Super Smart: Pick n Pay is on the up in hard times

Business

Super Smart: Pick n Pay is on the up in hard times

From controlling labour costs to its loyalty programme, the retailer is doing well in difficult conditions

Larry Claasen


Investors will be waiting with keen interest to see what’s behind Pick n Pay’s expected a 9.6% rise in revenue when its results, for the 53 weeks to end-March, are released later this month.
The market liked what it saw when the group put out a trading statement saying it expected headline earnings to increase as much as 30% to R3,60 a share for the period. This positive forecast saw the grocery retailer share price close up 4% to R69.90 on Monday.
Although its numbers for the year are yet to come out, it looks like it performed a whole lot better than its great rival, Shoprite, which for the first time in 20 years has seen earnings slide in its latest results. Difficult local conditions and a problems in its cross-border operations were to the blame for Shoprite’s performance.
For its part, Pick n Pay is a company clearly on the up. But why?
The positive numbers coming out of the group didn’t come out of nowhere as the retailer has quietly been turning itself around over the past few years.
It has cleverly controlled labour costs, expanded into service station forecourts with BP, seen its clothing operations grow in strength, and turned its Smart Shopper loyalty programme into a revenue driver.
Which one of these initiatives has paid off the most is hard to say. What is clear is that the retailer is doing well in difficult conditions, and many want to see if its success can be replicated by others in the sector.

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