Online sales at Pick n Pay grew by nearly 75% in the past year – and more than doubled for on-demand sales via its asap! app and Takealot’s Mr D app.

This was, however, one of few bright spots in the troubled retailer’s annual results for the 52 weeks ended 25 February, published on Monday.

“The group reported total online sales growth for FY24 of 74.4%, maintaining its strong online momentum (FY23 sales up 72%),” Pick n Pay said in notes accompanying the numbers. It didn’t disclose rand numbers for its online sales.

“Growth was driven by 102.3% year-on-year increase in the group’s on-demand services, Pick n Pay asap!, via its flagship app, as well as via its partnership with Mr D,” it said.

Still, Pick n Pay has a mountain to climb if it’s going to beat Shoprite Holdings-owned on-demand platform Checkers Sixty60, which established an early and commanding lead in the segment.

“Pick n Pay has established itself as the number-2 on-demand grocery service among South African consumers,” the retailer said.

The asap! application was relaunched with enhanced functionality in October last year and “continues to be improved through advancements in artificial intelligence, such as AI Search and Alternatives, personalisation, and a faster and more reliable app”.

“The business has spent substantial resources to ensure its architecture is scalable, cost-effective and future-proof, using the latest cloud-based technology and engineering practices.”

541 stores

“This has been accompanied by a sizeable investment in store operations and logistics, which has improved the efficiency of store picking and delivery operations. The goal is to ensure customers get everything they ordered, delivered fast and fresh. As a result, the customer’s online experience continues to be enhanced, including a 30% improvement in delivery time.”

The asap! service has been expanded to 541 stores, including franchise stores. “The business is poised to capture further growth in FY25, maintaining its high growth rates by further improving its service and in-app experience,” Pick n Pay said.

Read: Pick n Pay asap! ups the ante in fight with Checkers Sixty60

Since the Covid-19 pandemic and the associated lockdowns, when people were encouraged to stay at home, South Africans have increasingly embraced on-demand grocery shopping services, with Woolworths, Spar, Checkers and Pick n Pay all reporting strong growth.

Apart from the strong growth in online sales and a good performance from the Boxer chain and Pick n Pay Clothing, Pick n Pay’s 2024 financial results are exceptionally poor. The group scrapped its dividend after reporting a loss after tax of R3.2-billion. The trading loss in the Pick n Pay stores business came to R1.5-billion compared to a trading profit of R1.3-billion a year ago, it said.

The group has embarked on a two-step recapitalisation plan, which includes a rights offer. It also plans to list better-performing Boxer separately to “unlock the value of the Boxer asset for Pick n Pay and its shareholders”.

“The strategic plan is operationally focused on the turnaround of Pick n Pay supermarkets and hypermarkets, with particular focus on eliminating losses incurred by specific loss-making company owned stores and improving the performance of the remainder of the estate,” it said.

“Over 100 loss-making supermarkets will either be closed or converted to Pick n Pay franchise or Boxer stores. Improving the performance of the remainder of the estate will be achieved via initiatives to drive like-for-like sales growth and optimise the operating model.