Pick n Pay says it lost R2.8bn in sales during the lockdown

By Londiwe Buthelezi for News24

Pick n Pay says it lost R2.8 billion in sales because of trading restrictions and store closures during the six months to 30 August.

The retailer, whose first half of the 20201 financial year began just four weeks before South Africa went into lockdown, said liquor and tobacco sales decreased 47.5% over the period, while clothing sales in South Africa only shrank by 4.2%.

Still, the retailer managed to grow its turnover by 2.6% year-on-year, or 1% on a like-for-like basis when new stores aren’t factored in. Turnover from its South African operations increased by 3.4%, or 1.7% on a like-for-like basis. But core retail sales – which include food, groceries and general merchandise but exclude liquor, clothing and tobacco – grew 9.9% in the country, or 7.6% on like-for-like basis.

Growth of online

Pick n Pay said its online store doubled its sales growth during this lockdown, recording a 200% increase in active customers. Pick n Pay expanded its “Click n Collect” services to meet increased demand and launched an online store for its clothing offerings in August.

The group also announced on Tuesday that it has agreed to buy on-demand online grocery service Bottles. The acquisition is expected to be completed by November this year.

“This will enable Pick n Pay to build on the success it has achieved in partnership with Bottles in recent months, and further strengthens what is already sub-Saharan Africa’s largest and most popular online grocery business,” it said in a media statement.

Bottles was launched in 2016 as South Africa’s first alcohol on-demand delivery app, and partnered with Pick n Pay in 2018.

Pick n Pay added that it will continue to grow its online footprint through “a comprehensive suite of delivery options, including a pre-scheduled and standing-order delivery service, an expanded Click n Collect offer”, over and above its an on-demand essential grocery and liquor offer

Growing the clothing business

The retailer opened 11 new clothing stores during the lockdown period, but also closed six underperforming stores. Even though clothing retailers have been confronted by drastic change in consumer preferences and fashion – with the lockdown accelerating the move towards athleisure wear – Pick n Pay said it is confident that it will be able to grow its clothing business.

It plans to make “targeted investments” in stand-alone clothing stores and put in additional space for clothing in hypermarkets and supermarkets too. This comes at a time when Massmart is also expanding its offering in “value clothing” after closing the fresh food section in Game stores to make space for basic clothing instead.

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