Latest news with #SeanSummers
Daily Maverick
27-05-2025
- Business
- Daily Maverick
After the Bell: Pick n Pay and the great recovery
One of the big factors that will draw customers to a supermarket is the prices on offer. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price. Some of the numbers are brutal for Pick n Pay. I wonder if you and your family had a particular supermarket chain that you almost grew up with? A place that seemed the natural place to shop? As a child growing up in the 1980s and then becoming more independent in the 1990s, it was obvious: Pick n Pay was the place to go. When I first looked for a place to rent in Joburg on my own in my mid-twenties (having previously lived in house-shares in London), I saw it as a sign that one place was near Killarney Mall. It had a Pick n Pay as an anchor tenant and I remember feeling almost nostalgic when I went into the store for my first big shop. I must have spent hours of my life there (and even more getting out of what was, at the time, Joburg's Worst Designed Parking Lot. A title now owned by Victory Park). Woolworths was still growing and, being in my twenties, was a place my parents went to and not me. It was with a shock a few months ago that I realised my children have hardly ever been into a Pick n Pay store. They have grown up in the era of Checkers. And it happened without me really paying much attention. Checkers Sixty60 There is a massive Checkers near where we live now, and we went to it several times, but what really sealed the deal of course was the Checkers Sixty60 delivery service. During the pandemic, we came to rely on it. By the way, much of the backroom work on that service was not done by Checkers at all. It was bought — I hope for a large amount — from Zulzi. And its founder Donald Valoyi has the most amazing story to tell about how he went from running a delivery service to students from two rooms in Fourways to creating Zulzi and then Checkers Sixty60 (in my interview with him several months ago, he did not want to say much about his contract with Checkers). In the meantime, Pick n Pay simply declined, and there seemed to be no reason to go back. Sean Summers does appear to be changing that. Yesterday, the group announced that it had reduced its losses from R1.4-billion in the previous financial year to R237-million now. That's still a loss though, and there is a lot more work to be done. One of the big (and obvious) factors that will bring customers to a supermarket is price. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price. Some of the numbers are brutal for Pick n Pay. For Shoprite Holdings, internal selling price inflation averaged just 1.9% for the six months to the end of December last year. That's tiny. Even in these difficult times, you might hardly notice the price of food going up by under 2% in a six-month period. Now one of the reasons a group like Shoprite can do that is because it has built up so much momentum it is able to put pressure on the suppliers that want access to its market. But its systems are also working, and working well. And it seems down to how workers at Checkers feel about their jobs. At my local Checkers, I was putting some (wine) bottles into a trolley recently when a worker dashed over with a box. Before I could even greet them properly, they were packing the box. It was just a good example of how invested this person has become in the Checkers story. Competing on price For Summers, he has to deliver a turnaround for Pick n Pay while also competing on price. And that is going to be a really tough task. Interestingly, he is now 72. And yet he is clearly relishing the challenge. I'm sure it is the private dream of many of us that, as you start to mature in years, some company somewhere urgently needs you. It must give him a tremendous sense of purpose. I think, and I hope, that at the end of it, despite my family's current reliance on Checkers (yes … and Woolies), that he succeeds. If he does, the book of how he did it, of how a big company like Pick n Pay was able to recover in a really tough competitive and trading environment, might be really important.
