Sean Summers’ Pick n Pay turnaround plan on track

Pick n Pay CEO Sean Summers said the plan to restore the company to its former glory is on track and yielding positive results.

Pick n Pay released its results for the year through 25 February 2024 today, which revealed a company in desperate need of care and attention.

It reported a 373% decrease in its net profit, dropping from a R1.17 billion profit to a R3.2 billion net loss. 

Earnings per share also swung to a loss, with basic earnings per share declining from 243.37 cents per share in 2023 to a loss of 661.67 cents per share.

For the first time in Pick n Pay’s listed history, it has become technically insolvent, with total liabilities exceeding total assets by R183 million. 

The retailer’s total assets amount to R46.51 billion, while its total liabilities amount to R46.69 billion.

These results come after years where Pick n Pay has struggled to compete effectively against rivals like Shoprite and Spar.

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

Last year, this poor performance prompted Pick n Pay to replace CEO Pieter Boone with former chief executive Sean Summers.

Summers is a Pick n Pay stalwart who worked for the company from 1974 to 2007 and served as CEO from 1999. During his tenure, Pick n Pay showed exceptional growth and was the clear grocery market leader in South Africa.

However, after he departed, Pick n Pay lost its edge and handed Shoprite the lead in the retail market.

With Summers’ return, many believe the company could turn things around and be restored to its former glory.

Summers told Daily Investor that Pick n Pay’s big problem is falling out of love with retail.

He explained that customers’ expectations have not changed since he’s been gone. Rather, Pick n Pay has simply stopped being able to meet them.

Therefore, Summers outlined his Back-to-Basics strategy, which has six priorities and will focus on simplicity, quality, affordability and sustainability to help the iconic brand reclaim its former glory.

“Given the market environment, it is a reasonable and actionable plan. More importantly, the right operational team with the right experience is now in place to execute it,” the company said.

Looking forward, Summers said he is excited about changing Pick n Pay’s trajectory, which is starting to show positive trends again.

The company said the strategy Summers outlined has already been implemented, some in place since February, with encouraging early results. 

For the first ten weeks of FY25, Pick n Pay recorded positive like-for-like growth alongside a consistently strong performance from Boxer.