Pick n Pay has reported another solid sales performance from its online, on-demand grocery delivery platform even as the rest of the group grapples with a difficult turnaround.

“Trading losses in the group’s Pick n Pay business grew 9.1%, in line with budgets, to R718.9-million, largely due to gross profit margin contraction,” Pick n Pay said of the numbers for the first half of the 2025 financial year.

“However, the business saw solid momentum in its clothing and online businesses, with encouraging improvement in the underlying performance of its company-owned supermarkets,” it said.

For the reporting period – the 26 weeks to 25 August 2024 – group turnover rose by 3.7% to R56.1-billion. Trading profit rose by 159% to R81.5-million and headline earnings per share declined by 16.3% to a loss of 136.6c.

The wider half-year loss reflected the trading losses in its core supermarkets business alongside higher borrowing costs.

The country’s third-biggest grocery retailer reported a loss before tax and capital items of R1.1-billion, compared to a loss of R837.2-million a year ago.

CEO Sean Summers, who is tasked with turning around the struggling grocer, said the company is “quietly confident” that it will reduce trading losses in the Pick n Pay business by as much as 50% for the full year.

The group’s discount Boxer business’s trading profit grew by 16% to R801.4-million, due to a 12% growth in sales, and Pick n Pay announced a plan on Monday to list the business separately on the JSE in an effort to unlock shareholder value.

Leading the way

While Pick n Pay expressed confidence of a turnaround in the second half of the year, its online sales are already leading the way with a 60.6% growth in the past year “driven by sustained improvements in the Pick n Pay asap! on-demand retail platform”.

“Online retail sales grew 60.6% year on year, building on the strong 74.4% growth momentum reported for FY2024. The growth was primarily driven by the group’s on-demand services, Pick n Pay asap! and Pick n Pay Groceries on Mr D, now operating out of 550 Pick n Pay stores,” the retailer said.

Read: Discovery Vitality ditches Pick n Pay for Checkers

“The Pick n Pay asap! app was relaunched in October 2023 with significantly enhanced functionality and continues to benefit from advancements in artificial intelligence, including AI search, alternatives and personalisation. These improvements, alongside investments in cloud-based technology and scalable architecture, have made the app faster and more reliable,” it said.

“Substantial resources have also been directed towards store operations, logistics and marketing, improving order fulfilment, picking times, on-time deliveries, and boosting overall customer satisfaction by 24%.”

Pick n Pay is chasing market leader Shoprite Holdings, whose Checkers Sixty60 app stole an early lead from its competitors in the fast-growing on-demand grocery delivery market. – © 2024 NewsCentral Media, with additional reporting by Nqobile Dludla, © 2024 Reuters

Get breaking news from TechCentral on WhatsApp. Sign up here