Pick n Pay to focus on promotions to lift flagging sales
CEO Richard Brasher says investment in private labels and targeted discounts will benefit Pick n Pay and its customers
Pick n Pay will turn to more promotions and bolster its private label after experiencing a steep decline in same-store sales in its 2017 financial year. In the year to February, it reported like-for-like sales growth of 3.4%, against an internal selling price inflation of 6.1%. This implied volume declines on a per store basis, Sanlam Private Wealth investment analyst Renier de Bruyn said. "Sales growth remains disappointing and too low to sustain the current earnings trajectory. "Sales growth for Pick n Pay still materially lags that of Shoprite’s supermarkets in SA. Also, the slower inventory turn as a result of more stores and like-for-like volume declines, as well as the relatively high capital spending on store refurbishments has negatively affected free cash flow generation and resulted in higher debt levels." Inventory rose 16.4% after the retailer opened 151 new stores. Headline earnings a share rose 18% to 264.35c and revenue rose 7% to R79bn. It declared a final dividend o...
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