Pick n Pay boosts profitability through store closures and conversions
Pick n Pay is pushing ahead with its recovery strategy, placing strong emphasis on closing or converting unprofitable stores across the country.
South African retailer Pick n Pay is making solid progress with its turnaround strategy, sharply reducing losses and achieving strong growth in its digital and clothing divisions while restructuring its store network.
For the financial year ending 2 March 2025, the group cut its headline loss by more than 60%, driven by a targeted recovery plan that involved closing or converting 40 unprofitable supermarkets across South Africa.
“Steady progress has been made over the past 18 months,” the group noted, highlighting improved like-for-like sales, which grew from -0.5% in H2 FY24 to 3.6% in H2 FY25.
Store closures and conversions drive profitability
As part of the group’s efficiency drive:
- 25 company-owned Pick n Pay supermarkets were closed
- 7 were converted into franchise stores
- 8 were rebranded as company-owned Boxer stores
During the year, Pick n Pay converted 15 of its stores—including 7 liquor stores—into Boxer-branded outlets.
These converted stores have performed better under the Boxer name, reinforcing the group’s repositioning strategy.
By March 2025, Pick n Pay had reduced its total supermarket footprint by a net 45 stores, bringing the total to 570 supermarkets, comprising 289 company-owned stores, 21 hypermarkets, and 260 franchises.
Losses significantly reduced
The Pick n Pay segment’s trading loss for FY25 declined to R549 million from R1.5 billion in FY24 – a reduction of approximately R1 billion.
This improvement was largely driven by a second-half swing to profitability, with a R170 million profit in H2 FY25, compared to an R864 million loss in H2 FY24.
Digital and clothing segments on the rise
While core supermarkets face continued challenges, Pick n Pay is seeing strong growth in its clothing and online operations.
Pick n Pay Clothing added a net 30 new stores, bringing its total to 415 locations. Like-for-like sales increased 7.7%, with 11.6% turnover growth from standalone stores.
Despite a slow start due to port delays and late seasonal changes, H2 like-for-like sales grew 3.8%, which the group says is encouraging given the high base.
Meanwhile, the retailer’s online retail business surged, with FY25 turnover growing by 48.7% year-on-year. Online sales, driven by the Asap mobile app and its partnership with Mr D, are now profitable on a fully costed basis.
The group reported triple-digit growth from franchise stores using Asap, highlighting growing adoption of the platform beyond company-owned stores.
As part of its digital overhaul:
- The Asap platform was fully re-engineered over 18 months
- A new Asap app launched in April 2025, integrating Smart Shopper, value-added services, and AI-driven features
- A revamped Pick n Pay website will debut with Asap on-demand service on 1 June 2025
The app remains in beta testing until September 2025, with new feature rollouts expected throughout FY2026.
Outlook
Pick n Pay’s leadership believes its multi-pronged recovery strategy is gaining momentum, with strong performance in the Boxer, digital, and clothing segments driving the overall turnaround.
Looking ahead, the group will continue to prioritise profitable growth, boost operational efficiency, and fast-track digital transformation as it reshapes its retail model in a highly competitive market.