Pick n Pay, one of South Africa’s leading retail chains, has announced plans to close or rebrand around 100 stores as part of a broader restructuring strategy. The decision comes amidst a period of stagnant growth and declining profitability for the retailer.
In a recent trading statement covering the 21 weeks ending 21 July 2024, Pick n Pay revealed that its company-owned supermarkets have significantly underperformed in recent years. As a result, the company has been forced to take drastic measures to improve its financial performance.
The closures, which have already begun, include 16 supermarkets, four of which are corporate-owned stores and 12 are franchise outlets. These closures are part of a larger strategy outlined by Pick n Pay CEO Sean Summers in May 2024.
Summers acknowledged the challenges facing the retail industry and the need for Pick n Pay to adapt to changing consumer preferences. He emphasised that the closures are not a reflection of the company’s overall health but rather a necessary step to streamline operations and focus on profitable stores.
The closures are expected to have a significant impact on Pick n Pay’s bottom line. However, the company believes that the long-term benefits of these measures will outweigh the short-term costs. By focusing on its most profitable stores, Pick n Pay hopes to improve its market share and profitability.
The closures also raise concerns about job losses and the impact on local communities. Pick n Pay has not yet provided details on the number of employees affected by the closures. However, it is expected that the closures will result in job losses for both store staff and corporate employees.
As Pick n Pay continues to implement its restructuring strategy, it remains to be seen whether these measures will be successful in turning around the company’s fortunes. The retail industry is facing significant challenges, and Pick n Pay will need to adapt quickly and effectively to remain competitive.