Mint
26-05-2025
- Business
- Mint
South Africa Has Too Many Retail Stores, Pick n Pay CEO Says
(Bloomberg) -- South African retailers are opening too many new stores, putting their financial viability at risk, according to Pick n Pay Stores Ltd. Chief Executive Officer Sean Summers. The top five retailers in Africa's most-industrialized economy opened more than 700 stores last year, according to company filings. They have set up 230 already this year. 'South Africa is about to equal, or squeak past, the US on the square meter per capita of retail,' Summers said in an interview after unveiling the company's earnings. 'If you've got retailers who are prepared to just open stores at any cost, then a shopping center works. But I would question the medium-to-long-term wisdom' of the strategy, he said. The National Treasury last week lowered its economic growth forecast over the next three years to an average of 1.6% from 1.8% previously for the continent's biggest economy, partly due to the trade turmoil unleashed by US President Donald Trump. 'Sales densities in South Africa must be much lower than in the US because obviously per capita spending in South Africa is well below the US,' said Charles Allen, a London-based analyst at Bloomberg Intelligence. 'It does make you wonder how people eventually are going to justify the return on the investment.' Pick n Pay, which just completed the first year of multi-year recovery plan, is also trying to grow its business by targeting the lower-income market. The grocer has closed numerous outlets where there was no prospect of them returning to profitability, even as competitors such as Shoprite Holdings Ltd. sustain the pace of new store openings. While annual sales at Pick n Pay's discount Boxer outlets rose 13%, revenue for its core Pick n Pay South Africa segment, which accounts for about two-thirds of group sales, increased only 1.9%, the company reported earlier Monday. Sign up here for the twice-weekly Next Africa newsletter, and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen. More stories like this are available on
IOL News
26-05-2025
- Business
- IOL News
Pick n Pay's turnaround strategy: aiming for profitability by 2028
Pick n Pay Retail giant Pick n Pay, which is in the throes of an operational turnaround, hopes to achieve trading profit break-even in its 2028 financial year. Image: Supplied. Pick n Pay's turnaround is taking shape, but initial estimates predicting the retailer would reach breakeven in the 2027 financial year have proven over-optimistic. The group now forecasts this milestone will only be achieved in 2028. The group's pre-tax and capital items loss improved to R237 million for the 52 weeks ending March 2, compared to a R1.4 billion loss in 2024. This improvement was driven by a R1bn reduction in the Pick n Pay segment trading loss, supported by a 27.3% decrease in interest paid as the recapitalisation began to impact debt service costs. CEO Sean Summers, who announced on Monday that he has extended his contract until May 2028, said in an interview the initial target date of 2027 was an uninformed estimate. The group now has a clearer understanding of what is required to return to profitability. Summers said that he extended his contract to ensure continuity. If he were to leave in October next year as initially planned, he would have needed to start searching for a new CEO in six to nine months, which he felt was too soon during the turnaround process. 'There are no surprises in this result; we are meeting the guidance we have provided every six months, making calm and steady progress. You cannot rely on quick wins in our situation, and it will continue to be a journey as we rebuild our institutional memory,' said Summers. He emphasised their strategy is to build 'muscle memory for long-term success,' saying that there would be no 'quick fixes.' The group now anticipates reaching trading profit breakeven in the 2028 financial year, compared to the previous forecast of 2027. Video Player is loading. 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Advertisement Next Stay Close ✕ Ad Loading Analysts Anchor Capital investment analyst Robbie Proctor said the improvement in like-for-like sales in the second half of the previous year had continued into the first two months of the current year, which is encouraging. While Pick n Pay's market share is expected to decline as it closes stores, the core store estate is still showing signs of life. 