Pick n Pay Closes 19 More Stores as Turnaround Effort Gains Momentum

Retailer narrows losses, cuts underperforming outlets and targets a return to profitability by 2029.

Pick n Pay has reported an improvement in its financial performance for the first half of its 2027 financial year, although the retailer remains loss-making as it continues implementing its turnaround strategy.

The group reduced its headline loss by 31.9% to R299 million for the six months ended 31 August 2026, compared to a loss of R439 million during the same period a year earlier.

Despite the improvement, the retailer remains under pressure and has continued reducing its store footprint, closing 19 supermarkets over the past 12 months.

Store Closures Continue

As part of its recovery plan, Pick n Pay has focused on exiting underperforming locations and streamlining operations.

The closure of 19 stores reduced the group’s supermarket network to 520 outlets.

The strategy forms part of a broader restructuring programme launched in 2024 after the retailer faced severe financial difficulties and was declared technically insolvent.

Management believes reducing exposure to loss-making stores will improve long-term sustainability and support future profitability.

Losses Narrow Despite Tough Trading Conditions

The retailer reported:

• Turnover of R36.37 billion, largely unchanged from the previous year
• Trading loss reduced from R621 million to R516 million
• Headline loss reduced from R439 million to R299 million
• Headline loss per share improved from 59.77 cents to 40.71 cents

While revenue remained relatively flat, management highlighted progress in improving operational efficiency and strengthening underlying business performance.

Online Growth Provides a Bright Spot

One of the strongest areas of growth came from Pick n Pay’s digital operations.

Online turnover increased by 35.4% during the reporting period, reflecting continued growth in consumer demand for e-commerce and delivery services.

The retailer said the integration of Pick n Pay Clothing into the ASAP! delivery platform performed better than expected and contributed significantly to online sales growth.

Management believes digital expansion will remain an important pillar of its long-term strategy.

New Labour Model Introduced

Another major development is the introduction of a revised labour model aimed at improving efficiency and competitiveness.

Following consultations with labour unions and employee representatives, Pick n Pay reached an agreement on a new operating structure that will take effect from 1 November 2026.

According to the company, the revised model is intended to create a more flexible and sustainable workforce while helping the business restore profitability.

Chief Executive Sean Summers said the agreement provides greater certainty for employees while strengthening the retailer’s competitive position.

Profitability Still Several Years Away

Although improvements are becoming evident, Pick n Pay has cautioned that the turnaround remains a long-term project.

The retailer has not declared a dividend and does not expect to resume shareholder payouts until it returns to profitability.

Management continues to target a return to break-even and sustainable profits during the 2029 financial year.

Summers said the business has established important foundations but acknowledged that more work is needed to improve customer experiences, grow sales and enhance operational performance.

Competitive Retail Landscape Remains Challenging

Pick n Pay continues operating in a highly competitive retail environment dominated by rivals such as Shoprite, Checkers, Boxer, Woolworths and SPAR.

The retailer’s ability to reduce losses while maintaining sales levels will be viewed positively by investors, particularly as online sales continue gaining momentum.

However, the closure of additional stores highlights the ongoing challenges facing one of South Africa’s most recognisable retail brands.

For now, the retailer appears to be moving in the right direction, but management’s goal of returning to profitability will depend on sustaining operational improvements and rebuilding growth over the next several years.