Investors dump Pick n Pay as losses keep coming

The market has punished Pick n Pay following the release of its latest interim results, which showed the retailer’s core brand continues to record losses.

This comes amidst the implementation of Pick n Pay’s turnaround plan, which included a recapitalisation that has significantly improved the company’s balance sheet.

However, from an operational standpoint, the retailer’s challenges continue, with the core brand closing stores and struggling to reach and maintain profitability.

Pick n Pay CEO Sean Summers has warned shareholders about this “bumpy” ride from the get-go, saying a turnaround takes time and that the retailer cannot rely on quick wins.

He told Daily Investor earlier this year that the company must first crawl before it can walk, and then run again.

He explained that his focus is not on the speed of Pick n Pay’s turnaround but rather on the quality and sustainability of this transformation.

Amid the core brand’s struggles, discount retailer Boxer, in which Pick n Pay has a majority stake, continues to shine.

On Monday, 27 October, Pick n Pay released its interim results for the 26 weeks through August 2025.

On a group level, the company saw its turnover grow by 4.9% to R58.8 billion and its trading profit improve by 273.5% to R310 million.

However, this was largely driven by Boxer’s standout performance, as the retailer grew its turnover by nearly 14% to R22.52 billion and its trading profit by over 16% to R931 million.

Boxer was spun off and separately listed on the JSE in 2024 as part of Pick n Pay’s turnaround plan, although the retailer retained a majority stake.

Since its unbundling, Boxer has continued to go from strength to strength and provided a significant boost to the company’s latest results.

In contrast, the company’s core brand, Pick n Pay, proved to be a drag on the company’s latest interim results.

This segment reported that its turnover remained essentially flat at R36.3 billion and it recorded a trading loss of R621 million.

Notably, this loss is a 13.5% improvement from the first half of the company’s 2025 financial year.

The retailer attributed its loss to a reduction in its store estate, which declined by a net 59 supermarkets over the 26-week period.

Investors were seemingly not impressed by the retailer’s results, with Pick n Pay’s share price down as much as 9% following their release.

At the time of publication, the retailer’s shares have reversed some of their losses, down around 7% in intra-day trading.

Diving deeper

Daily Investor analyst Drikus Greyling took a deeper look at Pick n Pay’s latest interim results. He found that the Pick n Pay stores’ revenue remained virtually unchanged, only increasing minutely. 

Its revenue increased by only 0.06% from the previous interim period, growing from R36.29 billion to R36.30 billion.

This means Pick n Pay stores are not increasing their market share and seeing no real growth in revenue.

Pick n Pay South Africa, for instance, has seen its revenue on a downward trend, reporting a 0.4% decrease in revenue compared to the previous period.

Pick n Pay has previously explained that its strategy is focused on growing like-for-like sales while closing unprofitable stores in the Pick n Pay segment.

This forms part of the retailer’s store estate reset programme, which the retailer said is now largely complete.

With the release of the latest interim results, Summers explained that, going forward, any further changes to Pick n Pay’s store estate will simply be a normal part of assessing each store’s performance as leases come up for renewal.

“Critically, the optimisation of our store estate has removed a large number of loss-making stores out of the system, allowing us to serve our customers better and to support our long-term sustainable growth,” he explained.

By closing unprofitable stores, one would expect to see lower or even decreasing revenue. In turn, this revenue trade-off should be met with increasing profitability.

However, Pick n Pay has not been able to deliver on its profitability either. CFO Lerena Olivier said in the group’s results presentation that the group plans to return to profitability by the 2028 financial year.

While the retailer delivered a small trading profit in the second half of its 2025 financial year, Pick n Pay fell back into loss-making territory in the first half of its 2026 financial year.

This means that, thus far, shareholders have had no revenue growth within Pick n Pay stores and have had to endure continued losses.

The graphs below show the downward trend in Pick n Pay South Africa’s revenue and the Pick n Pay segment’s trading profit margin, respectively.