'Pick n Pay remains a well-known brand, providing credibility to any turnaround effort. However, we believe Pick n Pay has a market segmentation issue under a single banner, relative to Shoprite with its Checkers, Shoprite, and Usave brands, which effectively segment the market offering,' Proctor said. Umthombo Wealth chief investment officer Alex Duys remarked that Pick n Pay delivered commendable results, 'exceeding many of our expectations.' He added: "Considering that management had to navigate the complexities of raising equity, preparing for the Boxer IPO, and executing an operational turnaround - all with limited resources - this performance is a testament to the remarkable efforts of the entire team.' Duys said Pick n Pay management have maintained a long-term strategic focus. 'Rather than opting for superficial fixes to boost short-term results, they are committed to implementing the necessary structural changes to ensure sustainable success,' he said. 'This was an important year as we executed the first leg of our operational and financial recovery. We are exactly where we said we would be when presenting the strategy last May, and in some aspects, we are tracking slightly ahead. Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction,' Summers said. He said they have addressed around 40 Pick n Pay stores through conversion, closure, or repositioning, with approximately 30 more loss-making stores still to tackle. Six turnaround priorities The first of six turnaround priorities announced in May last year was to recapitalise. A two-step recapitalisation plan—raising R12.5 billion through the Pick n Pay rights offer (R4bn) and the Boxer JSE listing (R8.5bn)—was achieved, restoring the group to a net cash position of R4.2bn. 'We have started to give much-needed attention to our core Pick n Pay supermarkets, and we are pleased to see early results reporting positive like-for-like sales growth, notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market,' Summers added. The second priority was to accelerate like-for-like sales growth, with the group turnover for the 53-week period rising by 5.6%. Over the past 18 months, Pick n Pay's company-owned supermarkets delivered gains in like-for-like sales growth, improving from -0.5% in the second half of 2024 to +3.6% in the second half of 2025. Inflation in Pick n Pay recorded at just 2.1% for the 2025 financial year, sharply down from 8.2% in 2024 and well below Statistics SA Food CPI of 3.9%. The third priority was the store estate reset, which involved converting to Boxer, franchising, or closing stores with no prospect of returning to profitability. The retailer has also begun opening and committing to new stores and will increasingly refurbish its supermarkets. The fourth pillar of the strategy is leadership and people, focusing on driving operational execution and restoring institutional memory. Key steps had been taken, including reinstating regional leadership structures and launching a campaign to reignite employee purpose. The fifth pillar, strengthening partnerships, was demonstrated in the tie-up with FNB e-Bucks. There was a 48.7% growth in online sales for the 53 weeks, led by asap! and PnP groceries on Mr D. Pick n Pay asap! has grown to 600 locations, and franchisee adoption of asap! has doubled in two years, unlocking new growth potential. Pick n Pay Clothing delivered 11.6% growth from standalone stores and reported market share gains. Thirty additional company-owned stores during 2025 brought the total estate to 415 stores. "Pick n Pay has over R4.3 billion in cash at its disposal to invest in pricing to attract shoppers. Given the subdued consumer backdrop, people are actively seeking deals when planning their weekly or monthly shop. There is a risk that Shoprite will need to follow a portion of the promotional activity, putting pressure on margins.," said Proctor. Duys said Pick n Pay's current focus did not appear to be on aggressively competing for market share but rather on driving efficiencies and enhancing the overall quality of its portfolio. 'We expect Pick n Pay to shift its focus back to regaining market share only once its operational turnaround is complete. At that point, the business will be far better positioned to compete effectively across all areas, supported by a more robust and efficient foundation,' Duys said. Visit: BUSINESS REPORT
Bloomberg
26-05-2025
- Business
- Bloomberg
South Africa Has Too Many Retail Stores, Pick n Pay CEO Says
South African retailers are opening too many new stores, putting their financial viability at risk, according to Pick n Pay Stores Ltd. Chief Executive Officer Sean Summers. The top five retailers in Africa's most-industrialized economy opened more than 700 stores last year, according to company filings. They have set up 230 already this year.
