PICK N PAY PLANS STORE OPENINGS AFTER ROBUST PANDEMIC RESULTS
Pick n Pay, the South African supermarket group, is reportedly investing tens of millions of dollars in new stores as it looks to increase its market share.
The retailer, which currently has 1,994 stores, is spending 2.5 billion rand ($174 million) on additional outlets, according to the Reuters news agency.
With its current market share of 16% predominantly the result of sales generated by affluent communities, Pick n Pay is said to be focusing its new investments on lower-income neighbourhoods.
The news comes shortly after the retailer announced its financial results for the 2020-21 financial year, in which “core food and groceries” in South Africa saw sales increase by 10%.
A Pick n Pay press release said that the coronavirus pandemic resulted in 4 billion rand ($278 million) in lost sales and 200 million rand ($13.9 million) in additional costs.
Given these pressures, the company described its 6.1% decline in group earnings in the year to February 28 as “an outstanding performance in unprecedented circumstances”.
Gross profit increased 4.7% to 18.4 billion rand ($1.28 billion), with a gross profit margin of 19.8%.
Prior to his retirement, the company’s outgoing CEO, Richard Brasher, said in the press release. “I am very proud of this performance. Our market-leading sales growth in a difficult environment shows how we have kept our focus on our customers in the most challenging of times.
“Once the impact of once-off costs is taken into account, our earnings performance was exceptional despite all the challenges and disruption of this extraordinary year.”
Pick n Pay said that the impact of Covid-19 disruption was managed by its operations outside South Africa through “exceptional cost discipline and working capital management”, adding that its franchise operations in a clutch of other African nations remained “resilient”.