Pick n Pay Narrows Half-Year Loss by 31.9% as Boxer Drives Growth

Pick n Pay Narrows Half-Year Loss by 32% as Labour Deal and Turnaround Deliver Results

Pick n Pay narrowed its headline loss by 31.9% to R299 million in the first half of its 2027 financial year, as margin recovery and a newly concluded labour agreement bolstered the company's two-and-a-half-year turnaround effort.

The results, released on the JSE on Monday, 26 October, cover the 26 weeks ended 30 August 2026. Group turnover rose 2.4% to R60.5 billion, while trading profit climbed 58.1% to R490 million from R310 million a year earlier. The gross profit margin expanded by 0.7 percentage points to 18.8%, which the company credited to an improved product range and supply-chain efficiencies.

The group's loss before tax and capital items improved by 56.2% to R139 million, from R317 million in the comparable period. Headline loss per share narrowed to 40.71 cents from 59.77 cents.

"We have put the fundamentals in place, and they are delivering, despite the constrained trading environment," chief executive Sean Summers said.

Labour deal removes a major hurdle

The company confirmed it had reached agreement with its labour partners to restructure its store labour model, formally withdrawing the Section 189A consultation process initiated in May 2026. The new model, effective 1 November, introduces more flexible scheduling and brings employee costs closer to industry norms — a step management has described as critical to reaching its break-even target.

Pick n Pay has also named Spencer Sonn as CEO-designate, announcing in September that he will join the business next year.

Core supermarkets improve, but remain in the red

The Pick n Pay supermarket segment remained the group's weak point, posting a trading loss of R516 million — though that was 16.9% narrower than a year earlier. Company-owned South African supermarkets grew like-for-like sales by 2.4%, comfortably ahead of internal selling-price inflation of 1.5%, meaning the division gained genuine sales volume. Total segment turnover was roughly flat, with store closures from the estate reset still weighing on the comparison.

Boxer carries the group

Discount banner Boxer continued to anchor group performance, growing turnover 6.3% to R24.1 billion and lifting trading profit 8.1% to R1 billion. It opened its 600th store during the period and grew profit before tax and capital items by 10.6% to R774 million. Boxer declared an interim dividend of 49.93 cents per share.

Online sales jump 35%

Pick n Pay's online and omnichannel turnover grew 35.4%, supported by the launch of Penny, an AI-powered conversational shopping assistant on its asap! platform, and the integration of Pick n Pay Clothing into the app, where online clothing sales grew 137%.

Strong balance sheet, cautious outlook

The group ended the period with net cash of R10 billion, including R7.7 billion in the Pick n Pay segment — a position strengthened by May's sale of a 12.5% stake in Boxer for R4.7 billion, which reduced the group's holding to 53.1%.

Management maintained its target of reaching break-even trading profit after lease interest by the 2029 financial year, but warned that elevated oil prices — and their knock-on effects on food inflation, logistics costs and consumer spending — have left near-term visibility low.

Summers said like-for-like sales growth at South African supermarkets in the four weeks since the reporting period has run slightly ahead of the first-half rate. "Our foundations are stronger, and our hard work is delivering, despite a tough market, but there is still much to do," he said.