Retail group Pick n Pay’s online sales continue to grow, despite challenging economic headwinds.
The group today announced its financial results for the 26 weeks to 27 August, saying online sales were buoyed by its ASAP! shopping app and partnership with Takealot’s Mr D app.
Pick n Pay’s online sales grew 76.3% for the period under review, says the company in a statement.
Gareth Ackerman, chairman of Pick n Pay, comments: “We have seen superb online sales growth, driven by strong growth in our on-demand platforms, ASAP! and Pick n Pay groceries on Takealot’s Mr D app.
“Income from value-added services also grew encouragingly, as the group focused on maximising opportunities in banking services, financial services and mobile.”
Earlier this month, Pick n Pay added smart artificial intelligence-assisted search tools to its shopping app, in an effort to ramp up its e-commerce push.
At the time, the retailer said the new addition forms part of its app upgrades, to give customers a faster way to shop online and get their groceries delivered in 60 minutes. Since the re-launch of the ASAP! app, on-demand sales doubled year-on-year, says Pick n Pay.
Last year, it concluded a commercial services agreement with the Takealot Group, for it to launch a dedicated Pick n Pay on-demand food, grocery and liquor offering on the Mr D app. The solution on the Mr D app is available across the country, alongside the existing ASAP! app.
Overall, the retail group saw a decline in business performance, escalated by high load-shedding costs and increased competitive intensity. It spent just under R400 million on diesel, which added to growing expenses and limited its ability to respond to strong competitor promotional activity.
The gross profit margin also came under pressure, declining 0.9% to 18.5%. Trading expenses increased 13.7%. This included R190 million net incremental energy costs and R259 million employee restructuring costs.
According to the group, the disappointing performance led to a change in the group’s leadership, with the board appointing Sean Summers as its new CEO.
Summers is said to have successfully led the company from 1999 to 2007, and returned as CEO, effective 30 September.
“I have hit the ground running,” comments Summers. “My focus is to return the core supermarkets business to growth and profitability, and maintain the growth of other key parts of the business.
“This is an exceptional company with a much-loved brand and rich heritage. We have a lot of work to do, and I have received strong support from our people. They want to see Pick n Pay succeed, and my task will be to see that we work hard on the basics and improve significantly, both on customer service and on execution in our supermarkets.
“Our buying capabilities need work, and we will be engaging closely with our suppliers as a matter of urgency. Importantly, we need to rekindle customers’ affection for the Pick n Pay brand and energise our staff to focus their efforts on the critical road ahead.”