South African grocery retailer Pick n Pay has announced a board-approved six-point strategy aimed at restoring its core supermarket business to profitability.
The retailer reported a disappointing full-year performance for the financial year 2024 (FY24), ending 25 February 2024. Trading profit fell to R385m and loss for the period was reported at R3.2bn.
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The company’s Boxer, Pick n Pay Clothing and online businesses continued to deliver strong results, while Pick n Pay supermarkets struggled.
The new Back-to-Basics strategy focuses on simplicity, quality, affordability and sustainability to help the iconic brand reclaim its market position.
The strategy includes resetting the store estate to create a smaller, more profitable Pick n Pay store network.
More than 100 loss-making supermarkets will be closed or converted to Pick n Pay franchises or Boxer stores.
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By GlobalDataThe reset will pave the way for a future-focused Pick n Pay store estate, targeting middle-income and more affluent customers with effective, modern and well-positioned stores.
The group will also refocus on products and services, aiming to improve the offer and drive sales, with a particular emphasis on fresh produce ranges and private label offerings.
The new operating model will aim to minimise waste, simplify processes and improve staff productivity, with a target of R1.3bn of benefits up to 2026.
As of 27 August 2023, Pick n Pay operated 1,423 company-owned stores.
In a significant shift the Ackerman family, Pick n Pay’s majority voting shareholder, is stepping aside amid the revamp.
The family’s investment-holding company, Ackerman Investment Holdings (AIH), has confirmed its support.
AIH will also relinquish the right to nominate the chairman, CEO and chief financial officer immediately, with the family’s representation on the board of directors reducing to three members from FY24’s Annual General Meeting.
Chairman Gareth Ackerman said: “This is a strong vote of confidence by the Ackerman family in the future of Pick n Pay.
“The changes in the control structure being announced today are intended to support the business in its transformation under the leadership of CEO Sean Summers and his management team.”
