South African retail giant Pick n Pay has reported a significantly smaller loss before tax for its full-year results, signalling early signs of recovery as the company pushes forward with a multi-year turnaround plan.
The company reported a loss before tax and capital items of 237 million rand ($13.3 million) for the 53 weeks ending March 2, 2024. This marks a major improvement from the 1.4 billion rand loss recorded in the previous year. The results reflect a substantial reduction in losses from its core Pick n Pay business, which narrowed its full-year trading loss by 1 billion rand, bringing it down to 549 million rand.
In a statement on Monday, CEO Sean Summers—who returned to lead the company in October 2023—acknowledged the uphill task he faced but expressed optimism about the road ahead.
“When I returned in October 2023, I stated that the recovery of Pick n Pay would be a multi-year process and that things would get worse before they got better,” Summers said. “It is our sense that we see this unfortunate chapter now bottoming out, and we have recalibrated our recovery programme to break even in financial year 2028.”
One of the key factors contributing to the improved performance was a 27.3% reduction in net interest paid, which the company attributed to the early positive effects of its recapitalisation strategy. The reduced debt service costs provided relief to the company’s bottom line, supporting operational improvements.
Group turnover rose by 5.6% year-on-year, reaching 118.6 billion rand. Much of this growth came from Boxer, the company’s low-cost grocery chain, which grew by an impressive 13.2%. Boxer, which was spun off and listed on the Johannesburg Stock Exchange in 2023, has emerged as a key growth engine for the group.
The core Pick n Pay supermarket business, which has been under pressure from both rising costs and stiff competition in the South African retail sector, managed to return to a trading profit in the second half of the financial year—an important psychological and operational milestone.
Though the group remains in the red, analysts say the narrowing of losses and positive momentum in the second half show that Pick n Pay is slowly regaining its footing. The company’s renewed focus includes operational efficiency, debt restructuring, cost reduction, and leveraging growth in discount retailing through Boxer.
Summers’ leadership is expected to play a pivotal role in stabilising and growing the company, especially as Pick n Pay continues to face a highly competitive retail landscape, weakened consumer demand, and inflationary pressures.
The company’s 2028 break-even goal reflects a long-term outlook rather than short-term profitability, with Summers making it clear that the current financial year will still see challenges. Nonetheless, the return to profitability in parts of its core business, combined with the strategic push through Boxer, is giving shareholders and market watchers a reason for cautious optimism.
With economic conditions still uncertain and consumer confidence fragile in South Africa, the company’s strategy appears focused on rebalancing its brand portfolio, improving customer experience, and expanding its footprint in cost-conscious retail segments.
As of the report date, $1 equals 17.8156 rand.
