SOUTH AFRICA – South African retail chain, Pick n Pay reported an increase in group turnover by 4.3% to R93.1 billion (US$6.5 billion) for the full year ended February 2021, compared to R89.3 billion (US$6.2 billion) attained in the previous corresponding period.
The gains were however offset by trading restrictions on non-essential goods and services for parts of the year, which resulted in an estimated R4 billion (US$279.5 million) in lost sales, and R200 million (US$13.9 million) in additional costs related to the group’s operational response to the Covid-19 pandemic.
Headline earnings per share (HEPS) for the period, the main profit measure in South Africa fell by 21.4% to 229.31 cents from 291.90 cents.
According to the company, it has recorded a strong performance in a trading year that fell almost entirely within the Covid-19 national state of disaster.
It delivered market-leading sales growth of 10% in core food and groceries in South Africa, underpinned by sustained improvements across the group’s customer offer.
Online sales jumped with a 150% increase in active online customers, said the retailer, which also operates in Zimbabwe and Zambia, as people avoided crowded malls and shops.
“Our online business responded extremely well to cater for customers in the lockdown, doubling scheduled deliveries and click n collect orders.”
Pick n Pay Chief Executive Officer – Richard Brasher
Grow online business
Leveraging on the growth of online sales, Pick n Pay plans to integrate its various shopping channels into a new website to push for stronger market.
“Our online business responded extremely well to cater for customers in the lockdown, doubling scheduled deliveries and click n collect orders.
“We are now going to integrate our various online channels by launching PicknPay.com. Customers will in future be able to shop seamlessly with Pick n Pay anytime, anywhere and in whichever way they choose,” said chief executive officer, Richard Brasher.
As a result of consistent levels of availability and good on-time delivery rates, the company’s customer satisfaction was up 8.5 percentage points year-on-year.
It added that its Bottles delivery service, which was acquired and integrated into its operations during the period under review, is the highest-rated mobile app in its category, ahead of any other online grocery delivery service in South Africa.
Focus on lower-to-middle-income customers
Other that steering towards growth of its online business, the grocery retailer is focusing on increasing store footprint in the lower-to middle-income communities of South Africa.
To this end, Pick n Pay is eyeing Massmart’s Cambridge Food chain with Brasher saying, “Massmart did suggest that they are considering these assets to be non-core to them. And you can see from the smile on my face, those kinds of assets are core to us.”
He said looking at the food and grocery retail sector in South Africa, the bulk of the growth would be in what he characterises as the “less-affluent” part of it.
This section of the retail market is not only the largest but is also expected to outgrow the “middle” and “more affluent” sectors over the next few years.
Aligned with this strategy, Pick n Pay has converted 34 franchise stores into company-owned stores this year – including 22 value supermarkets.
This will provide customers with a revitalised, modern and convenient shopping experience and delivering stronger trade performances and higher investment returns off a significantly reduced and tailored range.
