Retailer Pick n Pay has posted a weak earnings update, warning of a 20% or greater decline in profits in the first four months of the trading year. However, online sales surged by more than 75%.
In a trading update for the 20 weeks ended 16 July, Pick n Pay said “continued strong sales momentum in Boxer and [in] online [sales] was particularly pleasing”.
Group sales rose by 4.8% year on year, lifted by a good top-line performance from the rest of Africa. The real weakness was at Pick n Pay stores in South Africa, where like-for-like sales fell by 0.3%, which was impacted by Eskom’s load shedding.
Diesel costs to run generators for the four-month reporting period ran to R300-million.
On the bright side, online sales growth for the period was 75.3%, sustaining the “strong growth momentum” reported in the 2023 financial year.
Last year, Pick n Pay announced it had partnered with Naspers-owned Takealot Group to allow consumers to buy Pick n Pay food, groceries and liquor on Takealot’s Mr D app.
Pick n Pay shares were trading sharply lower in Johannesburg on Wednesday on the back of the trading update. They were last quoted at R35.31 apiece, down 7.7% compared to Tuesday’s closing price. To yesterday’s close, the shares had lost about a third of their value over 12 months. – © 2023 NewsCentral Media
