Pick n Pay store closures and conversions drive profitability

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South African retailer Pick n Pay is making steady strides in its turnaround strategy, significantly narrowing losses and delivering strong performances in digital and clothing segments as it restructures its store portfolio.

For the financial year ending 2 March 2025, the group reported a headline loss reduction of over 60%, supported by a focused recovery strategy that included the closure or conversion of 40 loss-making supermarkets across South Africa.

“Steady progress has been made over the past 18 months,” the group noted, highlighting improved like-for-like sales, which grew from -0.5% in H2 FY24 to 3.6% in H2 FY25.

Store closures and conversions drive profitability

As part of the group’s efficiency drive:

25 company-owned Pick n Pay supermarkets were closed
7 were converted into franchise stores
8 were rebranded as company-owned Boxer stores

In total, 15 Pick n Pay stores, including 7 liquor stores, were converted to Boxer-branded outlets during the year.

These stores have since shown increased performance under the Boxer brand, affirming the group’s repositioning efforts.

As of March 2025, the total Pick n Pay supermarket footprint dropped by a net 45 stores, leaving the group with 570 supermarkets, including 289 company-owned stores, 21 hypermarkets, and 260 franchises.

Losses significantly reduced

The Pick n Pay segment’s trading loss for FY25 declined to R549 million from R1.5 billion in FY24 – a reduction of approximately R1 billion.

This improvement was largely driven by a second-half swing to profitability, with a R170 million profit in H2 FY25, compared to an R864 million loss in H2 FY24.

Digital and clothing segments on the rise

While core supermarkets face continued challenges, Pick n Pay is seeing strong growth in its clothing and online operations.

Pick n Pay Clothing added a net 30 new stores, bringing its total to 415 locations. Like-for-like sales increased 7.7%, with 11.6% turnover growth from standalone stores.

Despite a slow start due to port delays and late seasonal changes, H2 like-for-like sales grew 3.8%, which the group says is encouraging given the high base.

Meanwhile, the retailer’s online retail business surged, with FY25 turnover growing by 48.7% year-on-year. Online sales, driven by the Asap mobile app and its partnership with Mr D, are now profitable on a fully costed basis.

The group reported triple-digit growth from franchise stores using Asap, highlighting growing adoption of the platform beyond company-owned stores.

As part of its digital overhaul:

The Asap platform was fully re-engineered over 18 months
A new Asap app launched in April 2025, integrating Smart Shopper, value-added services, and AI-driven features
A revamped Pick n Pay website will debut with Asap on-demand service on 1 June 2025

The app remains in beta testing until September 2025, with new feature rollouts expected throughout FY2026.

Outlook

Pick n Pay’s leadership believes the multi-pronged recovery strategy is gaining traction, with profitable momentum in Boxer, digital, and clothing segments supporting the broader turnaround.

The focus going forward will remain on profitable growth, operational efficiency, and accelerated digital transformation as the group continues to reshape its retail model in a highly competitive market.