Pick n Pay Online’s turnover increased by 35.4% in the first half of its 2027 financial year, as the retailer reported improved financial performance and progress in its turnaround strategy.
Announcing its interim results for the 26 weeks ended 30 August, Pick n Pay says group trading profit increased by 58.1% year-on-year to R490 million, while its headline loss narrowed by 31.9% to R299 million.
Group turnover grew by 2.4%, supported by discount retailer Boxer, while gross profit margin improved by 0.7 percentage points to 18.8%.
The retailer says its turnaround efforts were beginning to take hold, although restoring sustainable profitability remained a work in progress.
“We have put the fundamentals in place, and they are delivering, despite the constrained trading environment,” says CEO Sean Summers.
“Notwithstanding these market challenges, we have delivered a strong like-for-like performance in our company-owned supermarkets, ahead of competitors, and with further benefits to come as we systematically work towards our FY29 break-even target.”
AI-powered shopping assistant
The retailer notes that Pick n Pay Online’s growth was supported by technology improvements, including changes to the shopping and checkout experience and the launch of Penny, a conversational artificial intelligence-powered grocery shopping assistant on the asap! platform.
The assistant helps customers discover products, plan menus and shopping lists, and increase basket sizes.
The retailer has also integrated Pick n Pay Clothing into the asap! app, allowing customers to shop for groceries and clothing through a single online platform. Online clothing sales grew by 137% from March to August 2026 compared with the same period last year.
Pick n Pay’s company-owned South African supermarkets recorded like-for-like sales growth of 2.4% during the reporting period, ahead of internal selling price inflation of 1.5%. This translated into positive like-for-like volume growth.
South African turnover declined by 0.5%, an improvement on the 1.4% contraction recorded in the 2026 financial year. The retailer says the effects of store closures implemented as part of its estate restructuring continued to weigh on total turnover, although the impact was diminishing.
“Improving the customer experience is central to our turnaround and is supporting sales growth. Our renewed focus on fresh produce quality has seen us introduce more than 50 new and upgraded fresh lines this year, driving stronger category growth and increased customer participation in fresh,” says Summers.
In the four weeks following the reporting period, like-for-like sales growth at Pick n Pay's South African supermarkets was slightly ahead of the first-half rate.
The Pick n Pay segment's trading loss narrowed by 16.9% to R516 million, reflecting improved gross profit margins and controlled trading expenses. The company attributed the improvement to product range optimisation and supply chain efficiencies.
Boxer boosts group performance
Boxer continued to support group growth, with turnover increasing by 6.3% and trading profit rising by 8.1% to R1 billion.
The discount retailer, which opened its 600th store during the period, increased profit before tax and capital items by 10.6%, reflecting its value-focused offering and expansion strategy.
The group's loss before tax and capital items improved by 56.2% to R139 million, from R317 million in the comparable period.
Pick n Pay ended the half-year with net cash on hand of R10 billion, including R7.7 billion within the Pick n Pay business.
Labour restructuring
The retailer also announced it had concluded consultations on its store labour model, reaching an agreement with its primary labour partners last week.
The agreement will introduce a more flexible store labour model from 1 November, following a Section 189 consultation process.
“We are pleased that we have reached agreement through the formal consultation process. This puts us on a more competitive footing, helps secure jobs, provides greater certainty for our employees and creates a stronger platform for future growth. We extend thanks to all involved for the constructive and respectful nature of the engagement, which is a testament to the strength of the relationships we have built over time,” says Summers.
The agreement forms part of the six-point turnaround strategy launched two-and-a-half years ago. Other milestones include recapitalising the business, closing loss-making stores, strengthening partnerships and implementing leadership succession plans.
Last month, Pick n Pay announced Spencer Sonn as CEO-designate. He is expected to join the business next year.
Looking ahead, Summers warns that elevated oil prices and pressure on consumers would make trading conditions difficult for the remainder of the 2027 financial year.
“Our foundations are stronger, and our hard work is delivering, despite a tough market, but there is still much to do. We must now build on this progress, further improve the customer experience and deliver the sustained sales growth and operational improvements needed to return Pick n Pay to profitability.
“We thank our colleagues and franchise partners for their continued commitment as we work together to rebuild Pick n Pay for a stronger, more sustainable future,” concludes Summers.
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