Why Pick n Pay lags Shoprite
Activity galore at Pick n Pay but lack of sales growth has analysts concerned
It’s been almost two years since Pick n Pay boss Richard Brasher declared the so-called stabilisation phase of the group’s recovery complete, and pushed the button on its growth trajectory phase. One of the key objectives of phase two is "improving the estate" to give it greater customer appeal through rolling out next-generation stores and refurbishing existing stores up to next-generation standards. In the two years to February, Pick n Pay has delivered, pumping R3bn into refurbishing 102 stores and opening 193 corporate stores. Its 106 next-generation stores now make up 18% of the group’s supermarket estate. However, another key objective of phase two of the recovery is to accelerate top-line sales growth. Here Pick n Pay delivered well below expectations in its latest financial year. Sales growth came in at 7%, a figure that Alec Abraham of Sasfin Securities points out is below the overall 9.1% nominal sales growth of general retailers recorded by Stats SA over the same period. ...
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