Pick n Pay closed stores across South Africa

Pick n Pay said it had made substantial progress on closing and converting loss-making stores, with 40 loss-making Pick n Pay supermarkets closed or converted.

This included closing 25 company-owned supermarkets, converting seven to franchises, and converting eight to Boxer.

When looking at Pick n Pay’s combined company-owned and franchise stores, the supermarket estate declined by a net of 45 stores to 570 supermarkets by March 2025.

The store closures formed part of Pick n Pay’s turnaround plan, which was needed to create a more sustainable business.

The turnaround plan aims to return the core Pick n Pay business to profitability and includes a ‘store reset plan’.

The company explained that there is a particular focus on eliminating losses incurred by specific loss-making company-owned stores.

“Where appropriate, loss-making supermarkets are either closed or converted to Pick n Pay franchises or Boxer stores,” it said.

Pick n Pay is also focused on improving its remaining stores’ performance by driving like-for-like sales and optimising the operating model.

Pick n Pay CEO Sean Summers has previously said they would close or convert over 100 stores, which is what is playing out now.

Early signs suggest that the strategy is working. Like-for-like turnover for company-owned supermarkets increased 3.3% year-on-year, with positive volume growth.

“Steady progress has been made over the past 18 months, with like-for-like growth improving from -0.5% in H2 FY24 to 3.1% in H1 FY25, and 3.6% in H2 FY25,” Pick n Pay said.

However, franchise stores remain a poor performer in the Pick n Pay stable. Like-for-like sales growth has been slower to recover, at -0.1% for FY25.

“Franchise received significant management attention, with Pick n Pay working to improve the overall franchise offering to drive turnover and profitability for all parties,” it said.

“Franchise turnover has more recently improved with like-for-like sales growth improving from -1.4% in H1 FY25 to 1.1% in H2 FY25.”

Pick n Pay turnaround strategy execution

Pick n Pay said in a press statement that its turnaround is taking shape as the retailer reports a year of recovery after solving its debt challenges.

Pick n Pay CEO Sean Summers said the latest financial results contained no surprises and that the company is meeting the guidance it gave to the market.

“Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction,” he said.

The first of its six strategic priorities announced in May 2024 was to recapitalise the group and strengthen its balance sheet.

It completed its two-step recapitalisation plan. It raised R12.5 billion through the R4.0 billion Pick n Pay rights offer and R8.5 billion through the Boxer JSE listing.

This helped restore the Pick n Pay Group to a net cash position of R4.2 billion and allowed it to implement many of its other plans.

“We have started to give much-needed attention to our core Pick n Pay supermarkets and we are pleased to see the early results in reporting positive like-for-like sales growth,” he said.

“This was notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market.”

The third priority was to reset its store estate. Pick n Pay has made progress in converting to Boxer, franchising, or closing stores with no prospect of profitability.

“Importantly, a great deal of focus was put into certain of the loss-making stores, with some now returning to profitability,” he said.

“The retailer has also started opening and committing to new stores and will increasingly refurbish its supermarkets to meet and exceed customer expectations.”

Pick n Pay Clothing delivered 11.6% growth from standalone stores in the 2025 financial year and reported market share gains.

Pick n Pay Clothing opened a net 30 company-owned stores during FY25, bringing the total number of stores to 415.