Why Pick n Pay kicked out Pieter Boone – and got Sean Summers back

An analysis of Pick n Pay’s performance shows why the retailer replaced Pieter Boone with former chief executive Sean Summers.

On Monday, Pick n Pay announced that Boone is stepping down as group CEO and will be replaced by Sean Summers, who was Pick n Pay’s CEO between 1999 and 2007.

Pick n Pay chairman Gareth Ackerman said the performance of their core Pick n Pay business has been poor over the past months and has not met expectations.

Summers is a Pick n Pay stalwart who worked for the company from 1974 to 2007. He became managing director in 1996 and CEO in 1999.

During his tenure as CEO, Summers made Pick n Pay the clear grocery market leader in South Africa.

Looking at Pick n Pay’s revenue, earnings, and share price illustrates why the board decided on the leadership change.

Under Boone, Pick n Pay achieved an average annual revenue growth rate of 6.1%. Over the same period, Shoprite achieved an average annual revenue growth rate of 11.5%.

Pick n Pay’s earnings also suffered under Boone and did not keep up with its main competitor.

Boone achieved an average annual net income growth rate of 0.95% compared to the average net income growth rate at Shoprite of 22% over the same period.

Unsurprisingly, Pick n Pay’s share price performed very poorly under the leadership of Boone, falling by 32% since he took the reins in 2021.

This is translated to a compounded annual loss of 14% over the 2-and-a-half-year period.

Enter Sean Summers

During Summers’ tenure as Pick n Pay CEO, he achieved an average annual revenue growth rate of 16% per annum.

Pick n Pay’s growth rate was significantly higher than the average annual revenue growth rate of 11% Shoprite achieved over the same period.

Pick n Pay also managed to generate more revenue than Shoprite during this period, passing Shoprite’s revenue from 2003 to 2007.

While Summers was CEO, Pick n Pay also achieved strong net income growth, averaging 17.5% per annum.

Pick n Pay’s income growth was, however, not as strong as the net income growth seen at Shoprite, which averaged 40% per annum.

The market rewarded Summers’ performance, and Pick n Pay’s share price increased by 476% between 1999 to when he stepped down in 2007.

This translates to an annual compounded rate of return of 24% during his time as Pick n Pay CEO.

This analysis shows why Pick n Pay asked Sean Summers to take over from Pieter Boone as chief executive and get the retailer back on track.

Summers said he was very excited to return to Pick n Pay and work on improving the company.

“Retailing is my passion, and this company is in my blood. I have great excitement and energy for the task ahead,” he said.

“I look forward to meeting our teams throughout the country. We are in this together, and we will succeed together.”