Watch out Shoprite - Pick n Pay targeting lower-income shoppers with new stores
Pick n Pay says lockdown restrictions like the alcohol sale ban resulted in an estimated R4 billion in lost sales.
Clothing sales also took a knock due to the restrictions.
The group posted its results for the year ended 28 February 2021, on Wednesday.
Group turnover increased 4.3% year-on-year to R93.1 billion.
Core food and grocery sales rose by 10%, while liquor and tobacco sales were down 31%.
PnP will invest a further R2.5 billion in new stores, after opening 112 new outlets in 2020.
In line with its "new space growth" strategy, expansion focus will be on lower- to middle-income communities in South Africa.
Bruce Whitfield interviews outgoing CEO Richard Brasher.
It was a very interesting year for a 35-year veteran in the business... We stayed open and we stayed working when many other businesses struggled more during that time.Richard Brasher, CEO - Pick n Pay
Nobody had a rule book on the pandemic, so not all the decisions made will have been perfect... unfortunately the restricted sales cost us around R4 billion during the course of the year.Richard Brasher, CEO - Pick n Pay
This has been my last year but I can say this has been my best year. Our food and grocery business grew by 10% and I hadn't achieved that in the previous eight years, so every cloud...Richard Brasher, CEO - Pick n Pay
Netherlands-born Pieter Boone will be taking over from Brasher by the end of the month and was officially introduced at Wednesday's results presentation.
His focus is on an area that for many, many years Pick n Pay was happy to ignore - the lower-income segment of the market. Of course you've expanded into that market; you've grown Boxer during this time but that seems to be a very core focus for Pieter Boone.Bruce Whitfield, The Money Show host
He's already had enough of Shoprite's dominance of that segment of the market?Bruce Whitfield, The Money Show host
The reality is we transformed the Boxer business... and we turned it effectively into a limited range of discounts... That's been a very good opportunity for us to serve the market which, in fairness, Pick n Pay hadn't really covered that well.Richard Brasher, CEO - Pick n Pay
We've also learned to do value retailing in our Pick n Pay stores in the less affluent parts of the market. The reality is, it's still the largest sector of the retail market.Richard Brasher, CEO - Pick n Pay
We've got around 10% if you add the Pick n Pay share and the Boxer share together, and a 1% increase in that market would grow the turnover by R5 billion!Richard Brasher, CEO - Pick n Pay
Pieter's smart enough to spot an opportunity and we've laid it out on a plate...Richard Brasher, CEO - Pick n Pay
Listen to the in-depth interview with the outgoing Pick n Pay CEO below:
Source : https://previews.123rf.com/images/sunshineseeds/sunshineseeds2006/sunshineseeds200605267/149407994-johannesburg-south-africa-february-22-2017-entrance-to-local-pick-n-pay-supermarket-grocery-store.jpg