SOUTH AFRICA – South African retailer Pick n Pay has grown its full year sales for the period ended February 2022 by 5.2% to R97.9 billion (US$6.6 billion).
The group’s South Africa segment increased sales by 5.1% to R94.5 billion (US$6.4 billion), with like-for-like sales growth of 4.4% as it delivered on its commitment to give customers lower prices and better value, with internal selling price inflation restricted to 2.9% over the year.
It’s Rest of Africa segment increased sales by 5.6%, and by 8.7% on a constant currency basis.
The company’s liquor business exhibited stellar performance, registering 57% growth in sales despite the loss of 66 liquor trading days due to alcohol sales bans.
During the period under review, the retailer was also impacted by civil unrest in July 2021, which cost the retailer around R1.8 billion (US$122m).
“The disruption as a result of damage to and closure of stores in the civil unrest, combined with the loss of the liquor trade, was most evident in [the second quarter], with sales growth falling to -0.7% for the quarter.
“The group was disproportionately impacted by the civil unrest relative to the market, as its concentration in KwaZulu-Natal and Gauteng struck at the heartlands of the group’s high performing Boxer and Pick n Pay Value businesses,” said Pick n Pay.
However, in the third quarter, the retailer showed a recovery from the unrest, with sales growth of 4.9%, which it attributed to reopening more than 180 damaged stores between July and November 2021. It also saw a strong Black Friday.
In the final quarter of its financial year, sales increased by 7.4% thanks to a strong festive trade performance.
Apart from strong growth in liquor sales, it also registered solid growth in its delivery service app ASAP!, which was relaunched in August 2021.
“ASAP! is only one element of the group’s online retail offer, which includes its traditional scheduled delivery service and a Click n Collect offer.
“The group’s combined online offer has delivered compound annual growth of 72.5% over the past two years,” said Pick n Pay.
Pick n Pay, which is due to release its annual results in May, expects its headline earnings per share to increase between 8% and 18%.
Reflecting on the group’s performance, Pick n Pay’s CEO Pieter Boone said, “We have delivered a resilient trading performance in some of the most difficult circumstances the group has ever faced … our growth in the first quarter, and again in our final quarter, shows that our underlying momentum remains solid.”
The retailer has also highlighted it is switching its focus from only the middle class to encompass both the higher-end customer and the low-income market.
To this end, it is trying to grow its Boxer brand, which is focused on the lower-income consumer, with a format that offers a limited range of 3,500 cheaper products.