Pick n Pay’s comeback era is here and starting to deliver
Pick n Pay is showing solid progress in its multi-year turnaround plan, with stronger operations, rising online sales, and major structural changes starting to take shape , even as tough decisions around costs and labour continue.
From cost cuts to online growth, Pick n Pay is rebuilding fast, but the hardest moves are still on the table. (Source: Image supplied)
Turnaround strategy gains ground
Pick n Pay’s systematic execution across its six strategic priorities announced in 2024 is strengthening the foundation for a sustainable recovery and long term profitability.
Three priorities have largely been completed, the recapitalisation of the business, the re establishment of leadership structures, and the reset of the store estate.
The remaining priorities are focused on restoring competitiveness, including the recently announced labour consultation process crucial to building a more competitive Pick n Pay.
Improving stores and customer momentum
The steady improvement in company owned Pick n Pay supermarket like for like sales growth, up to 3.9% vs 3.3% in FY25, and the simultaneous improvement in the Pick n Pay segment's gross profit margin by 0.4%, confirm the turnaround is heading in the right direction.
The company is also encouraged by positive momentum in its customer growth over the past two years.
Pick n Pay has delivered improvements in store standards, product availability and product range, particularly across Fresh categories.
Progress has also been made across several key priorities, including shortage reduction, support office efficiencies and supply chain optimisation, supported by a materially improved logistics contract and enhanced marketing initiatives.
“Our store estate reset is effectively behind us, and we have achieved some of the key milestones we set ourselves in our strategy.
The positive customer feedback that we are getting is really very encouraging,” says CEO Sean Summers.
Boxer drives strength and flexibility
The R4.7bn Boxer share placement completed after year end on 18 May 2026 further strengthened the group’s balance sheet and financial flexibility, supporting continued investment in key turnaround priorities and operational improvements, while allowing Pick n Pay to retain a controlling stake in Boxer.
“The Boxer capital raise is a crucial part of ensuring we have the funding and balance sheet strength required to complete this turnaround journey,” says Summers.
The numbers behind the progress
Key FY26 highlights:
- Group turnover increased 3.4% on a 52 week basis, with 12.3% growth from Boxer and a 1.6% decline from Pick n Pay as a result of store closures under the store reset
- Company owned Pick n Pay supermarkets recorded like for like sales growth of 3.9%
- PnP SA internal selling price inflation at 1.9% well below CPI food inflation of 4.4%, with deflation in Boxer at negative 1.2%
- Online business recorded a strong FY26, with turnover increasing by 32.7% on a 52 week basis
- Gross profit margin expanded 0.5% to 18.8%, with improvement in both Pick n Pay and Boxer
- Group trading profit declined 4.2% to R1.7 billion, reflecting stronger Boxer performance offset by a deeper trading loss in Pick n Pay
- The Group reduced its headline loss by R45 million to R363 million
Tackling costs to unlock profitability
Commenting on the results, Summers said the turnaround strategy remains firmly on track, supported by improving topline growth, stronger operational discipline and careful cash management.
“While Pick n Pay’s FY26 trading loss increased, the business today is fundamentally stronger than it was two and a half years ago as a result of the action we have taken and the investments we have made.”
A major focus now is fixing the company’s cost base, particularly store labour costs, which remain structurally higher than competitors. Pick n Pay has entered a formal consultation process to address this.
“Our objective is clear, to align our cost structure with industry standards while safeguarding jobs wherever possible.”
Summers notes that without this reset, returning the business to profitability in a thin margin retail environment will not be possible.
Outlook: A long road but clear direction
“As we move into Pick n Pay’s 60th year, the work we are doing is fundamentally shaping a new company for our customers.”
While pressure from rising diesel costs and a strained consumer environment is expected to continue, the company says these challenges are affecting the entire retail sector.
Encouragingly, in the nine weeks post period end, the Pick n Pay segment’s South African supermarket like for like sales growth was slightly ahead of FY26 levels.
“We have a clear path to sustainability, driven by ongoing incremental gains, and remain confident that the initiatives we have put in place are starting to bear fruit.”