In a strategic move amidst a challenging economic landscape, Pick n Pay Stores Limited, has announced a significant change in leadership. Current CEO Pieter Boone will step down from his position effective 30 September, to be replaced by Sean Summers, a Pick n Pay veteran with a wealth of experience within the organization.
Chairman Gareth Ackerman expressed his gratitude for Boone’s dedication, acknowledging his leadership during tumultuous times, including the Covid-19 pandemic, civil unrest, and ongoing load shedding crises. Boone’s departure comes as the company faced a difficult period marked by weak consumer demand, load shedding costs, and intensified competition. Despite several successful initiatives, the core Pick n Pay business struggled to meet expectations.
The Group’s sales performance for the first half of the fiscal year ending August 27, 2023, reflected these challenges. While the Ekuseni growth drivers of Boxer, Online, and Clothing demonstrated strong sales momentum, Pick n Pay SA supermarkets experienced muted sales growth, largely due to load shedding and promotional pressures.
Performance Overview (in percentages)
| Sales Segment | H1 FY24 Growth | 20 Weeks Ended July 16, 2023 | Latter 6 Weeks of H1 FY24 |
|---|---|---|---|
| Pick n Pay SA | 0.3% | -0.3% | 2.4% |
| Boxer SA | 16.1% | 15.4% | 16.1% |
| SA Total Sales | 5.1% | 4.4% | 5.1% |
| Rest of Africa Sales | 14.4% | 15.9% | 14.4% |
| Group Turnover | 5.4% | 4.8% | 5.4% |
The Group’s financial statement for H1 FY24, expected to be released on October 18, 2023, anticipates a loss at earnings, headline earnings, and pro forma headline earnings levels. The loss is attributed to various factors, including restructuring costs, supply chain duplication expenses, and net incremental energy costs due to load shedding.
The leadership change coincides with Pick n Pay’s efforts to address these challenges and reinvigorate its position in the market. Sean Summers, who previously served as Managing Director and CEO, brings with him a deep understanding of the company and South African grocery retailing. He expressed his enthusiasm for leading Pick n Pay back to its deserved market standing, emphasizing his passion for retailing and the company’s pivotal role in his career.
Despite the current difficulties, management remains optimistic about the future. Summers and his team anticipate a stronger performance in H2 FY24, driven by more supportive earnings seasonality, lower net incremental energy costs, absence of supply chain cost duplication, and efficiency gains from Project Future initiatives undertaken in H1 FY24.
Pick n Pay, with its strong balance sheet and prudent financial management, continues to navigate these challenges with a focus on long-term sustainability and growth. South African consumers and investors eagerly await the company’s next steps under the new leadership, anticipating a revitalized approach to the retail landscape. Stay tuned for further updates on Pick n Pay’s journey back to market prominence.
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