Pick n Pay suffers big sales decline

Pick n Pay South Africa stores saw no growth in sales in the first half of this year, and taking its internal selling price inflation into account, sales declined by almost 10%.

In a trading update for the first half of the 2024 financial year, the retailer said its South Africa sales growth for this period was 4.4% – or 0.9% like-for-like. Like-for-like retail sales growth refers to the growth in sales as recorded by the same number of stores a year ago.

The retailer reported that its Pick n Pay South Africa sales declined 0.3% – or 0.0% like-for-like – in the period.

However, Pick n Pay said its South African internal selling price inflation for the 20-week reporting period was 9.5%. Simply put, it means sales declined by 9.5% over the period.

Pick n Pay said the slower sales momentum relative to the 3.2% reported for H2 FY23 resulted from reduced promotional activity. 

This is because the retailer had to manage the impact of “extraordinary operating cost pressures caused by elevated load-shedding”. 

However, Pick n Pay said its sales momentum recovered towards the end of the period as reduced load-shedding in June and early July enabled it to intensify its promotional programme. 

Pick n Pay South Africa’s sales growth for the last three weeks of the period was 2.4% – or 2.9% like-for-like. 

“Both Pick n Pay QualiSave and the stores that have undergone the customer value proposition (CVP) upgrade are outperforming the remainder of the estate,” the retailer said.

Boxer South Africa stores saw significantly more sales growth than its Pick n Pay stores, growing by 15.4% – or 3.0% like-for-like – in the period. 

“Boxer continued to deliver strong sales growth, despite the high base of 27.2% sales growth recorded for H1 FY23,” the company reported. 

This brought the retailer’s total South African sales to 4.4% – or 0.9% like-for-like. 

Pick n Pay’s Rest of Africa sales grew by 15.9%, and group turnover came in at 4.8%.