Pick n Pay to close 32 additional Stores in South Africa

The prominent South African retailer, Pick n Pay, has declared the closure of 32 supermarkets nationwide as part of its comprehensive turnaround strategy. This decision is aimed at stabilizing the business following substantial financial setbacks in recent years.

In its trading update for the 45 weeks concluding on January 5, 2025, the company disclosed that 24 of the closures pertain to company-owned stores, while eight are franchise locations. Furthermore, five company-owned stores have been transitioned into franchise operations.

This initiative is a component of the retailer's 'Store Estate Reset' plan, which seeks to enhance operational efficiency and concentrate on more profitable sites. 

Despite these closures, Pick n Pay has demonstrated consistent progress. Like-for-like sales increased by 1.6%, with Pick n Pay South Africa reporting a 1.9% rise. However, when excluding like-for-like adjustments, the overall sales experienced a decline of 0.4% at the group level and 0.1% for South Africa.

The group initiated a significant turnaround strategy after incurring an after-tax loss of R3.2 billion for the fiscal year ending February 25, 2024 (FY24). This loss was preceded by a R2.8 billion non-cash impairment on the assets of company-owned stores.

During this period, Pick n Pay Grocery recorded a trading loss of R1.5 billion, which overshadowed Boxer’s trading profit of R1.9 billion. According to The South African website, part of the turnaround strategy included raising R4 billion from shareholders through a Rights Offer in August 2024, which was more than double oversubscribed, as well as the separate listing of Boxer stores, contributing an additional R8 billion.

Not all segments of the business encountered difficulties; clothing sales in standalone stores increased by 10%, and online sales surged by 42.5%, propelled by the success of Pick n Pay asap! and collaborations with the Mr D app.