‘Leaner and fitter’ Pick n Pay reaps rewards of cost-cutting programme
By Robert Laing - Apr 19th 2018, 09:08
CEO Richard Brasher says the retailer has kept its average selling price inflation in check and well below Statistics SA’s official figure.
Describing itself as leaner and fitter, grocery chain Pick n Pay reported an almost 7% growth in net profit as a result of 5% higher sales.
Cost cutting included reducing its employee numbers by 10% through a voluntary severance programme that cost R250m during the 52 weeks to February 25, Pick n Pay said in its results statement released recently.
The retailer declared a final dividend of 155.4c, taking its total for the year to 188.8c, a 7.1% rise from the previous year’s 176.3c.
Pick n Pay limited its average selling price inflation to 2.2%, down from 6.1% in 2017 and well below official food inflation of 5.9% as reported by Statistics SA’s consumer price index, CEO Richard Brasher said.
"Our work on pricing could not have come at a more important time, considering 84% of South African families survive on a household income of less than R20,000 per month," Brasher said.
The group ended its 2018 financial year with 1,685 stores, 125 more than at the end of its 2017 financial year.
This total includes 57 Zimbabwean stores owned by its TM Supermarkets join venture.
The group’s store number growth indicated a focus on its home market rather than rest of Africa, and company-owned stores rather than franchises.
Outside SA, Pick n Pay grew its footprint by a modest four stores to 144.
The number of franchised Pick n Pay stores remained level at 299, with seven new store openings balancing seven closures.
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