategy beyond cost-cutting”. She added that, “if management executes well, this could be the start of a turnaround”.

BUSINESS REPORT