The Citizen
26-05-2025
- Business
- The Citizen
Pick n Pay turnaround taking shape as it delivers on first year of recovery plan
Pick n Pay cut its trading loss by R1 billion, but the recovery plan is only in its first year and will take another two years to bear fruit. Pick n Pay has delivered on the first year of its multi-year recovery plan as the retailer's turnaround is taking shape. The group's results for the 53 weeks to 2 March 2025 were announced this morning. They show that Pick n Pay reduced its trading loss by R1 billion, well ahead of forecast, while its like-for-like turnover and customer growth see momentum rebuilding. Announcing the results, CEO Sean Summers said there are no surprises. 'We are meeting the guidance that we have given every six months, making calm and steady progress. You cannot rely on quick wins in our situation, and it will continue to be a journey as we rebuild our Institutional Memory. 'This was an important year for Pick n Pay as we executed the first leg of our operational and financial recovery. We are exactly where we said we would be when presenting the strategy last May, and in some aspects, we are tracking slightly ahead. 'Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction.' ALSO READ: How did Pick n Pay do it? From technically insolvent to growing sales in months Recapitalising Pick n Pay The first of its six strategic priorities announced in May last year was to recapitalise the Pick n Pay Group. In this financial year, the group completed its two-step Recapitalisation Plan, raising R12.5 billion through the Pick n Pay Rights Offer (R4.0 billion) and the Boxer JSE listing (R8.5 billion) and restoring the group to a net cash position of R4.2 billion. 'We started to give much-needed attention to our core Pick n Pay supermarkets, and we are pleased to see the early results in reporting positive like-for-like sales growth, notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market,' Summers said. Accelerating like-for-like sales The second of its priorities was to accelerate like-for-like sales growth, and the group's turnover for the 53-week period increased by 5.6%. Over the past 18 months, Pick n Pay company-owned supermarkets delivered consistent gains in like-for-like sales growth, improving from -0.5% in the second half of the previous financial year to +3.6% in the second half of the current financial year. 'Our franchisees also showed steady positive recovery, and this positive like-for-like momentum continued in the first eight weeks of the financial year.' Summers also pointed out that the group maintained its focus on keeping selling prices down, recording inflation in Pick n Pay of just 2.1% for the current financial year, sharply down on the previous financial year's 8.2% and well below Statistics SA's food price inflation of 3.9%. ALSO READ: Can Pick n Pay's new look fix their troubles? New store design revealed Resetting Pick n Pay's store estate The third priority was to reset Pick n Pay's store estate and the group made considerable progress either converting to Boxer, franchising or closing those stores where there was no prospect of their returning to profitability, Summers said. 'Importantly, a great deal of focus was put into certain loss-making stores, with some now returning to profitability. We also started opening and committing to new stores and will increasingly refurbish our supermarkets to meet and exceed customer expectations.' Pick n Pay's leadership and people The fourth pillar of the strategy was leadership and people. The ongoing focus on driving operational execution and restoring its Institutional Memory required strong leadership and engaged employees. Summers said key steps have already been taken, including staff training to improve the customer experience, reinstating regional leadership structures and launching a campaign to reignite employee pride and purpose. ALSO READ: Will Boxer listing on the JSE save Pick n Pay? Strengthening partnerships The fifth pillar, strengthening partnerships, was clearly demonstrated in the tie-up with FNB e-Bucks, which already helped to attract customers across all segments. eBucks recently won three major awards, including best financial services loyalty programme in the world. Summer pointed out that the new four-year Tier 1 Springbok rugby sponsorship further amplified brand visibility and national pride. 'We celebrate the extraordinary role that our Springboks and sport play in unifying our country.' He said the retailer remains focused on innovation, adaptability and income diversification through its popular Smart Shopper programme, growing retail media capability and omnichannel platforms, while expanding value-added services revenue. 'More good news was growth of 48.7% in online sales for the 53 weeks, led by asap! and PnP groceries on Mr D. Pick n Pay asap! has grown to 600 locations and franchisee adoption of asap! doubled in two years, with new growth potential unlocked with the launch of the new asap! App. 'The growth in scale now resulted in achieving profitability on a fully costed basis. 'We are very happy with our balance between clicks and bricks,' Summers said. ALSO READ: Boxer shares worth R53 million traded since listing Good news from Pick n Pay Clothing with 11.6% growth Pick n Pay Clothing delivered 11.6% growth from standalone stores in the new financial year and reported market share gains. It opened net 30 company-owned stores during the financial year to bring the total estate to 415 stores. 'When I returned in October 2023 I stated that the recovery of Pick n Pay would be a multi-year process and that things would get worse before they got better. 'It is our sense that we see this unfortunate chapter now bottoming out and we have recalibrated our recovery programme to break even in financial year 2028. 'The journey of restoring Institutional Memory for long-term sustainability and success continues, and we are investing ahead of the recovery, ensuring a strong future-fit business with energy and conviction. Importantly, our customer base is steadily growing as one by one they experience the change. 'It is with a passionate sense of pride and honour that I have confirmed an extension to my contract until May 2028, thereby ensuring leadership continuity in the short term, followed by an orderly succession process,' Summers said.
